Labor Time Accounting: A Postmortem – Robin Hahnel

In an article published by the Participatory Economy Project, professor Robin Hahnel offers a critique of labor time accounting, arguing that there are three different categories of real costs which rational economic decision making should take into account, only one of which is the amount of labor time required to make different goods and services.

Excerpt:

Of relevance is that some “political economists” who are critics of neoclassical economic theory argue for a return to a “classical” theory of value in the tradition of Ricardo and Marx, focusing on the amount of labor it takes to make things. And even more to the point, some who elaborate models of socialism today subscribe to the theory that the only real cost of making things is the amount of labor time required, and propose that decisions in a socialist economy be based on that criterion alone¹.

However, in truth there are three different categories of real costs which rational economic decision making should take into account, only one of which is the amount of labor time required to make different goods and services. Moreover, since an hour spent doing some kinds of work can be considerably more unpleasant than other kinds of work, not even labor costs can always be adequately accounted for simply in hours.