In the second chapter of "Zombie Capitalism," Chris Harman notes one of the major neoclassical and marginalist rebuttals of the "labour theory of value" (as developed by Adam Smith, David Riccardo and Karl Marx) is the idea that specialist labor operates according to a different logic than normal labor, and that there is no way of reducing expert labor units, so to speak, into unskilled labor units, so to speak. Neoclassical economists argue, in a way, that a unit of anything must easily be combined into a higher unit and by that same token, easily divisible into a lower unit, in much the same way that a gram can combine into a kilogram, or be divided, into miligrams.
The problem with the classical "labor theory of value," (as it was developed by classical economic theorists) was that not everything could be reduced to labor. For example, there are rents, investments, and other forms of economic "energy" that can be used, not just labor. Riccardo had a good rebuttal for this, which is that capital in the form of stocks or bonds or investment is merely "dead labor," or capital acquired through the prior labor of some worker at a previous time in the economic cycle. For example, Mr. X employs alot of workers to grow crops. He sells the crops for a profit. This profit is in the form of Capital and this is later invested. Ergo, this capital is a form of residual labor value. This makes sense.
But what about specialist labor. How can one compare specialist labor to non-specialist labor? Do they even operate according to the same economic rules? Is specialist labor even exploited? Many would say no. But Marx, and many others say yes. And they also say that the rules that apply to normal blue collar laborers today, eventually, over the course of time, inevitably apply to skilled laborers as well, and drive them down the socio-economic ladder. This is inevitable, and its not hard to see why. Some call this the process of "proletarianization" or "the pauperization of the working and middle classes."
Wherever you look in the economy, if you look at it over a course of time, this process invariably happens.
Harman notes that the increased wages or prices that skilled labor can charge for their skills, is something that only exists for a short period of time in an economic system. Skilled laborers could be master brewers, master carpenters, master optical lense crafters, attorneys, doctors, pharmacists, computer programers, IT folks, systems administrators, accountants, etc...
Harman notes that Capitalism, by its nature, does not want to pay higher costs for any form of labor, skilled or unskilled. It is anethama to the profit-motive. Hence, it will try to do anything it can so as to make these skills more affordable by the capitalist system, and therefore, drive down costs, even if this means ruining the wages and livelihoods of the skilled craftsmen or professionals in question.
The FIRST thing Capital will do, according to Harman (and Marx) is train new groups of workers to acquire these skills. Now, an initital problem with this is that only the skilled workers know how to perform these skilled tasks. Capitalists can't train unskilled workers to train other unskilled workers so that the latter can become doctors, lawyers, computer programers or accountants. Indeed, usually it is only the skilled workers who can train newer skilled workers. And they do this by way of apprenticeship programs, licenses, degrees. Guilds existed for this purpose, and still do, in many parts of the world and in regard to many different professions.
As such, because skilled workers can control the influx of new skilled workers, the interests of the skilled workers are maintained, albeit temporarily. Harman states that "If their skills are monopoly skills (nobody else can do them) and they produce goods (or services) that cannot be produced by unskilled workers, however many work together at the job, then those who own those goods (or services) will be able to charge monopoly prices that do not reflect labour values, but simply how much people are ready to pay." (Harman at 52, emphasis added).
Harman notes that "this will be true of certain skills and certain goods (as well as services) at any particular point in time. But over time, this labour too will be reduced to some objective ratio of other labour. Capitalists everwhere in the system will actively seek out new technologies (and methods of organization and investment, no doubt) that undermine such skill monopolies by enabling the tasks to be done by much less skilled labour. In this way, the reduction of skilled labour to unskilled labour over time is a never ending feature of capitalist accumulation. If enough unskilled labour is trained up to the level of skilled labour needed to produce particular commodities (or services) those commodities will cease to be scarce and their value will fall to the level that reflects the combination of the labour needed to reproduce average labour power and the extra costs in training." (Id. at 52, emphasis added).
Harman quotes Carchedi, another Marxian economist: "Due to the introduction of new techniques in the labour process, the level of skills required of an agent is lowered. The value of his or her labour power is then devalued. We can refer to this process as DEVALUATION of labour power THROUGH DEQUALIFICATION OF SKILLS. It is this process which reduces skilled to unskilled labour and thus (at least as far as the value of labour power is concerned) alters the exchange relations between commodities of which those different types of labour power are an input. It is this real process which justifies the theorhetical reduction of skilled to unskilled labour, or the expression of the former as a multiple of the latter..." (Id.)
"The process of devaluation through dequalification is a constant tendency in capitalist production, due to the constant need capitalists have to reduce the level of wages. On the other hand, the same techniques create new and qualified positions (the counter-tendency) which, in their turn, are also subjected to dequalification...At any moment in time, we can observe both the tendendcy (the dequalification of certain positions and thus the devaluation of agents' labour power) and the counter-tendency (the creation of new, qualified positions for which agents with a high value of labour power are needed." (Id. quoting G. Carchedi, "Frontiers of Political Economy at 133).
I have seen this process unfold throughout human history in regard to skilled laborers, but especially today in the IT, legal and medical community, which is interesting, because my generation (Generation X and Y) was told that these careers would be the quickest way out of the working class and into the middle class. It seems that the forces of globalization have put a damper on these dreams, so to speak.
For example, I have a good friend in the IT field. Originally, only a few people knew how to do anything related to computers, which meant that those who could do IT work could make a killing in the United States, or any other nation, for that matter. What's happening, though, is that the labour pool of potential IT workers has inundated the world, due to the spread of computer education labs throughout the world and computer tech teaching programs and university programs. Furthermore, many of the more complicated processes one once needed an IT person for, are now done away with, because these functions have been standardized and mass produced (anti-Virus protection, other services and packages), such that the need for a highly skilled computer person, at any stage of the computer process, is necessarily minimized. New IT management agencies are coming into the fold and are undercutting the individual operator. Businesses now only do business with established agencies, and these serve to push down the costs and wages of even the brightest and most creative computer person, many of whom are now drawn not just from the US, but from all over the world. This, too, causes wages to drop.
In the legal field, it used to be the case that a JD and a license guaranteed you a decent wage and shot at the middle class. No longer. Law Schools are dumping massive numbers of law school graduates into the economy with lightening speed, many of whom cannot find a job. This massive "reserve army of legal experts" serves to drive down the wages and benefits of first year associates in many firms, as well as the crap they have to deal with on the job. This has never before been seen in the legal field. Lawyers treated like fungible commodities. Like blue collar workers from 100 years ago. It scares the crap out of alot of people.
Basic legal research and the ability to synthesize and integrate competing caselaw and statutes is an important skill taught to most lawyers, as was the ability to operate gracefully in a law library and "shepardize cases," i.e., find out which case is the newest and most modern manifestation of the rule or law at issue. Lawyers once spent many years perfecting these skills. Now, electronic programs like Westlaw and LexisNexus have served to minimize the time and drastically increase the number of attorneys who can do basic and even expert-level legal research. This drives down lawyer wages (of course, many readers of mine will be very happy about this...but this can also have the effect of lowering the quality of service rendered, in many ways).
There are now law school graduates graduating from all over the country who do nothing but specialize in wierd, esoteric aspects of legal services. For example, I know many lawyers that do nothing but work as document reviewers. These folks sit behind a giant computer, all day long, and use a special computer program to seek-out key words in thousands and thousands of pages of emails and business documents all day long. They charge next to nothing for these services, like $30/hour, and this is what they are forced to do, because they cannot find a real attorney job. This drives down the wages of lawyers, but also serves to maximize the profits of corporations that hire them, as well as the profits of the large law firms that utilize such services.
There are also massive numbers of lawyers who are semi-employed and do nothing but engage in part-time, piece-bit work for various firms all over their jurisdiction. For example, many may specialize in, let's say, workers compensation legal research, or bankruptcy forms, or writing appellate briefs. They can't do or haven't been trained in anything else, but they specialize in these functions and they perform these things for various law firms each weak, doing many, many different pieces of bit-work here and there. This causes the profits of law firms to increase, and the wages of entry-level associates, as well as many mid-level associates, to decline. (Partners and Big Firms, as well as big corporate clients, gain, in terms of decreased costs).
Another new thing in the legal field is outsourcing. Many law firms are outsourcing legal research, legal form drafting (motions, interrogatories, requests for production of documents) to low income, Third World countries that share a commonlaw legal system with the United States, such as India or the Philippines. The Rules of Professional Conduct mandate that a locally licensed lawyer manage or oversee these acts (i.e., if you are licensed in PA, and outsource research to Manilla, you need to have a PA licensed lawyer overseeing the Indian researcher), but this is hard to do and there are many loopholes. Again, this has the effect of lowering the wages of the legal profession.
Another thing I see is that many attorneys in many big firms do nothing except check for "conflicts of interest." Here, they sit behind computers all day long and enter constant streams of data pursuant to large, unwieldy cases. They enter the names of every plaintiff, every defendant, into the computer. But that's not all. They have to research the names of every corporate entity and pull up and enter the names of their parent companies, subsidiaries, etc...They have to pull up the names of the law firms involved, the attorneys involved. Many companies have been sold, so they have to research who owns what company now, etc... And this all needs to be checked with firm databases, to ensure that there is no conflict of interest with a current Firm client or attorney. Normally, paralegals or secretaries could do this. The work is basic, tedious and mind-numbing, not to mention highly boring. Its basically hyper-glorified data-entry.
But more and more firms want attorneys to do this, and since there is a massive "reserve army of unemployed attorneys" in the market, willing to work for incredibly low wages, they jump at the opportunity to do this, even if it means throwing their education away, wasting their skills at critical thinking, writing, oral communication and the like. And this, too, no doubt, has the effect of lowering the entry-level wages and entry-level expectations of law school graduates throughout the nation.
We can never, ever forget the fundamental rule of economics, pertaining to supply and demand. In a vacuum, you can increase prices by increasing demand, or decreasing supply. If you decrease supply, the item or service becomes scarce, and you can charge higher values for the selling of said thing. If the thing is in great demand, and you can provide it in sufficient quantity, you can make money in this way, too.
But you can manipulate markets by playing with supply. If workers are demanding too much in terms of money, one of the key things employers have done throughout history, has been to increase the supply of laborers. This means they are competing with eachother for jobs and undercutting eachother. Because its harder to get a job, each person will feel compelled to accept a lower wage, and harsher treatment, too, by the way. (this is why uber-Kapitalists and their intellectual lap-dogs, libertarians, love the concept of "free movement of labor"---they can multiply labor supply and thus drive down wages anywhere in America or the world, almost at will---at least this is what they want).
The same thing happens with personal computers. When they were new, they were expensive, and relatively more rare. Today they are all over the place and they are not only more powerful, but also much cheaper to buy. Workers working for such companies are also making less money, too. Its a constant drive to the bottom, with capitalism (law of diminishing returns) and the system is always looking for ways to prevent this "bottom falling out" from happening, but they are, in ways, running out of options these days...
In any event, many of you may be happy that lawyers are getting screwed in this manner, by making less money in terms of lower wages. But the fact of the matter is that the average price for legal services isn't coming down for the average purchaser of said services. In fact, it is increasing, relative to inflation. And yet real wages for everybody else are not. So this means your costs for legal service are actually going up. What it ALSO means, though, is that fewer and fewer lawyers are able to afford a middle class lifestyle, and the feel let down and abandoned by our system as a result. Many are becoming radicalized. Perhaps even more so than in the 1960s, because back then, we didn't have a recession or globalization. Its something totally new in American politics and we have no idea what's going to happen here.
It also bodes poorly for the American economy. We have seen the blue collar workers fall victim to the forces mentioned above. We have seen unskilled laborers fall victim to the forces of mechanization, the inflating of the "reserve army of labor" through outsourcing and immigration, so as to reduce the negotiating power of labor to command a higher wage. We have seen how specialization can lower costs, but also, in many ways, gradually decrease wages, too. And now these economic forces which have permeated and sucked dry the lifeblood of the American economy are now on the doorsteps of the IT profession, the Medical Profession and the Legal Profession. The Leaders of our nation. Our Best and Brightest.
With every decade, another class of people keeps getting socio-economically decapitated and forced into the lower bowels of our larger, and more pervasive, proletariat. Yesterday's working class folks are lumpenproletarii today. Yesterday's Middle Class folks, are now working class or shackled to some low-paying service-sector job and today's upper middle class professionals are quickly following in their wake.
We shall see what comes of it. Whether they protest and give credence and legitimacy to the cries of the forgotten and disenfranchised, by lending their authority, credentials, education and experience to their plight? Or whether they will slip away into the night, silent, with nothing more than a whimper?
All I have to say is that the economic ideas mentioned above were hard for me to understand. I may not have totally grasped the full measure and total nuances inherent to the labour theory of value. But I know one thing is certain. There is a major economic crisis in this country. And it is spreading. And nobody of significance is aware of the REAL ways it is impacting us. The ways mentioned above, when one of the most traditionally stable and affluent professsions in the history of the nation, is now at risk of total economic implosion. That is something to be worried about.