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The Labour Theory of Value and the Entropy Theory of Value

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This is going to be one of these ongoing essays, so please bare with me a chairde.


Many people think that Marx discovered the Labour Theory of Value, i.e. the idea that the value of any item is proportional to the human effort put into its production. However, it was Adam Smith and David Ricardo who discovered this fact, in the late 18th century. Today, bourgeois economists try to deny this fact, and claim that value is created not by human effort, but by scarcity. These economists never stop to think that scarcity is a product of human effort.


We have recently learned that there are whole planets in space made of diamond. Do these planets have any economic value? Of course not. Why? Because human labour cannot be applied to them. (And we can be sure there is no intelligent life on a planet made of diamond - it would be far too cold.)


So, what does entropy mean? Entropy is the process by which organised systems spontaneously become disorganised. Brownian motion is the example we all learned in science class. If you open a bottle of perfume in a room, over time, the perfume molecules will spread out to all corners of the room. If you wait long enough, there will be no more perfume molecules in the bottle than there are in any other part of the room. When the perfume is organised in the bottle, it is said to have low entropy. When it is spread out evenly in the room it is said to have high entropy.


So, anything that is organised, and thus of use to us humans will be a thing of low entropy. A tree is an thing of low entropy. It has used a lot of energy to pick up random molecules and organise them into the organism of the tree. Wood is made mostly of carbon, hydrogen and oxygen. We can breath oxygen, but otherwise it is of little value to us (mind you, breathing is quite important.) But, about 95% of the universe is made of hydrogen (excluding dark matter.) It is spread everywhere, and is of no great use to us on its own. But, when a tree has done it work, and organised these three elements into a tree, i.e. when it has turned high entropy into low entropy, it is of great use to us. In general, we can say that reducing entropy takes the application of energy.


We can say the same about systems of information. Leonard Susskind talks about the minus first law of thermodynamics. It says that information cannot be created or destroyed in the universe. But, information, just as random bits, is of no use to us. We need to expend effort to organise information into forms that are intelligible to us, i.e. we have to lower the entropy of the information available to us - we have to organise it.


The entropy theory of value dates from the early 1970s, when the study of entropy in closed systems led to the founding of information theory as a scientific discipline in its own right. It was noticed that many parameters applied to information, arranged as bits, i.e. as ones and zeros (there or not there, on or off) could be applied to the question of economic value.


Jing Chen, writing in 2002, says:


"Why are both information and economic value the reduction of entropy? From the entropy law, the most universal law in nature, the increase in the entropy of a system is spontaneous. The reduction of entropy in a system, however, takes effort. Human effort is the base for both information and value."


Needless to say, this is another way to say what Marx said, i.e. that labour, i.e. human effort, is the basis of all value. Gold, while a low entropy material, has no value unless human effort is applied to it - mining, smelting, creation of golden objects, creation of a market for gold, in short, the creation of a culture that values gold.

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As humans, we tend to value low entropy highly, and regard high entropy with regret. I think that is the point of Shelley's great poem, Ozymandias:


I met a traveller from an antique land

Who said: "Two vast and trunkless legs of stone

Stand in the desert. Near them on the sand,

Half sunk, a shattered visage lies, whose frown

And wrinkled lip and sneer of cold command

Tell that its sculptor well those passions read

Which yet survive, stamped on these lifeless things,

The hand that mocked them and the heart that fed.

And on the pedestal these words appear:

`My name is Ozymandias, King of Kings:

Look on my works, ye mighty, and despair!'

Nothing beside remains. Round the decay

Of that colossal wreck, boundless and bare,

The lone and level sands stretch far away".


It is sad to us that all our work is doomed to dissolution and forgetfulness. But, it also difficult to read this poem without feeling that the poet believes that the possibility of freedom lies precisely in entropy. Without entropy, nothing would ever change.


So, we have contradictory feelings towards entropy. On the one hand, we look at the noble achievements of the USSR or the Great Socialist People's Libyan Arab Jamahiriya, and we are heartbroken at the chaos, death and destruction that has followed their ending. But, on the other hand, we are glad that evil empires, such as the Anglo American empire, must, one day become dust.

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Highly organised processes are valuable. Low entropy is the store of value. And, this is not just true of commodities. Lenin himself said the same thing in regard to political organisations. In his "What is to be done," he posited the idea that a political organisation that had a lower entropy than its enemies, i.e. a party that was organised with military discipine, would be unstoppable.


I think there is a great deal of merit in Lenin's idea. In Ireland we blame every failure on the informer. But, informers are just one example of entropy. It is easy for informers to emerge in high entropy environments, i.e. in areas of low discipline. Indeed, poor discipline invites informers.

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This brings us to the question of spontaneity. Entropy is a spontaneous process. But, as we have seen, it aims at disorganisation. For some reason, Western Leftists now have a fetish for spontaneity. They imagine that the downtrodden will spontaneously rise up and take power. They seem to regard any kind of intelligent organisation, i.e. the production of low entropy, as some kind of Fascism, designed to stand between the people and their spontaneity.


Needless to say, this idea goes against the laws of physics and reason, but that doesnt bother our trendy Lefties. The so called "Arab Spring" was their moment of justification. But, as we have seen, this moment has turned out to be a nightmare. Imperialism has been immeasurably strengthened, and resistance has been made immeasurably more difficult.


Its true that some level of spontaneity is crucial to all success and all hope of freedom, but only when it appears within an intelligently ordered structure, which has been built up over many years, through the application of great dedication and energy.


Lenin's insights in 1917 showed a very high degree of spontaneity, as did the action of the workers - but they occurred within the context of highly disciplined work, which had been going on for decades - particularly since 1905.


The reduction of entropy is the outcome of effort. This is as true in the human sphere as in nature. It is in that sense that Smith, Ricardo and Marx claim that the value of any commodity is proportional to the labour expended on it. In effect, its value is based on its level of entropy. Low entropy, high value. High entropy, low value.


And we should not imagine that this labour is limited to the production of a particular commodity itself. All goods produced are the result of centuries of social labour. That is why intellectual property rights, for example, have no foundation in logic. They are enforced, against reason, by state terror.


This state terror is also a reduction of entropy, which leads to certain individuals accumulating fantastic private wealth. However, as we will see, the production of low entropy always produces high entropy in other areas. Not every low entropy is good for humanity, as a whole.

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