On General Labor and Socially Created Value

In a recent post to the P2P Research email list, Adam Arvidsson (author of “The Crisis of Value and the Ethical Economy”) referred to Marx’s “cryptic passage” in Grundrisse, in which he wrote of communism emerging as the result of “the collapse of the law of value driven by the increasing role of cooperation and General Intellect.” A growing share of wealth is “produced outside of the processes commanded by the wage relation,” so that “wealth creation is socialized and made to coincide with ‘life itself.’”

Arvidsson is part of a movement of European Marxists centered around the Oekonux mailing list, who see open-source culture (get that “-nux” at the end of the name?) as the core around which a post-scarcity communist economy will be organized.

But it seems the vision of communism sought by these Marxists coincides, in many ways, with the kind of society envisioned by free market anarchists like us folks at C4SS.

Some people take the growing portion of wealth created by general social labor or intellectual labor as grounds for breaking the link between labor and reward altogether, and creating some sort of guaranteed minimum income as a “dividend” on the social product.

But a genuine free market would do this quite effectively, without the middleman of a state. The market socializes the benefits of innovation through competition. Absent patents and copyright, which erect barriers to the general diffusion of new technologies and processes, the effect of innovation in reducing labor time and physical input costs for a given level of output would be entirely socialized through reduced commodity price. When advances in technology enable desktop publishing at a hundredfold cost reduction compared to traditional publishing, or cheap CNC machine tools lower the cost of a garage factory to two months’ wages for a skilled worker, the portion of commodity price that disappears as a result is a form of social labor that’s appropriated collectively.

The natural process of a free market is to socialize the benefits of innovation through lower prices.

The main thing that prevents this from happening is artificial scarcity. Tom Peters, in The Tom Peters Seminar, was quite enthusiastic about the fact that parts and labor amounted to maybe a tenth of the price of his Minolta camera, the rest of the price consisting of “intellect” and “ephemera.” But by their very nature, the products of intellect are “social property” once they become public knowledge. The only way to capitalize “intellect” as a source of rent is to prevent people from using each other’s ideas. Do away with patents, and that Minolta camera will cost a tenth as much. The ninety percent of its price that disappears in a free market is socialized general intellect, socialized more effectively than it could ever be by a guaranteed income.

Austrian economist Carl Menger wrote of “non-economic goods”—goods whose supply was so abundant, in relation to supply, that they ceased to be objects of “economizing man.” They were, in effect, “too cheap to meter.”

And the material prerequisites of production (the raw materials going into commodities and the labor required to produce them) are growing less and less important compared to “General Intellect”—the social body of scientific-technological knowledge, which is available for free, and adds nothing to exchange value unless it is made the object of a state-enforced monopoly.

As the individualist anarchist Benjamin Tucker wrote over a century ago, the effect of competition on the free market is to socialize the benefits of land and capital. Likewise, the effect of competition in a genuinely free market is to socialize the benefits of “General Intellect.”

This socialization of the benefits of innovation is at the heart of the open-source movement. Hardware and software hackers, by reducing the labor time and materials cost required to produce the things we enjoy, are removing larger and larger shares of what we consume from the realm of economic value and the cash nexus. As larger and larger shares of the price of a good are destroyed by general socialized intellect, and the hours we must work to buy it fall to a fraction of their former value, it approaches ever closer to the status of a non-economic good. When the consumption goods once created in a forty-hour week can be produced with ten hours of labor, we’re all living off a “guaranteed income” of sorts.