All Commentary
Friday, February 1, 1963

Stamps and the Labor Theory of Value

Mr. Stearns is a free-lance writer from Missouri.

To most of us a postage stamp is a means to an end. It is a bit of paper that tells the postal authori­ties we have paid to have mail de­livered.’ But to a philatelist a stamp is an end in itself, and a misprint is likely to be especially valuable. Therefore, when the gov­ernment moved recently to flood the market with deliberately mis­printed Dag Hammarskjöld com­memorative stamps in an effort to wipe out the value to collectors of a few unintentional misprints, philatelists were keenly interested.

This action of the Post Office Department is, however, of more than philatelic interest. The in­cident offers a remarkable lesson concerning the “labor theory of value”—a theory that is the heart of Marxian economics, and one that enjoys widespread acceptance in the United States today.

The reason the government has taken its action is that the origi­nal, unintentional misprints are, according to the statement issued by the Post Office Department, “over-valued.” It appears that there is only one reason for de­stroying this “inflated” value—the idea that when one individual profits, this somehow injures an­other who does not. This idea is an extreme but logical extension of the labor theory of value which, among other things, holds that what is one man’s gain is invari­ably another man’s loss.

But in this case, the illogic of the theory is especially noticeable. Who lost? Certainly not the gov­ernment. Each of the stamps sold for its face value of four cents. What about those of us who didn’t get a chance to buy them? We haven’t lost a cent. But the people who did buy them gained some­thing. Thus, the outcome was a net gain. A value now exists that did not exist before.

But whence came this extra value? Obviously, it didn’t come from anyone’s labor. It wasn’t any harder to produce the unusual stamps worth hundreds and per­haps thousands of dollars than it was to produce the usual ones worth four cents. There is even a chance that less labor was involved since someone, obviously, was asleep at the switch.

The fact that extra value was created is clear. Now, seeing this, if you believe in the labor theory of value, you can do one of two things. You can admit that the theory is false and begin to look around for another theory—one that fits the facts. Or, you can stick with Marx and deny that this new value exists—in spite of the obvious fact that if you have one of these stamps, a collector will pay you handsomely for it.

If you happen to be one who can accept the brand of “logic” in­volved in this second alternative, the next logical step is to declare to everyone that the stamps are over­valued—that is, they are not worth what people voluntarily are paying for them. If, in addition to whatever else you have now shown yourself to be, you are also an authoritarian, the final logical step is to attempt to destroy the extra value—that doesn’t exist anyway. Once you have done this you will be able to breathe easier and relax again in your private Marxian utopia.

It is important to recognize this incident for what it is—not just an isolated occurrence, of interest only to stamp collectors, but a clear demonstration of an alien philosophy, enervating to liberty, that corrupts our American dream.




Ideas on Liberty

Supply and Demand

Prices are determined by supply and demand, and demand is determined by how intensely people want a commodity and what they have to offer in exchange for it.

HENRY HAZLITT, Economics In One Lesson