Compendium: A Critique of Labour Vouchers and Time-Based Currencies

The Work-Standard was never designed to be operating according to the paradigms of Labour Vouchers and Time-Based Currencies. Both pseudo-currencies were developed as products of Utopian Socialist endeavors by people like Robert Owen and Josiah Warren at the height of Utopian Socialism in the 19th century. In their most fundamental form, their monetary schemes revolved around the notion that any Currency can be pegged to something as unfathomable as measuring units of Zeit (Time). True Arbeit (Work) and true Geld (Money) were neglected for being misidentified as Kapital within those schemes and a preliminary study into their historical origins and purpose will reveal why.

Labour Vouchers exist not as a true Currency per se but as a type of ticket or certificate that can only be used once. As soon as somebody has used them, the Labour Vouchers are destroyed and can no longer be reused. This implies that the Labour Voucher is an unreliable Store of Value for use on a later date. It also does not help that Labour Vouchers share the same flaw as Time-Based Currencies insofar as they try to derive their Value from quantitative units of time. An illustration of the flaw itself is necessary for clarification.

Imagine there are two people working within the same institution. One person decides to work for seven hours, the other for twelve hours. Both are rewarded (as opposed to ‘being paid’) Labour Vouchers. The Labour Vouchers in question were given based on the amount of hours devoted to their recipients’ respective shifts on that day. Those Labour Vouchers can then be spent on goods and services, the Values of which are denominated according to differing amounts of time.  

The problem with the concept itself is discernible from its basic premise. Time is not a reliable metric for gauging the Value of something and by extension as guide for setting its Price. Having goods and services manufactured within a short amount of time is tantamount to allowing unneeded Appreciation of their Prices. That literally renders Labour Voucher worthless. The opposite is also true for the Depreciation of Prices: some goods and services are more complex and intricate than others, requiring larger amounts of time devoted to their creation.

It is unjust because what happens if the person who worked twelve hours only did so because of the complexities of their tasks, whereas the other worked seven hours for reasons related to their personal life? Why should someone claim that the Value of somebody’s profession is more important than another profession? Would this not set a precedent for a Nietzschean “Eternal Recurrence” of the Marxist “Class Struggle?”  

Such questions paraphrase the historically relevant argument that had once been proffered by Karl Marx in Poverty of Philosophy, particularly its discussion on the concept of Currency. In it, Marx’s criticism toward the concept of Labour Vouchers is inclusive of the concept of “Time-Based Currencies” by Josiah Warren since Warren was also operating also similar parameters as Owen’s Labour Vouchers. He pointed to the attempt made by Joseph Proudhon as essentially repeating the same failures that made the previous two attempts obvious:

To say that, of all commodities, gold and silver were the first to have their value constituted, is to say, after all that has gone before, that gold and silver were the first to attain the status of money. This is M. Proudhon’s great revelation, this is the truth that none had discovered before him.

If, by these words, M. Proudhon means that of all commodities, gold and silver are the ones whose time of production was known the earliest, this would be yet another of the suppositions with which he is so ready to regale his readers. If we wished to harp on this patriarchal erudition, we would inform M. Proudhon that it was the time needed to produce objects of prime necessity, such as iron, etc., which was the first to be known. We shall spare him Adam Smith’s classic bow.

But, after all that, how can M. Proudhon go on talking about the constitution of a value, since a value is never constituted by itself? It is constituted, not by the time needed to produce it by itself, but in relation to the quota of each and every other product which can be created in the same time. Thus the constitution of the value of gold and silver presupposes an already completed constitution of a number of other products.

It is then not the commodity that has attained, in gold and silver, the status of “constituted value,” it is M. Proudhon’s “constituted value” that has attained, in gold and silver, the status of money.

Let us now make a closer examination of these “economic reasons” which, according to M. Proudhon, have bestowed upon gold and silver the advantage of being raised to the status of money sooner than other products, thanks to their having passed through the constitutive phase of value.

These economic reasons are: the “visible tendency to become dominant,” the “marked preferences” even in the “patriarchal period,” and other circumlocutions about the actual fact – which increase the difficulty, since they multiply the fact by multiplying the incidents which M. Proudhon brings in to explain the fact. M. Proudhon has not yet exhausted all the so-called economic reasons. Here is one of sovereign, irresistible force:

“Money is born of sovereign consecration: the sovereigns take possession of gold and silver and affix their seal to them.”

The significance of Marx’s objections toward Labour Vouchers stemmed from his own observations on the state of technology in the 19th century. He understood that the concept failed to account for the emerging developments of industrial technologies in the 19th century that would later be refined in the 20th century and even today in the 21st century. Industrialization in the Western world was leading to a precedent where goods and services can be produced quickly and in large quantities. That in turn undermines not only the notion of determining the Value of something based on quantitative measurements of time, but will also alter everyday understandings of its Value in relation to its Price.

The most well-known example has been Marx’s predictions of automation in the Fragment on Machines from The Grundrisse.

As long as the means of labour remains a means of labour in the proper sense of the term, such as it is directly, historically, adopted by capital and included in its realization process, it undergoes a merely formal modification, by appearing now as a means of labour not only in regard to its material side, but also at the same time as a particular mode of the presence of capital, determined by its total process — as fixed capital. But, once adopted into the production process of capital, the means of labour passes through different metamorphoses, whose culmination is the machine, or rather, an automatic system of machinery (system of machinery: the automatic one is merely its most complete, most adequate form, and alone transforms machinery into a system), set in motion by an automaton, a moving power that moves itself; this automaton consisting of numerous mechanical and intellectual organs, so that the workers themselves are cast merely as its conscious linkages. In the machine, and even more in machinery as an automatic system, the use value, i.e. the material quality of the means of labour, is transformed into an existence adequate to fixed capital and to capital as such; and the form in which it was adopted into the production process of capital, the direct means of labour, is superseded by a form posited by capital itself and corresponding to it. In no way does the machine appear as the individual worker’s means of labour. Its distinguishing characteristic is not in the least, as with the means of labour, to transmit the worker’s activity to the object; this activity, rather, is posited in such a way that it merely transmits the machine’s work, the machine’s action, on to the raw material — supervises it and guards against interruptions.

Not as with the instrument, which the worker animates and makes into his organ with his skill and strength, and whose handling therefore depends on his virtuosity. Rather, it is the machine which possesses skill and strength in place of the worker, is itself the virtuoso, with a soul of its own in the mechanical laws acting through it; and it consumes coal, oil etc. (matières instrumentales), just as the worker consumes food, to keep up its perpetual motion. The worker’s activity, reduced to a mere abstraction of activity, is determined and regulated on all sides by the movement of the machinery, and not the opposite. The science which compels the inanimate limbs of the machinery, by their construction, to act purposefully, as an automaton, does not exist in the worker’s consciousness, but rather acts upon him through the machine as an alien power, as the power of the machine itself. The appropriation of living labour by objectified labour — of the power or activity which creates value by value existing for-itself – which lies in the concept of capital, is posited, in production resting on machinery, as the character of the production process itself, including its material elements and its material motion. The production process has ceased to be a labour process in the sense of a process dominated by labour as its governing unity. Labour appears, rather, merely as a conscious organ, scattered among the individual living workers at numerous points of the mechanical system; subsumed under the total process of the machinery itself, as itself only a link of the system, whose unity exists not in the living workers, but rather in the living (active) machinery, which confronts his individual, insignificant doings as a mighty organism. In machinery, objectified labour confronts living labour within the labour process itself as the power which rules it; a power which, as the appropriation of living labour, is the form of capital.

The transformation of the means of labour into machinery, and of living labour into a mere living accessory of this machinery, as the means of its action, also posits the absorption of the labour process in its material character as a mere moment of the realization process of capital. The increase of the productive force of labour and the greatest possible negation of necessary labour is the necessary tendency of capital, as we have seen. The transformation of the means of labour into machinery is the realization of this tendency. In machinery, objectified labour materially confronts living labour as a ruling power and as an active subsumption of the latter under itself, not only by appropriating it, but in the real production process itself; the relation of capital as value which appropriates valuecreating activity is, in fixed capital existing as machinery, posited at the same time as the relation of the use value of capital to the use value of labour capacity; further, the value objectified in machinery appears as a presupposition against which the value-creating power of the individual labour capacity is an infinitesimal, vanishing magnitude; the production in enormous mass quantities which is posited with machinery destroys every connection of the product with the direct need of the producer, and hence with direct use value; it is already posited in the form of the product’s production and in the relations in which it is produced that it is produced only as a conveyor of value, and its use value only as condition to that end.

In machinery, objectified labour itself appears not only in the form of product or of the product employed as means of labour, but in the form of the force of production itself. The development of the means of labour into machinery is not an accidental moment of capital, but is rather the historical reshaping of the traditional, inherited means of labour into a form adequate to capital. The accumulation of knowledge and of skill, of the general productive forces of the social brain, is thus absorbed into capital, as opposed to labour, and hence appears as an attribute of capital, and more specifically of fixed capital, in so far as it enters into the production process as a means of production proper. Machinery appears, then, as the most adequate form of fixed capital, and fixed capital, in so far as capital’s relations with itself are concerned, appears as the most adequate form of capital as such. In another respect, however, in so far as fixed capital is condemned to an existence within the confines of a specific use value, it does not correspond to the concept of capital, which, as value, is indifferent to every specific form of use value, and can adopt or shed any of them as equivalent incarnations. In this respect, as regards capital’s external relations, it is circulating capital which appears as the adequate form of capital, and not fixed capital.

For Marx, the precedents for automation, artificial intelligence and other recent information and digital technologies were being set into motion as he and Friedrich Engels conceptualized their interpretation of Socialism. The same can also be said for the more recent developments within financial, information and digital technologies after the death of Bretton Woods, from automated software programs to artificial intelligence. But while he was unable to envisage the specifications of those technologies, he was open to the possibility that the Liberal Capitalists would not be in the best position to control its development. What he did know, however, was that advancement of technology will lead to the growing abstractions of Kapital as the conception of Currency under Liberal Capitalism.

It should be noted that similar conclusions were also made by people like Oswald Spengler in the “Money Chapter” from Volume II of The Decline of the West as well as Ernst Jünger in Der Arbeiter. The growing abstraction of Kapital can be traced back to the interwar period between the two World Wars, as Financial Markets became intertwined with the affairs of the major economies on Earth, which made the Great Depression inevitable.

Today, the latest trends in the abstraction of Kapital have been the proliferation of Derivatives as a Liberal Capitalist Financial Instrument (LCFI) and the more recent acceptance of Cryptocurrencies like the Bitcoin. The conceptualization behind Cryptocurrencies can be traced back to emerging developments in computer, information, and financial technologies after the death of Bretton Woods. If a generalizable trend can be drawn from the conclusion of Marx and Engels on the nature of Kapital, it is that there will come a time in the future where Kapital itself is so abstract that its existence is artificial, divorced from any physical presence in reality. The contemporary example as of late has been the ruminations among Liberal Capitalists about the “digitalization” of Kapital, of reducing Kapital to a binary sequence within the digital realm.   

Categories: Compendium, Economic History, Philosophy

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