The following post originally appeared here at Austrian Economics and Literature.

The emancipation of the sign: remove this ‘archaic’ obligation to designate something and it finally becomes free, indifferent and totally indeterminate, in the structural or combinatory play which succeeds the previous rule of determinate equivalence. The same operation takes place at the level of labour power and the production process: the annihilation of any goal as regards the contents of production allows the latter to function as a code, and the monetary sign, for example, to escape into infinite speculation, beyond all reference to a real production, or event to a gold-standard. The floatation of money and signs, the floatation of ‘needs’ and ends of production, the floatation of labour itself—the commutability of every term is accompanied by speculation and a limitless inflation (and we really have total liberty—no duties, disaffection and general disenchantment; but this remains a magic, a sort of magical obligation which keeps the sign chained up to the real, capital has freed signs from this ‘naïvety’ in order to deliver them into pure circulation).

—Jean Baudrillard, from “Symbolic Exchange and Death”

Baudrillard’s hyperreality is fascinating. I’ve written about it here and here. I have reservations about Baudrillard, but I think his theories could be useful to libertarians and Austrian economists. What follows is merely speculation. I’m seeking feedback, not advancing an argument that I’m invested in.

What Baudrillard calls the “political economy of the sign,” economists call the “subjective theory of value.” Claiming that his term is inadequate because its signification is allusive and coded, Baudrillard seems to multiply the subjective theory of value until it (and what it evaluates: the good or service for which people exchange currency) becomes something else, something re-signified. In so doing, Baudrillard seems to mimic or participate in the very semiotic processes that he is describing.

The re-signified version of the subjective theory of value can no longer be called the subjective theory of value because the re-signified version is, to a degree, counterfeit; the same can be said of the materiality (the thing used to facilitate or complete an economic transaction) constituting the monetary unit described by the subjective theory of value. Strictly speaking, the re-signified version of this theory is itself a replacement copy of the theory, just as money and other units of exchange are merely signs standing in the place of “worth.”

The subjective theory of value holds that a thing does not possess inherent worth. Instead, worth arises because of the social value that attaches to a thing. Worth, or cost, is the price which one person is willing to pay and which another person is willing to sell. Standing in contradistinction to the labor theory of value, which Baudrillard seems to pooh-pooh (perhaps because of his disaffiliation with the Marxism of his youth), the subjective theory of value maintains that worth or cost depends upon the ability of a thing to satisfy the wants of consumers. A consumer is satisfied to the extent that a thing is useful to him. Utility here is measurable in psychological and not just “practical” terms; a person may want something because it makes him feel good. What seems to bother Baudrillard is the extent to which consumers exchange goods (themselves mediated by signs and representations) to become plugged into a symbolic network rather than to satisfy an immediate need. The satisfaction is what comes with the entrance into a symbolic order.

A thing, according to this conception of value, is not worth a lot simply because a lot of people mix their labor with it. Nor is a thing worth a lot because of some essential properties or qualities it contains. Rather, thing A is worth a lot because people think it is worth a lot: because people are willing to exchange something they own (thing B or C or D) in order to own thing A.

For Baudrillard, the subjective theory of value (a term he never uses) has vast implications for the sign in the postmodern world, just as the sign has vast implications for the subjective theory of value in the postmodern world. Because the worth or value of a thing is not tied to labor, it is, in a way, as Baudrillard suggests, subject to infinite speculation and free from all reference to production. Media of exchange (e.g., money) float outside the real—which is to say, outside of material things. They became simulacra for some temporary and contingent concept of value. Perhaps more importantly, the media of exchange are themselves distorted and fabricated by structures of symbols marking various exchanges. Fiat money brings about the complete arbitrariness of the sign, which is entirely divorced from use value. The ability of a green piece of paper (speaking in terms of American dollars) to become exchangeable for products depends upon social signification; the economy itself is dominated by signs and images, which are, after all, what producers and consumers exchange for products. Read the rest of this entry »