The axiom of self-ownership is fundamental to anarcho-capitalistic and voluntaryist philosophies. Hans-Hermann Hoppe argues that the act of arguing itself requires the arguer to have accepted the axiom of self-ownership. I suggest that if someone has reasons for arguing, their reasons will be reflected in the assumptions they make about “reality.” These reasons compel them to argue, the very act of which Hoppe has shown to contain an assumption of self-ownership. We would therefore expect the assumptions arguers make about reality to contain at least one concerning self-ownership. In this essay I debunk the Marxist notion of the exploitation of the laborer even if we, for the sake of argument, concede the labor theory of value, and then I show how this relates back to an assumption about the right to self-ownership.

One of the fundamental fallacies of Marxism is the use of the labor theory of value. Because Marxists use this doctrine instead of the subjective theory of value, they fail to see how in the labor market both the capitalist and the worker benefit from trade. Because the Marxists insisted value comes from labor they argued that the profit derived from entrepreneurial activity comes solely from the laborer. It is unjustified theft for the capitalist to make anything from the operation. Even when we, for the sake of argument, assume the labor theory of value is correct, the Marxian position is wrong.

I should reiterate that I am not defending the labor theory of value against the subjective theory of value. The work of Menger and Bohm-Bawerk so totally exploded the labor theory of value that not even laymen casually acquainted with praxeology will espouse its merits. I am attempting to show that even if we admit to the Marxists their fallacious theory of value they still must admit that the capitalist is justified in taking part of the profits from business activity.

In chapter seven of Capital, The Labor-Process and the Process of Producing Surplus-Value Marx is inconsistent in his application of the labor theory of value. He states that

“The labour required for the production of the cotton, the raw material of the yarn, is part of the labour necessary to produce the yarn, and is therefore contained in the yarn. The same applies to the labour embodied in the spindle, without whose wear and tear the cotton could not be spun.”

While what is asserted for the cotton is true within previously expressed doctrines, Marx’s assertions concerning the spindle, the means of production, is not. The machine confronts the laborer as a congealment of past labor-power which today is able to perform labor. Marx asserts that this is “Dead labor” as opposed to the laborer’s “Living labor.” But so what? Marx admits that the skill involved in the production of the desired good is not contained in the labor of the worker, but rather in the labor of the machine. To assert that the value of the labor performed by the machine is equal to the value of the replacement cost of wear and tear in the machine is as fallacious as asserting that the value of the labor exerted by the worker is equal to the cost involved in making sure the laborer’s life is sustained at a level at which the worker can perform his assigned task. Marx rejects this for the laborer and therefore must reject it for the machine as well.

We are then confronted with two sources of labor in any process: The labor of the laborer and the labor of the capital. The labor of capital is, unless the capitalist stole the capital, the congealed labor of the capitalist. Because the labor of the capitalist continues to do labor it must be that it is the capitalist who is performing this labor through the medium of his previously expended labor power. This implies that while the laborer is working with the capitalist’s means of production, under the labor theory of value, both the capitalist and the laborer are adding their labor power to the commodities being manipulated.

Neither one would be able to perform the specific task without the other. The machine would not be able to function without the aid of the worker, nor would the worker be able to perform the specific task, for instance, pounding tons of metal into a perfectly flat sheet in the blink of an eye, without the help of the machine. How can we determine the value of each one’s labor compared with the other’s? This is actually quite simple as the worker accepts a wage. This wage must (under the assumption of equal values in trades which the labor theory of value uses) be equal to the value of the laborer’s labor. The value of the labor performed by the machine is therefore the price of the final good minus the value of the laborer’s labor minus the value of the labor embodied in the non-capital commodities used in the production of the final good. Because the capitalist ultimately performed the labor performed by the machine, it is the capitalist who should rightfully get this surplus.

All this comes from an assumption about self-ownership. The value in commodities comes from labor, and therefore determining whose labor also determines who added this value. Yet without the assumption of self-ownership this question would not and perhaps could not arise. If the laborer were owned by the capitalist then the labor performed by laborer would, rightly considered, have come from the capitalist in the same way that the labor performed by the machine came from the capitalist. When the communists hypocritically ignored the capitalist’s right to self-ownership by denying the contribution done by his congealed labor power, which, within the labor theory of value is an extension of his self, we can see the results of ignoring self-ownership. Rather than seeing the truth of the matter: that the capitalist has succeeded in transforming the various means of production into the finished product. The communist only sees the laborer. Any other factors were contributed by “the state” or “society.”

Hoppe showed that the act of arguing itself implies self-ownership. The reasons that compel a person to argue should therefore contain certain assumptions about self-ownership. The Marxists assume that the labor theory of value is correct. Even if we concede this for the sake of argument, it can still be shown that the capitalist does not exploit the worker, but rather, pays a fair wage and that the income the capitalist receives is also just. The reason for this is that the labor theory of value contains an assumption about self-ownership, the fundamental assumption in anarcho-capitalism and voluntaryism.