One of the central tenets of Marxism is the labor theory of value, which states that the value of a commodity is determined by the amount of “socially necessary labor time” required to produce it. In this framework, labor itself becomes a commodity—something that can be bought and sold in the marketplace.
Marx argues that, under capitalism, workers are forced to sell their labor power to capitalists, who exploit them by paying wages that are less than the full value their labor produces. This difference—or “surplus value”—is appropriated by the capitalist as profit. However, this analogy between labor and commodities reveals deep flaws when examined critically.
According to Hayek, economic freedom, including the freedom to choose one’s work and negotiate wages, is essential for political freedom. His critique implies that the Marxist approach to labor, which treats it as a commodity to be controlled by the state, is fundamentally flawed and dangerous to individual liberty.
Polanyi criticizes the commodification of labor because it reduces human beings to mere inputs in the production process, ignoring their social and moral significance. He argues that treating labor as a commodity is unnatural and harmful, and leads to social disintegration and exploitation.
The Strange Case of Labor as a Commodity
Again, according to Marx, labor power is properly treated as a commodity that workers sell in exchange for wages. But this commodity is unlike any other. Marx himself acknowledges that labor power is unique because it is tied directly to human beings; it cannot be separated from the person who provides it. This intrinsic link between labor and the worker creates several contradictions in Marxist theory.First, if labor power is a commodity, it is a very strange one indeed. According to Marx, this commodity is always sold below its value. In other words, workers are constantly selling their ability to work for less than it is worth, generating surplus value for the capitalist. But this raises a fundamental question: If labor is a commodity, why is it the only commodity that is consistently sold below its cost? In any other market, selling a commodity below its value would be considered an unsustainable business practice, leading to bankruptcy. Yet in Marx’s theory, this is not only common but necessary for the functioning of capitalism.
This notion implies that workers are essentially “stupid businessmen” who sell their commodity—labor—at a loss every working day. This characterization is not only demeaning, but also illogical. It is difficult to conceive of any rational actor, let alone an entire class of people, who would consistently engage in such a self-defeating economic practice.
In other words, if we accept the premise that labor power is a commodity, then we must also accept that workers are engaged in a very peculiar form of business—one where they consistently accept less than the market value for their product. This runs counter to basic economic principles, where sellers seek to maximize the price they receive for their goods or services. The idea that an entire class of people would willingly and consistently sell their labor below its value defies logic and undermines the credibility of Marxist theory.
To illustrate the absurdity of treating labor as a commodity, consider the example of a self-employed plumber. Plumbers who operates independently do not sell their labor power to a capitalist. Instead, they provide a service directly to customers and charge a fee for the work they do. In this scenario, plumbers are both the owners of the means of production (tools and skills) and the providers of the service. Plumbers control the price of their labor.
According to Marxist theory, however, self-employed plumbers would somehow be selling their labor power below its value, even though they set their own rates and work conditions. This makes little sense. Independent plumbers, acting as their own “capitalists,” would naturally aim to charge a price that covers their costs and provides a profit margin. There is no inherent reason why their labor power should be sold below its value, and the concept of surplus value becomes irrelevant in this context.
The Socialist Experience: Selling Labor Below Cost
Marxists argue that the exploitation of labor is inherent to capitalism and that socialism would rectify this by abolishing private ownership of the means of production. However, the experience under socialist regimes in places such as China, Cuba, and the former Soviet Union tells a different story.Even in these ostensibly Marxist societies, workers continued to sell their labor power in exchange for wages. The state, rather than private capitalists, controlled the means of production and determined the distribution of surplus value. However, this did not eliminate the fundamental Marxist critique that labor was being sold below its value. In fact, strict Marxists should argue that this exploitation continued, with the state acting as the new capitalist, appropriating surplus value from the workers.
Marxism as Sophism
The entire Marxist framework rests on the premise that labor is a commodity. If labor is not a commodity, the logical consistency of Marxism collapses because its key concepts—surplus value, exploitation, contradictions in capitalism, and the inevitability of socialist revolution—lose their foundation.- Surplus value cannot be calculated in the way Marx described, undermining the concept of capitalist exploitation.
- Exploitation of workers, as Marx defined it, cannot occur if there is no surplus value being extracted from labor.
- The contradiction between productive forces and production relations may not exist in the form Marx theorized, removing the driving force behind the predicted collapse of capitalism.
- The justification for a socialist revolution is weakened, as the proletariat may not be experiencing the chronic exploitation that Marx believed would lead to revolutionary change.