Applications of Reciprocal Theory of Value and Work Theory of Money (Pt. I of II)

The Reciprocal Theory of Value (RTV) and the Work Theory of Money (WTM) are the theoretical foundations from which the Work-Standard was built upon. I devised RTV and WTM because I was left unconvinced and unsatisfied by the various Theories of Value and Theories of Money that have been posited over the centuries. The biggest aspect that the competing Theories of Value had in common is a problem introduced since the Enlightenment: the “Subject/Object Duality” and its relationship to the “Mind-Body Problem” as posited by René Descartes. Basically, the Subject/Object Duality presents the Individual–what The Work-Standard (2nd Ed.) refers to as the Self–as a “Subject” who exists separately from their surroundings, the “Object.” What the Enlightenment philosophers sought to ascertain was whether there is a single unifying reality to understand the Object and with as little interference from the Subject as possible.

Basic Diagram of Subject/Object Duality

Outside of philosophy, the natural sciences have had the most to gain from studying Life in this manner. The most obvious example is the Scientific Method, from creating “Scientific Hypotheses” out of empirical observations to testing isolated Experimental and Control Groups and developing conclusions based on their responses. Once there is enough evidence to support the veracity of the claims postulated by a Scientific Hypothesis, a “Scientific Theory” can then be created to provide a detailed explanation of the tested phenomenon.      

In Economics, one of the problems plaguing this particular social science has everything to do with making value-judgments from the framework of the Subject/Object Duality. Most of the competing Theories of Value over the centuries have sought to determine whether there is any Objectivity in making value-judgments about the valuations of different goods and services or whether the Subjectivity of the Individual has always been a constant factor all along. Neither conclusion made much logical sense because the basic premise of the Subject/Object Duality made casting value-judgments on a slippery slope. Even if there is no Objective way of casting value-judgments, to jump to the Subjective conclusion proved tantamount to insinuating that the economic realities of a Subject, the “Individual,” exist isolated from its surrounding Object, the “Economy.” To put another way, are all economic realities the creation of a single Individual or are the result of forces greater than that of the Individual?   

It is precisely because mainstream neoclassical economics ended up operating within those parameters that it became inevitable to assume the existence of a whole gamut of ideological rhetoric stemming from Liberal Capitalist ideology is a given. Here, we find the Liberal Capitalist conception of so-called ‘competition’, where all economic life revolves around Individuals whose actions are purely driven by the “Profit Motive” (‘the greatest Quantity of Kapital for the least Quantity of Schuld’). In this Mode of Production–Production for Profit, the Subject/Object Duality addresses why the Individual’s “Private Property-as-Wealth” exists as an entity separate from the surrounding “Common Property-as-Wealth” (which was probably where the British came up with the English word ‘Commonwealth’) or why the “Market Forces” are driven by an “Invisible Hand” that just so happens to be the “Incentives of Supply and Demand.” Every economic action in Production for Profit is done as a means to an end, never as an end in itself, constantly tempered by the struggle to prevent the Quantity of Schuld from outpacing the Quantity of Kapital. Familiar terms like “Opportunity Cost,” “Marginal Cost,” “Comparative Advantage,” “Unintended Consequence,” or “Marginal Utility” were made possible by relying on Theories of Value whose basis is centered around the Subject/Object Duality. For mainstream neoclassical economics, that meant making all value-judgments from the standpoint of the Utility Theory of Value (UTV), whose origins can be traced back to the Austrian School’s Subjective Theory of Value (STV).

Diagram of the Commodity concept according to LTV

Knowing where STV and UTV stand in the context of the Subject/Object Duality, it is not surprising that the Labor Theory of Value (LTV), in both its original conception by Adam Smith and its later revision by Karl Marx, are also operating under that Subject/Object Duality. In the contexts of Smith and Marx, LTV represented the Objective half of the Duality, arguing that there is only one way of making value-judgments. But unlike STV and UTV, LTV suffered from a flawed conceptual model where value-judgments are being made in units of time.

Marx provided his own explanations as to why LTV had to be measured by “Socially-Necessary Labor Time.” It has everything to do with how Marx dealt with the concept of “Exchange-Value,” which made the “Commodity” concept possible and Production for Profit realizable. What Marx did was introduce a new dynamic, the “Use-Value,” and in turn introduce another Mode of Production, Production for Utility. When envisaging the elimination of Exchange-Value, Marx deemed the Use-Value as being capable of existing on its own. That is because in Production for Utility, the value-judgments of all economic actions are to be determined by their perceived usefulness or uselessness, by whether they can satisfy some human need.

Another problem, which I had highlighted in my own Work-Standard critiques, is that because Production for Utility relies on the Use-Value, there has neither been a Marxist Theory of Money nor a Marxist conception of Currency. Marx arrived at that conclusion in order to argue that all economic value can then be measured in “Labor-Time,” which was also where the concept of “Surplus Value” emerged to point out that the Proletariat’s “Labor-Time” is being expended by the Bourgeoisie. The Surplus Value is not actually being defined in terms of Arbeit and Geld insofar as the Labor-Time represents another dimension to the Quantity of Schuld. The desire to tackle the Surplus Value was what led to the rise of Social-Democracy and in particular the problems of what Vladimir Lenin criticized in What is to be Done? as “Economism.” Rather than trying to promote an alternative, the Surplus Value was confronted through industrial actions for a higher Quantity of Kapital and less Labor-Time in the form of fewer hours in the workweek.

Having known about the economic history of the various Theories of Value and how they in turn relate to Production for Profit and Production for Utility, I instinctively realized that the Work-Standard cannot rely on any of the competing Theories of Value. There needed to be an entirely new Theory of Value capable of standing on its own and outline the parameters by which economic actions under the Work-Standard are conducted. My conclusions were reassured when I introduced the Reciprocal Theory of Value (RTV) because, without it, I could never have realized the Life-Energization Reciprocity (LER) Process. Conversely, without the LER Process, the Work Theory of Money (WTM) could not have been realized and the same can be said about Production for Dasein. Everything else developed naturally on its own and the Second Edition of The Work-Standard served as an attempt at describing out how everything unfolded from a simple decision of creating a distinct Theory of Value.   

At the heart of RTV lies what I have come to realize to be the most decisive aspects: the replacements of the Subject/Object Duality and the Exchange-Value and Use-Value. To eliminate the need for the Subject/Object Duality, I needed a philosophical basis from which to argue that the Subject and Object coexist as part of a single entity. Next, the Exchange-Value and Use-Value proved crucial in the conceptualization of the Commodity concept, so those two had to be eliminated as well. Those specifications were what brought me to Martin Heidegger’s Dasein concept from Sein und Zeit (Being and Time) because he presented Dasein as a concept designed to eliminate the need for employing the Subject/Object Duality outside of the natural sciences. By doing so, I was able to come up with the following:

  • Instead of the Profit Motive, there is the Dasein Motive.
  • Instead of Exchange-Value, there is the Readiness-to-Hand.
  • Instead of Use-Value, there is the Presence-at-Hand.
  • Instead of Socially-Necessary Labor Time, there is the Transvaluation of all Arbeit.
  • Instead of Surplus Value, there is the Meaningful/Meaningless Work.
  • Instead of the Commodity and its associated properties, there is the Equipmentality and the ability to determine its value and price of different raw materials based on their Reference and Relevance.
  • And instead of ending up with Production for Profit or Production for Utility, the Production for Dasein became a Mode of Production all unto itself.

Given those distinct characteristics, it was thus inevitable to come up with WTM in order to set the parameters for a distinct conception of Currency that was neither a “Commodity Currency” (Bimetallism), nor a “Fiat Currency” (Chartalism), nor a Representative Currency, nor even a conventional Cryptocurrency. WTM had to be capable of being able to make value-judgments about why the Prices of finished goods and services are in turn impacted by the Quality of Arbeit that went into them. It also needed to be true for why Quality of Arbeit affects a corresponding Quality of Geld and how both are in turn influenced by the Intents of Command and Obedience.

Furthermore, RTV and WTM were designed to function together. Both were needed to explain why and in what ways is the creation of Actual Arbeit capable of becoming its own source of wealth beyond the sale of finished goods and services for Actual Geld. Yes, in addition to the Actual Geld from sales of finished goods and services, the creation of Actual Arbeit that comes from the production of those same goods and services are also converted into Actual Geld. That was of course where the LER Process comes into play and why I was able to create the Life-Energization Reciprocal Electrification (LERE) Process to demonstrate how the Work-Standard in the digital realm and competes with most conventional Cryptocurrencies. The very notion of Actual Arbeit and Actual Geld, like their digital and military-industrial analogues, are characteristics associated with the Sociable Currency, which is pegged to the Work-Standard.  

What I would like to do in a subsequent Blog post is to discuss about the many opportunities in which RTV and WTM can be applied in the Real World. It is one thing to devise two Theories; it is another to use to them to explain Real World phenomena from the standpoint of the Work-Standard in mind. And unlike Economic History Case Studies or Conservative Socialism posts, I will be able to present historical and contemporary examples where RTV and WTM can provide better explanations about today’s economic climate.    



Categories: Financial Warfare

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  1. Revising “The Third Place” – The Fourth Estate
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