Value Models

Discussion

Hegemonic vs community economies conception of value

Source:

* Article: Eskelinen, Teppo (2020). The conception of value in community economies. In Eskelinen, Teppo; Hirvilammi, Tuuli; Venäläinen, Juhana (Eds.) Enacting Community Economies Within a Welfare State. MayFly, 23-45.

URL = http://mayflybooks.org/wp-content/uploads/2020/03/ECEWAWS_final_ebook.pdf self-archived copy

The hegemonic value conception

Teppo Eskelinen:

"The capitalist conception of economic value has gained a hegemonic position. Because the hegemonic conception is rarely articulated and more typically just embedded in practices as a given, a criticism and search for alternatives should begin by making the value conception explicit. While this could be done by analysing the daily functioning of the capitalist society, there is also an explicit value conception available: the one articulated in economics. Contemporary mainstream economics is intimately connected with capitalism. Furthermore, it carries major epistemic power because this economics is the science for both describing and reproducing the capitalist order: it is then a system for reflecting, what capitalism sees as valuable.

The idea of value as it exists in contemporary economics is based on two theories seen as mutually exclusive: the labour theory of value and the subjective theory of value. More precisely, economics can be seen as being grounded on the demand-based theory of value, so that the justification narrative sees the labour theory of value as the only existing (and conceivable) alternative to it.

In other words, the conception of value in contemporary economies is based on these two ideas:

• first the dominance of the demandbased theory, and
• second the belief that the theory of value needs

to be chosen from these two mutually exclusive alternatives.

Classical political economy, including Ricardo as well as Marx, leaned on the labour theory of value (Theocarakis 2010). The classical economists assumed a theoretical entry point, according to which value refers to the amount of labour embodied in a commodity, including historical labour needed to develop the necessary physical capital. Ricardo formulated the theory as follows: ‘The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not on the greater or less compensation which is paid for that labour‘ (Ricardo 1817). ‘Labour‘ is thus a very general term for categorising human productive activity appearing in several societal and historical contexts (Mandel 1990). Furthermore, it is seen as a commensurable substance, which allows the comparability of completely different kinds of goods.

The labour theory of value has been criticised for being ambiguous about the relation between value and price (generally on the subject, see González 2013), or even as metaphysical (Robinson 1962). Yet the most influential criticism focuses on the tendency of labour theory of value to ignore the subjective valuations of market agents, in other words demand. This criticism gave rise to the marginalist school of thought and the subjective theory of value that forms the basis of neoclassical economics. According to this theory, the economic value of a given good is determined by the interplay between subjective valuations of goods (expressed though market demand) and the scarcity of these goods. Thus, the value of a given good cannot be objective and constant, like the labour theory of value suggests, but depends on the will of consumers to pay for the good.

The subjective theory of value tends to reduce all theorising on value into market transactions, in which the expressed valuations of atomistic market subjects are decisive. The theory ignores the value of things external to market goods as well as non-commodified goods, as it assumes that valuation has to be expressed within the market, if (economic) value is to exist. Indeed, the social aspect of the economy or value that the theory recognises is the existence of instrumental market relations: people might engage in exchange and contracts as they observe temporary mutual gain. Furthermore, value is seen to be consumed in the instance of transaction: whatever happens to the object after the transaction is a personal issue and beyond the scope of value theory.

On a quick look, the existing value conception, or more precisely the paradigm describing these as mutually exclusive alternatives, might sound sensible. Therefore, a critical look needs to be taken on the particular weaknesses within this conception. Both labour and subjective theory of value state, that value can be detached from the social basis which enables its production. This has a dual implication: firstly, no social patterns of care, upbringing or such, are recognised as valuable; and secondly, the social process in which economic goods are exchanged, is seen as meaningless from the perspective of determination of value. Moreover, no notion of power is incorporated in the value conception, therefore casting the hierarchies in economic processes or their unmaking as insignificant.

Additionally, the subjective theory of value functions effectively as a justification for capitalist practices, particularly because of what it omits. Two issues in this regard stand out. First off, the subjective theory of value leans on an idea of well-being, according to which well-being is always enhanced when more market preferences are met, thus forming the basis of seeing the limitless growth of consumption as a well-being endeavor means to improve well-being. Secondly, it sets no limits to how much the perceived value of different inputs can be seen to deviate, thereby giving an excuse to any magnitude of disparities.

All this leads to a need to see beyond these apparently exclusive choices. It is not necessary to base the theory of value on either a mechanical reference to the labour time used to produce the good, nor a narrow theory functioning as an excuse for capitalist practices. A better alternative is to ground economic value on the whole process, including reproduction, social interaction as a basis for well-being, together with a notion of limits to growth and consumption. I will now turn to the community economy conception of value as articulated within timebanks, to see how these theoretical points figure in that context." (https://jyx.jyu.fi/bitstream/handle/123456789/68219/1/ECEWAWS_The-conception-of-value.pdf)

Characteristics of the community economy conception of value

Teppo Eskelinen:

"Mainstream economics appears locked with the ostensible necessity to choose between the labour theory of value and the subjective theory of value. While within social science there have been some theoretical attempts to surpass this dichotomy, community economies can be seen as highly informative for these attempts, as they not only theorise, but also practice given value forms. Community economies insist in their practice on an idea of value, which would better grasp the social element inherent in economic activity. This social element of value is not reducible to either subjective notions nor mere labour time.

The task is then to explicate a theory of value from the basis of the conception embodied in practices of community economies.

Community economies should be understood as economic in the sense that there is some facilitation of exchange or organisation of resources. Further, there has to be some sufficiently shared value conception. This conception can be implicit as well as explicit, yet it will be enacted in the practices of the system. The unique form of economic value, not accepting the mainstream economic way to draw the distinction between economic and non-economic, is one of the key components making community economies stand as a distinct category.

Below, I will sketch the key aspects of an alternative (community economy) conception of value as expressed in timebanking.

‘Alternative‘ should be understood here in the sense of deviating from the hegemonic economics narrative, rather than as marginal: the conception can be widely enacted in everyday social life, yet discursively marginalised. The analysis will be based on a reading of key materials introducing timebanking.

This comprises of, first, books and reports explaining the concept and ideology. Second, different kinds of booklets, internet publications and info leaflets are used. Third, this body of texts is complemented with interviews of some long-term timebank developers. These interviews are not systematically analysed within this chapter, but rather were used as a basis on which to form a preliminary understanding of the issue.

The purpose of the analysis is then to use existing material to scrutinise a conception of value within practices of alternative economies which could extend to inform the purposes of the welfare state. The conception of value is presented in terms of what is unique in it. Therefore, it includes no separate category for use-value in general: the obvious fact that people seek services because these services are useful for them." (https://jyx.jyu.fi/bitstream/handle/123456789/68219/1/ECEWAWS_The-conception-of-value.pdf)

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