May 09, 2011

Chase Bank vs. Karl Marx

Have you seen the new Bank of America commercials that show how you can deposit checks via ATM, and they'll print you out a receipt with the check image on it? Pssh. That's SO last year. This past weekend, I downloaded Chase's mobile banking app and deposited a check without leaving the house. I simply opened the app, used my phone's camera to take a photo of both the front and back sides of the check, and it was instantly deposited into my account.

My goal of never again having to leave my house is slowly becoming a reality.

But, as I am currently reading a biography of Karl Marx, I wondered what he would think of this technological innovation. Marx had a labor-based valuation theory regarding product, meaning that the value of the item is equal to the value of the labor that went into producing it. This would prevent greedy higher-ups from profiting at the expense of their labor force.

This method of valuation is at stark contrast to Adam Smith's, which contends that the valuation of product is equal to its utility. For instance, I could pay laborers to create a car that costs twice as much and works half as well as a Honda Civic. Marx's theory would place the value of this vehicle at twice that of a Civic. Smith's theory would place the value of this vehicle at 0.

Back to the bank. Chase's new app will surely have a damaging effect on the utility value of Chase's bank tellers. This is sad. But, if your job (reading a check and entering the values into a computer system, or even less, confirming what the user put down on the deposit slip), your intrinsic value as a worker is ridiculously small. Whether or not this innovation is a "good" thing, I won't even try arguing here. Even if it's terrible, you shouldn't be content having a job a free app can replace.