{"id":85679,"date":"2025-09-13T07:14:57","date_gmt":"2025-09-13T06:14:57","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=85679"},"modified":"2025-09-13T07:14:57","modified_gmt":"2025-09-13T06:14:57","slug":"quantum-economics-part-7-the-photon-question-labour-as-the-quantum-of-value","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2025\/09\/13\/quantum-economics-part-7-the-photon-question-labour-as-the-quantum-of-value\/","title":{"rendered":"Quantum economics, part 7: The Photon Question \u2014 labour as the Quantum of Value"},"content":{"rendered":"

This post continues the story of quantum economics, which began here<\/a>. There is a summary of posts to date at the end of this post.<\/em><\/span><\/p>\n

Can you please note when reading this post and others in the series that I am not suggesting that quantum physics and economics are akin to each other. Instead, I am exploring how quantum thinking might help build new economic narratives, which is quite a different goal.<\/em><\/span><\/p>\n

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The Photon Question \u2014 Labour as the Quantum of Value<\/b><\/h2>\n

\u201cLabour was, it must be remembered, the first price, the original purchase-money that was paid for all things.\u201d \u2013 Adam Smith, The Wealth of Nations<\/i><\/p><\/blockquote>\n

Physics has its quantum: the photon. A discrete packet of light, indivisible, the building block of energy transfer.<\/p>\n

Does economics have its equivalent? Is there a basic \u201cquantum of value\u201d underpinning exchange? The classical economists thought so. They argued that labour was that quantum: the necessary element embedded in every good and service, the one input without which nothing else had value.<\/p>\n

Modern economics abandoned this idea, preferring the subjectivity of marginal utility. Value, it claimed, lies in the eye of the beholder, not in the sweat of the worker. Prices, not labour, became the measure.<\/p>\n

But in losing the quantum, economics lost its anchor. Without a photon of value, the system floats on abstractions, vulnerable to bubbles, manipulation, and delusion. To rebuild economics, we need to ask again: is labour the indivisible unit of value?<\/p>\n

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First: the classical view<\/b><\/h2>\n

Smith, Ricardo, and Marx all recognised labour as fundamental. Land and capital mattered, but labour was universal. Every good required human effort. Even raw materials had to be found, extracted, and processed.<\/p>\n

For Marx, labour was not just input but essence: surplus value arose because workers produced more than they were paid. Exploitation was measurable in units of labour time.<\/p>\n

The labour theory of value gave economics a quantum, a grounding in reality. Prices might fluctuate, but beneath them was a substance: hours of human effort.<\/p>\n

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Second: the neoclassical turn<\/b><\/h2>\n

In the late nineteenth century, economists turned away from labour. Marginalism reframed value as utility: the satisfaction derived from consumption.<\/p>\n

Labour became just another factor, its price set by supply and demand. No deeper anchor existed. Value was whatever the market said it was.<\/p>\n

This shift suited capital. It erased exploitation from theory. It justified inequality as preference. It detached economics from reality.<\/p>\n

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Third: labour as quantum today<\/b><\/h2>\n

Despite this, labour remains the universal substrate of value.<\/p>\n