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New Socialism

New Socialism

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Published by Mark Tutone
New Socialism is very relevant to our time.
New Socialism is very relevant to our time.

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Published by: Mark Tutone on Oct 20, 2008
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11/24/2012

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We have indicated above that workers may be divided into groups of differing
individual productivities, and recognised as such for planning purposes. The
planners would know, for instance, that a given project requiring 1000 person
hours of average labour would only require, say, 800 person hours of grade A
labour. Now the question arises whether the existence of different skills demands
recognition by the planners, and if so how this should be organised.
In the short to medium run, the differentiation of labour by skill is both
important and irreducible. The skills of a mining engineer, a surgeon and a
computer programmer are not interchangeable. It follows that over this time
horizon the planners cannot simply think in terms of the allocation of ‘labour’ as

Skilled labour as a ‘produced input’

35

such, but must recognise the constraints imposed by the availability of specific
skills. This implies that detailed records should be kept of the number of people
qualified in each speciality. But then what becomes of the labour conception of
value and the use of labour-time as a unit of account?
Well, in the long run workers can be retrained, and the ‘democratic’ as-
sumption of socialists is that, apart from certain extremely demanding tasks
and certain impaired individuals, almost everyone can do almost anything. In
the context of long run planning, what matters is not the present availability of
specific types of skilled labour, but rather the cost of production of those skills.
And just as the value of machines can be calculated in terms of the amount
of labour time required to make them, for the purposes of long term economic
calculation, so can human skills.
We can envision the establishment of a baseline level of general education:
workers educated to this level only will be regarded as ‘simple labour’, while the
labour of workers who have received additional special education is treated as
a ‘produced input’, much like other means of production. This notion of skilled
labour as a produced input may be illustrated by example.
Suppose that becoming a competent engineer requires four years of study
beyond the basic level of education. This four-year production process for skilled
engineering labour involves a variety of labour inputs. First there is the work of
the student—attending lectures, study in the library, lab work, etc. As stated
earlier, this is regarded as valid productive work and is rewarded accordingly. It
is counted as a ‘simple labour’ input. Second is the work of teaching, distributed
over the number of students being taught. This is a skilled labour input. Third,
there is the ‘overhead’ work connected with education (librarians, technicians,
administrators). This may be a mixture of skilled and simple labour.4
This illustrates the general point that the production of skilled labour will
typically require both simple and skilled labour as inputs. Measuring the current
simple labour input is in principle quite simple; the more difficult question is
how we treat the input of skilled labour. If skilled labour embodies a past labour
input it will count as some multiple of simple labour, but how is the multiplier
determined?

The very same question arises in relation to the evaluation of the skilled
(e.g. teaching) input into the production of our skilled engineering labour, as in
relation to the subsequent evaluation of the qualified engineer’s labour. In the
following discussion and the appendix to this chapter we deal with both aspects
at once, employing the simplifying assumption that all ‘skilled’ labour requires
the same quantity of labour input for its production.
Consider the analogy of inanimate means of production. The standard
method for quantifying the labour ‘passed on’ from such means of production
to the product is to ‘distribute’ the labour content of the means of production
over the total volume of output to which those means contribute. For example,
if a machine embodying 1,000 hours of labour gets used up in the course of

4

Note that the labour required for providing the subsistence of the student is not actually
a cost of production of skilled labour. This labour would have to be performed by somebody,
whether or not the studying takes place.

36

Chapter 2. Eliminating Inequalities

producing one million units of product X, then the machine may be said to
pass on 1,000/1,000,000 = 0.001 hours of labour to each unit of X. To take the
calculation one step further, suppose that our machine is operated at a produc-
tion rate of 100 units of X per hour. It follows that the machine ‘transmits’
100×0.001 = 0.1 hours of embodied labour per hour of operation.
Now return to our skilled engineer and apply the same principle. Suppose
that, once qualified, she works a 35 hour week for 45 weeks per year, i.e. 1575
hours per year. And let the ‘depreciation horizon’ for her engineering skills be
10 years. (That is, at the end of this time she will need, or become eligible for,
another period of full-time education to update her knowledge and skills or to
change specialisms if she wishes.) She will work 1575×10 hours in those 10
years, and to determine her rate of transmission of embodied labour during that
working time we divide the total labour content of her education by 15,750.
The appendix to this chapter shows how it is possible to work out the total
embodied labour content of skilled labour, using simple labour as unit of ac-
count. According to these calculations the ‘transmission rate’ might be of the
order of

0.50 for Depreciation over 10 years,
0.33 for Depreciation over 15 years,
0.24 for Depreciation over 20 years.

The figure of 0.33, for instance, tells us that our engineer, whose skills are
depreciated over a 15 year horizon, transmits 0.33 hours of embodied labour
per hour worked. Unlike the machine, which only transmits labour embodied
in the past, our engineer also works one hour per hour. The total direct plus
indirect labour contribution of our engineer would therefore be 1.33 hours per
hour, a multiple of the simple labour rate. In other words, if the planners are
contemplating the employment of a million hours of skilled engineering labour
in the context of a long-run plan, they should recognise that this is equivalent
to a commitment of 1.33 million hours of simple labour.
We do not mean to imply that just because a skilled worker is rated as
costing society a third more than a worker of average skill, then they should
be paid a third more. This extra third represents the additional cost to society
of using skilled labour. Society has already met the ‘extra third’ in paying for
the worker’s education, so there is no justification for paying the individual any
extra. Although it has no implications for the distribution of personal income,
the skilled labour multiplier is important in working out the true social cost of
projects. A task that requires skilled labour is more costly to society even if the
skilled workers are paid the same as unskilled ones.

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