Peter Somerville

　　ABSTRACT

　　This short piece further asserts the utility of the labour theory of value, the importance of global value chains and the incoherence of the concept of ecologically unequal exchange (EUE).

　　KEYWORDS

　　Labour; exchange value

　　The dictionary definition of an exchange is “an act of giving one thing and receiving another in return”, and the term “giving” implies that the act is a free one, not forced. In a market, what is exchanged are commodities, and in a free market, where producers compete freely with one another, commodities that are exchanged tend to have the same value. Unequal exchange arises where the market is fixed in some way so that it benefits one party to the exchange more than the other - e.g. monopolies. Strictly speaking, however, this isn’t an exchange at all, because of the element of coercion.

　　Under capitalism, workers hire out their labour power in exchange for wages. In a free labour market, therefore, this exchange tends to be equal (as in “a fair day’s pay for a fair day’s work”). In a forced labour market, as, for example, under slavery, the workers are not free but forced, so again strictly speaking this is not an exchange between workers and employers (the only exchange is between slave-owners and slave buyers). So the term “unequal exchange” is inherently problematic.

　　Under capitalism, inequality arises primarily from the exploitation of labour in the production process. The source of profit, which is key to capitalist growth, is the value produced by labour, and this value is greater than what the workers receive in wages. This is a fact of production, not of exchange. The mystification here is that exploitation is hidden because the labour market appears to operate freely even though the capitalist system as a whole is coercive. Self-expanding value based on the exploitation of labour lies at the heart of capitalism’s existence.

　　As I stated in my rejoinder, Alf Hornborg rejects the labour theory of value but provides no clear critique of it. I would agree that it is only a theory but we need to see some convincing reasons for giving up on it.

　　Rather than responding to my substantive criticisms, Hornborg picks me up on two points concerning resources and energy. I was trying to find out what energy is exchanged for in EUE theory, and I confess that his account still makes no sense to me. Resources such as land and labour are obviously not the same as energy. But I just can’t see what the exchanges are here. If, for example, coal is extracted from a mine in one country and then exported to another country and burned there, a number of exchanges will have taken place. In a free market, most of these exchanges will be of commodities that are more or less of equal value. I don’t see any actual exchange of material resources or of energy here. The energy embodied in the coal is released when the coal is burned, but in material terms what has happened is that fossil fuel energy has simply been transported from one country to another, it hasn’t been exchanged for anything except as a commodity (insofar as the coal and its products have been exchanged for money). Value has been added en route, and this has been produced by labour - and the amount of this value can be calculated in terms of socially necessary labour time, which will vary according to the conditions of production. In poorer countries, the value of labour power will be lower because the socially necessary labour time to reproduce that labour power is lower, but this means that capitalists operating in those countries may be able to enjoy greater profits.

　　The concept of ecologically unequal exchange remains incoherent and therefore unable to explain what Hornborg calls “the skewed metabolism of world society.”

　　From: Capitalism Nature Socialism 2023 34 (3)

　　Link: https://www.tandfonline.com/doi/full/10.1080/10455752.2023.2174638.