The Value-Creating Capacity of Skilled Labor in Marxian Economics

Abstract

According to the most widely accepted explanation of the increased value-creating capacity of skilled labor in Marxian economics, an expenditure of skilled labor represents a simultaneous expenditure of both the worker's present simple labor and apro rata share of all past labor spent on and by the worker acquiring the skill. First popularized by Hilferding, this solution to the so-called "reduction problem" has been elaborated and reaffirmed in recent years by several theorists. In assessing the validity of the Hilferding accounting procedure, though, little attention has been paid to the question of how the procedure interacts with Marx's theory of the value of labor-power to explain the production of surplus-value. An analysis of that issue reveals that the Hilferding approach is fatally flawed. It contradicts both Marx's explanation of the origin of surplus value and common sense, and it causes more theoretical problems for the labor theory of value than it solves. More generally, an analysis of the source of the theoretical difficulties encountered by the Hilferding procedure suggests that there may be no solution to the reduction problem which is simultaneously consistent with both Marx's theory of the value of labor-power and his general theory of value. That is, the reduction problem may be insoluble within the framework of Marx's version of the labor theory of value.