The Economic and Labour Relations Review

The emergence of an understanding of labour as the basis of value is traced from ancient Greek authors to classical political economy and Karl Marx, and the subsequent eclipse of the theory in neoclassical economics is then charted. While the ancient Greeks did not have a concept of labour as a measure of value, in Scholastic authors the notion was fixed that labour and cost of production determine value. Labour assumed a central role in Adam Smith, but it was with David Ricardo that a fully blown labour theory of value was achieved. Marx gave the concept its philosophical dimension, tying it to a critique of classical political economy. The labour theory of value came under attack in neoclassical formulations which in the end effected the analytical disappearance of labour in several ways. Labour became just another factor of production, with marginal productivity regulating its price. Then factors of production and final goods became analytically equivalent as sources of subjective utility, especially in the context of general equilibrium theory. In disutility models of labour supply, labour was substituted by its absence, ‘leisure’. Finally, attempts were made to explain the employment relationship as an application of agency theory, moving away from the pure commodity model of labour. Nevertheless, all these theories failed to account for what became the Achilles' heel of neoclassicism — namely the indeterminacy of the labour contract.

In his seminal and canonical text for the new science of political economy, the Wealth of Nations, Adam Smith seems to proceed as if there are markets for labour, akin to markets for ‘commodities' in the ordinary sense of that term. It might therefore seem as if for Smith, the production, distribution and exchange (or pricing) of commodities finds a more or less strict analogy in the production, distribution and exchange (or pricing) of labour or labour services, in ‘commercial society’ (his term), or in a liberal capitalist social economy. But how close, really, is the analogy between commodities in the ordinary sense and labour, in Smith's understanding?

The current financial crisis has meant a sudden drying-up of the widely-assumed basis of profitability and capital accumulation — reward for entrepreneurship or risk. In this context, it is timely to revisit the Marxian concept that profits derive from the dual role of labour, as both a commodity and a non-commodity. Surplus is created by the difference between the commodity dimension of labour, the value of labour power, and its non-commodity dimension — the value added by labour, over and above the value of inputs, or the cost of reproducing the workforce. Since the 1980s and 1990s, however, labour has become a commodity in a new sense. Risks to working class self-reproduction in the form of wage decline and withdrawal of state welfare, have pushed workers into becoming entrepreneurs of their own lives, calculating the risks of debt servicing and involuntarily buying services from privatised and financialised utilities and health care providers. In this sense, newly commodified labour is required to treat itself as a commercial entity, and it is thereby a player in the market for risk. The reproduction of labour power has itself become a source of surplus value, in the form of interest payments. But, as indicated by the US sub-prime housing market and its fall-out, capital now shares in the risk, through a fall in the value of labour power (lower consumption), and through incalculable financial instability.

Economists have rightly observed that labour commodification is one of the defining characteristics of the market capitalist mode. In this contribution, however, we contend that while a traditional macroeconomic perspective goes some way towards explaining the nature of the employment relationship, it fails to acknowledge that commodification is a necessary but not sufficient condition for labour utilisation. Viewed through the lens of organisation theory, the main employer agenda regarding labour utilisation is that of ‘human resource’ objectification, rather than market commodification. We seek to demonstrate this by examining how, under contemporary ‘human resource management’ (HRM), labour management theory and practice have developed into a sophisticated project designed to psychologise the employee subject into a resource object. In line with objectification, it is a project through which management seek to render human capabilities, attitudes and emotions — the basis of the worker's status as a social and organisational subject — classifiable, measurable and, hence, more manipulable.

From its foundation in 1919, the International Labour Organisation's (ILO) guiding principle has been that labour is not a commodity. Following an examination of the origins and impact of this principle on ILO and United Nations (UN) conventions relating to migrant workers, the paper examines how Australia has responded to such conventions. In this regard, the paper highlights the counterveiling influence of the neoclassical economic perspective on the way migrant workers in Australia have been treated and represented from the post-war period until recent times as either ‘factory fodder’ and/or ‘business assets'. Both representations, we argue, treat migrants as commodities. To challenge this approach the paper identifies how migrant workers have distinguished themselves from commodities through resistance to poor working conditions and also management strategies that treat them as if they were commodities.

There has been a qualitative shift in the character of international labour migration with increased temporary labour migration. With circumscribed employment rights, the increased significance of temporary migrant workers underscores arguments that globalisation has engendered a more profound commodification of labour. The instrumentalist approach, especially of international financial institutions in promoting temporary labour migration as a panacea for development, reinforces this impression. Encapsulated in migration-development discourse, labour migration, like other commodities, is presented as a means of generating export revenue for the South. Karl Polanyi's critique of this market-defined construct of labour as a commodity, when labour can only ever be a fictitious commodity, provides a basis for contesting the representation of labour in the migration-development discourse. However, recourse to a Marxist method is held to be essential if we are to move beyond an appreciation of the process in order to interrogate the rationale that is driving the transformation of labour.

Labour migration from the Pacific to Australasia has experienced two distinct phases with acute structural similarities. Late nineteenth century migration brought Melanesian migrants to Queensland cane plantations, notably from the New Hebrides (Vanuatu). A century later, early twenty-first century agricultural shortages took migrants from several island states to New Zealand and Australia. Migrants moved from semi-subsistence agricultural systems — where income generation was trivial — in search of incomes, goods and experience(s). Forced migration gave way to conscious choice. Similarities in the organisation of recruitment, acquisition of income and skills and improved material well-being attend both phases. Women have been more likely to participate in the second phase. Overall outcomes have been unequal with the principal gains accrued in destinations rather than by the migrants or their home islands.

On-going class action against America Online's use of ‘free labour’ has divided opinion about the management of ‘digital’ labour in the ‘new’ economy. Web-based systems of collaboration between and within firms and their customers, as well as customer engagement in product innovation, have underscored claims about the evaporation of traditional labour markets and labour processes as well as about (weakening) divisions between production and consumption. This has led to (exaggerated) debates about the contribution of ‘free’ or ‘immaterial’ labour to contemporary economies. This paper argues that while significant restructuring has changed traditional organisational forms, capital markets remain centralised and digital labour remains as regulated as other labour. As such, while labour cannot be fully commodified, digital labour is neither free or immaterial, because it is not the content of labour itself, but rather its relationship with capital that gives it ‘weight’ and value.