Friday, December 19, 2008

Labour theory of value

Mr. Ponzi

I have been voraciously reading about the wall street meltdown and have developed a bruise on the underside of my chin due to excessive jaw dropping and open mouth gasping.
Having said that, I came across this lovely bit today that highlights equitable banking alternatives.

I was particularly interested in the "labour theory of value".

Mutualism is an approach to economic life that means co-operating rather than competing, and it underpins an economy based in the heart of a community. It is exactly 150 years since Robert Owen, the foremost social and economic innovator of the 19th century, cashed in his labour notes and took up residence in the ethereal Harmony Hall, whose earthly equivalent he had spent a lifetime trying to create. When he is remembered at all, it is as the founder of the co-operative movement, but Owen’s first economic experiment was with money itself.

Along with many political economists of his time, Owen held to a labour theory of value, i.e. that the value of goods should be equivalent to the labour invested in their manufacture. Although a capitalist manager himself, the profiteering by middlemen enraged him. To address this inequity, in 1830 he set up an Equitable Labour Exchange, where the medium of exchange was ‘labour notes’. These were denominated in hours, and goods exchanged for the number of hours they took to make. The scheme was an instant success among producers, and perhaps a thousand artisans were involved in the Exchange.

I'm all for living wages, but i must be missing something. Aren't their other costs, ie inputs and distribution? It speaks a bit to Natalie's business model where the stitchers name the price of their work.

I have more research to do but couldn't help post prematurely. I was so excited to read something so antithetical to the daily barrage of stories about greed in the NY Times.

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