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6/19/09

A brief note on dignity value.

Last summer I introduced the notion of dignity value at the Goat Island symposium (July 2008). In this little note I want to point out the shortcomings of the two traditional notions of value in economics.

Classical economics acknowledges value as a central concept and defines it as value-in-exchange. The value of anything in this formulation is what it can exchange for. The problem with this is that there can never be a general increase in value. Anytime something increases in value, something else must necessarily decrease in value. Value is not only relative but it is also reciprocal. In a Robinson Crusoe economy, a favorite pedagogical device in Classical economics, when coconuts rise in value they do so not only in relation to but also inversely to let us say boats. Since there can never be a general rise in value, humans are stuck in a mad system of competition. I can only increase my value at an equal cost to someone else.

Marxian economics significantly improves on this notion of value by bringing in the concept of surplus value. While most commodities trade for their value-in-exchange, labor suffers from an asymmetry that explains the origin of value in the first place. While the fruits of labor receive their value-in-exchange, labor itself is only paid its value-in-use. Though a worker may produce ten boats in a day's work (value-in-exchange), labor is paid only what is needed to socially reproduce itself (value-in-use). Perhaps the equivalent of one boat is sufficient to keep the worker coming to work each day. This leaves nine boats for the capitalist which constitute the surplus value.

While Marx's construction of the concept of surplus value is a huge improvement on the Classical formulation, it has in recent times lost its power of explanation. After all surplus value makes sense only when people are engaged in largely creating things of value. But most things produced in our time have no dignity value at all. The exploitation is no longer in terms of the stealing of value created away from workers but the non-creation of value in itself. Value-in-exchange for the majority of material objects is high. Surplus value is high. But dignity value is close to zero.

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