Just felt like quoting…

“Labor is prior to, and independent of, capital; that, in fact, capital is the fruit of labor, and could never have existed if labor had not first existed,–that labor can exist without capital, but that capital could never have existed without labor.  Hence . . . labor is the superior–greatly superior–of capital.” — Abraham Lincoln

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Site administrative account, so probably Corwin, Felix or DD-B.

0 thoughts on “Just felt like quoting…”

  1. I’d hate to put the two on a significance continuum, but I’ll concede that labor is more valuable than capital. In fact, I’d argue that labor is real–a necessity, while capital is a social construct–a contingency. If that makes one “superior” to the other, so be it.

  2. Only for sufficiently ignorant definitions of “labor” and “capital”.

    And of course Abraham Lincoln was renowned as an economist….

  3. I’d say it’s correct in spirit, but it’s using definitions of ‘labor’ and ‘capital’ that are unequally broad. If we give labor its natural definition (something along the lines of ‘human time and effort applied to a probem’), then thing we compare it to ought to be ‘access to resources’…which is one way of interpreting ‘capital’, but I’m not convinced that capital is the best word for that purpose.

    There are relatively few endeavors in which labor produces something out of nothing at all, requiring /no/ input of resources. The farmer needs land and seeds, even if the social context for getting those has nothing to do with ownership or capital. All the same…resources are pre-existing. Labor can transform them from one form to another. Labor, and specifically SKILL (capacity to labor effectively?), is what creates value, and it isn’t bound to a constant. Accumulating resources is just a matter of moving them from one place (or control) to another. Become more skilled means that more skill exists in the world. I think there’s a good argument to be made that this makes the pursuit of skill more of a general good than the pursuit of resources.

  4. My goodness, folks, Lincoln wrote that (if my memory serves at all) in the context of a debate concerning land speculation and monied interests (banks and industry) pitted against craftsmen (in the East) and farmers and their allies (in the “West”). Lincoln certainly was not using the terms in would shortly be identified as a socialist context. (This identifies Lincoln primarily as a Whig, and an ardent Republican more on slavery than any other platform issue).

    That said, Tim @ 2, one need not be an economist to have an insight into a basic social relationship. Hell, Locke makes the same argument in describing the state of nature in the Second Treatise on Government. There’s all this land, belonging to everyone, and the resources on it, belonging to anyone. In Locke’s argument (a radical one at the time, to be sure), it is the act of improving this land in some way that one gains a moral right to an exclusive claim, and hence explains the origin of property. By the sweat of one’s brow and the muscle of one’s labor, one acquires property. Hence, labor precedes property quite matter-of-factly. The problem arises of course, and Locke cannot explain, how it is that so few own all the property and so many do not, and BANG — property relations are forever frozen at some point — so that even persons who would hunt or farm on Crown land cannot so acquire property.

    No tenants, no rent. No workers (or technicians), machines do not work. No consumers, no production. No salespeople, no sales. Over and over again, no workers, capital does nothing. Doesn’t matter who writes, doesn’t matter what sector you analyze, labor antecedes capital, which is dependent upon labor. Given that “the commons” sorta never qualified as capital, the same cannot be said in the inverse.

    Lincoln was making a rhetorical argument in a battle in which he and Thomas Jefferson and the Knights of Labor and the Knights of St. Crispin form a continuum; while Alexander Hamilton, William McKinley, Herbert Hoover and Ronald Reagan form a continuum on the other side. No doubt which side has been historically ascendant. Just goes to show that Charles Lindblom was right well before he wrote his little book.

  6. This topic reminds me of the Enron and how they valued their conceptual assets based on Mark to Market methodology.

  7. While I tend to agree that labor is more basic than capital, I like the idea that energy is also a critical economic ur-element, which I suppose I must have heard from some economist someplace, but which is rarely discussed so far as I know*.

    I don’t think that energy is the sole factor in the didactic way that various historical economists have written about labor or capital or (heaven help us) currency, but it’s certainly very fundamental, one might almost say primal.

    Consider that the whole world is in an extended crisis because of multiple factors that boil down to lack of energy. The whole fossil fuel thing is obvious, of course, but it should be said as a given that the current economic craziness is due almost entirely to energy costs**.

    Similarly the increasing pollution in developing nations arises because keeping industries clean is not energy-efficient, and thus costs too much money for them to do. This is perhaps the key issue for world health — the combination of potential global warming impacts with the near-term effect of dirtier forms of pollution.

    Perhaps even more importantly (!), desalinization only requires relatively small amounts of capital and labor to produce potable water, but requires large amounts of energy. The issue of drinking and irrigation water is turning out to be one of the key international problems of the 21st century. We have an essentially infinite source of water at hand, but it’s not potable without excessive energy expenditure, and so its just not cost-effective to use desalinization in most parts of the world***.

    So from this point of view, you can regard transportable kilowatt-hours almost as a kind of currency which has its own innate value. I don’t suggest it would be a good idea to tie currency to kwh, but it’s always nice to see value in the economic system someplace…..

    —————-

    *But as you can tell I am not an economist, and my economic reading was confined to the classics, not to current economists, so I really don’t know how popular this notion may be.

    **Yeah, it’s also due to other forms of derangement in the US-centric world economy along with stupid US political decisions over the last 8 years, but that’s interfering with my argument :)

    ***There are some nice nanotech developments coming that might help solve this problem without inventing magic energy sources, but for now I think they don’t exist as industrial solutions.

  8. But by the classic definition, energy is a commodity (has a use value, an exchange value, units are interchangeable, and is produced for exchange). It maybe a KEY commodity, but it is a commodity, and one that still does not have the unique characteristic of labor: that of increasing the value of other commodities.

    And before you object to that last clause, think about it carefully, and remember that there is a difference between the *creation* of value and the *transfer* of value.

  9. Oh, I agree energy is qualitatively different from labor, and a notion of economics that ignores labor is silly. As you say, energy really is a commodity, and the most fungible commodity that has any inherent value at all, to boot.

    However, considering it to be a commodity like steel or oil or pork bellies misses the point, too. Energy (taking this vague term to mean electricity for simplicity) is key because:

    a) it multiplies the productivity of labor and capital in proportion to its application to almost any industrial process.

    b) it comes in many forms and from many sources, and it can be transmuted into virtually any other commodity. Not by fission or fusion, by the way, I mean most concrete commodities are susceptible to proportionate increases in production with increased energy input into their processes, and most commodities have multiple production paths from other commodities, some of which are often economically enabled by increased energy inputs.

    It’s also distinct from most other commodities in coming in multiple forms and from multiple sources, being more readily transportable than other commodities, and incapable (in the form of electricity) of being stored or stockpiled like other commodities.

    I’d say it’s arguable that the maintenance of an electrical infrastructure carrying satisfactory amounts of power to individuals and businesses is the single most importal social service a government or state can provide to its citizens.

    These things taken together, I think, make energy considerations crucial to any national or international economic plan, and to any underlying economic theory that has any pretension of being applicable to the modern world.

    That said, it’s reasonable to me to suggest that energy is secondary to labor. One reason is because the purpose of economics is to provide satisfactory resources for individuals and groups of individuals, and individuals cannot really contribute anything to the system but labor when all is said and done. And too, energy is produced from some combnation of labor and capital; it doesn’t just fall out of the sky…. (oh wait, it does, doesn’t it :))

  11. It depends on what you are trying to do though.
    If you are trying to produce basic necessities such as food, clothing, and shelter then labor is by far more essential (if we are considering that the resources for producing these things ie seeds, fabric, and building materials are available to begin with. If not, than you have to have capital to buy them with.)

    However, if we are talking about producing a work of art or entertainment than the individual
    who is going to be creating this work will need to be subsidized with capital to meet his daily needs so that they can spend their labor creatively rather than on growing food, sewing clothes, and building and repairing their house.

  12. Lewis @ 11: “if we are talking about producing a work of art or entertainment than the individual
    who is going to be creating this work will need to be subsidized with capital to meet his daily needs …”

    Where do I sign up?

  13. I’ve always thought being a patron would be kinda neat, but would require at least a half-share of anything produced.

  15. Ethan @ 14: Never heard that. It maybe leaves a few intermediate steps out, but, yeah, I’d say that’s true. Source?

  16. Hi Steve,

    That was Ayn Rand.

    Glad to hear your back from south of the border! I still don’t have my new Vlad book yet. I have to go to the bookstore Friday.

  18. skzb@5

    Much appreciation. I guess even overly-serious pedants can still make a cogent point. (I’m hoping to have a smashing success in this mold with the book I’m wrestling to write. Working title: “Jesus, Jefferson, Marx & the Elves.”)

    Glad to hear the operation was a success. Fascinating look at the health care system in orientalist mode.

  19. re : where can I sign up

    In Canada I think. Otherwise, I guess it’s back to the cardboard sign that says “Will write fantasy for food.” (Don’t you get an advance from your publisher?)

  21. 11, 12, 19

    The Canada Council, which provides funding for the arts, has a reputation for funding the controversial over the conventional amongst the artists I know. The ability to write a good proposal also appears to be more important than artistic merit. Thus it is far easier for an artist to get a grant to nail dead bunnies to poles then leave them to decay in a public space than for a painter to get funding to cover food and rent for a few months, as long as the dead bunny artist is better at making a convincing arguement than the painter.

    It also appears certain artists will be favoured over others. This may just be a matter of funding the unprofitable (unpopular), with the theory being that certain types of artists can sell their work to the public while others cannot.

    Like all government funded operations, the amount of political interference varies from government to government. With our current government I expect funding to increase for painters of cowboys, clowns, sad-eyed children and black velvet elvii (is that the proper plural of elvis?). Projects involving decaying meat will not receive funding unless it can somehow be shown to increase returns for Albertan cattle producers or oil companies.

  22. This is going to be sloppy, but what matters more than “labor” in its loosest definition is a quality of successful execution. “Do” beats “try”; there is a further confounding factor of luck (both good and ill). I am not sure what word best makes that distinction. “Success” has too much baggage.

    Heinlein had a good counterpoint about putting a great deal of incompetent labor into producing an inedible meal. The value of the labor, so to speak, matters greatly. I’m sure you have an answer for that, I apologize if I’m being banal or boring, but I found Capital to be so — so I’m probably an irredeemable philistine.

    I agree that capital comes a distant second, and can be pissed away by wrong living or wrong labor.

  23. *yawn*

    Michael, no one has ever said that the value of a commodity was related to the amount of labor that went into producing it. What Adam Smith, and Ricardo, and the other classical political economists (on whom Marx based his work) said was that the value of a commodity was determined by the amount of labor *necessary* to produce it; leaving Mr. Heinlein with, if you will, pie on his face.

  24. Not sure that pie hits him square in the face, because “necessary” is not single-valued in the real world. But thanks for replying even when tired.

  25. Define “amount of labor *necessary* to produce something”.

    The best in the world can do it in one day.

    The tenth best can do it in one week.

    The ab0ve-average practitioner takes 3-6 months.

    The average practioner can’t do it at all.

    (BTW, have you mailed my book yet?)

  26. Seth @ 25: For producing commodities (and remember we are speaking specifically of ‘commodity production,’ something else Mr. Heinlein chose to ignore) it is taken as a society-wide average, including the inevitable rejects (wasted labor) and so on. Something where the quality of labor invested makes a significant difference on the quality of project is by definition not a commodity.

    Yes, your book finally went into the mail; sorry for the delay.

  27. OK, so anything that requires craft is not a commodity?

    I understand these are approximations, and I always have. A once-good-friend of mine used to make oatmeal chocolate chip cookies for a small Mpls bakery.

    Well, cookies are a commodity in a typical economist’s’ eyes, I’d expect.

    But it turns out making oatmeal chocolate chip cookies is tricky. Or so it seems. The bakery stopped making them when she had to retire due to allergies; the recipe wasn’t enough.

    Steve, I know you don’t think everything done with human effort is a commodity, but I think that sentiment was another thing Heinlein’s character was taking a shot at with the pie. Have you read the essay “Shop class considered as soulcraft”? I’ll dig up the URL after work. It’s something you might like and includes some Marxian aspects.

  29. A commodity is something with an exchange value (a quantity), a use value (a quality), that is produced for exchange, and that is interchangeable with another of its type. The work of the individual artisan in today’s world may or may not be a commodity, depending. If those chocolate chip cookies were baked in order to be sold or traded, and if there is nothing to chose between one and another, I suppose they would qualify as commodities.

  30. What there is to choose between one and another cookie she made is minimal, I’ll agree, ignoring bad batches that never saw daylight.

    But I’ve been looking for chocolate chip oatmeal cookies, specifically, for twenty-plus years now, and I’ve never found them. I choose this as an example of a failure of the commodity label as you frame it.

    Chocolate chip oatmeal cookies != chocolate chip cookies; chocolate chip oatmeal cookies != oatmeal cookies. Both of the latter are things that can be found in the marketplace.

    The intention of the term “commodity” is to describe fungible members in a class that has approximately stable market behavior across some domain, I think. There are ontological-epistemological as well as some practical complications, but that’s probably not something to be taken up here.

  31. Or, alternately, from what you say, the cookies she baked might not have been a commodity. Some things really ARE pretty simple.

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