[OPE-L:2433] Re: Re: Re: Re: Re: Re: Re: the employment contract and capitalism

From: riccardo bellofiore (bellofio@cisi.unito.it)
Date: Mon Feb 28 2000 - 03:16:30 EST

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At 21:48 +0100 27-02-2000, Steve Keen wrote:
>Hi Riccardo,
>I agree that it was not truly 'populist', but I would argue that it was
>more populist than the Contribution in that Marx did not try to use a
>purely dialectical mode of presentation.
>Though you refer to "first chapter" and "second edition" Riccardo--did you
>mean "first edition"? If so then I'd like to hear more, since I haven't
>done any variorum research on Marx.

That's my point. I would guess that the first chapter, FIRST edition (1867)
is the more dialectical presentation by Marx. It was so dialcetical that
Marx decided to append a short appendix on the Form of Value. Both are
translated in English. The appendixi in Capital & Class, the first chapter,
first edition in an (unreliable) translation in English by some group in
New York. I don't have here (in Bergamo, I'm not at home) the references,
but I'm sure that some other on the list (Chris?) may give you the details.


>At 09:21 AM 2/27/00 +0100, you wrote:
>>Capital, first edition, was not truly 'populist', certainly not more
>>'populist' than the Contribution. Look at the first chapter, which was very
>>different from the second edition, and much more 'dialectic'.
>>At 23:42 +0100 26-02-2000, Steve Keen wrote:
>>>Thanks Nicky,
>>>Yes, it's a fair comment that Marx's exposition of the commodity is Capital
>>>is less clear, and less obvu\iously central to his analysis, than in other
>>>works not written for publication.
>>>The possible cause of this is that Marx was disappointed by the reception
>>>accorded to "Contribution"--which he refers to as the "Preface to Capital"
>>>in "Wagner". He thought it would shake the foundations, but it was regarded
>>>as obscure by friend and foe alike.
>>>So he tried to improve the reception of Capital by making it more
>>>"populist"--and in that, he undoubtedly succeeded. We wouldn't have OPE if
>>>he hadn't. But he obscured his fundamental dialectical logic in the
>>>process, and it's much clearer in Wagner, the Grundrisse, etc., than in
>>>Capital I.
>>>One of the best such statements is almost the final word in the Grundrisse,
>>>which Marx marked "to be brought forward":
>>>"The first category in which bourgeois wealth presents itself is that of
>>>the *commodity*. The commodity itself appears as unity of two aspects. It
>>>is *use value*, i.e. object of the satisfaction of any system whatever of
>>>human needs. This is its material side, which the most disparate epochs of
>>>production may have in common, and whose examination therefore lies beyond
>>>political economy. Use value falls within the realm of political economy as
>>>soon as it becomes modified by the modern relations of production, or as
>>>it, in turn, intervenes to modify them... Now how does use value become
>>>transformed into commodity? Vehicle of *exchange value*. Although directly
>>>united in the commodity, use value and exchange value just as directly
>>>split apart. Not only does the exchange value not appear as determined by
>>>the use value, but rather furthermore, the commodity only becomes a
>>>commodity, only realises itself as exchange value, in so far as its owner
>>>does not relate to it as use value." (Grundrisse p. 881)
>>>Unfortunately, nothing so clear was written in either the Contribution or
>>>Capital I.
>>>At 03:18 AM 2/26/00 +0800, you wrote:
>>>>Thanx Steve K, for your terrific exposition on labour power as a commodity
>>>>(OPE-L; 2403). It is interesting that you make use of Marx's Notes on
>>>>Adolph Wagner, where Marx makes (to my knowledge) his strongest case for a
>>>>concept of 'social use value'.
>>>>The argument goes like this: Commodites are products produced for the use
>>>>of others (they are *social use values*). As a concept pertaining to the
>>>>useful properties of *commodities* the concept of use-value must acquire in
>>>>addition to its natural properties, a particular social form. Marx,
>>>>stressed the point:
>>>>"A thing can be useful and be the product of human labour, without being a
>>>>commodity. Whoever satisfies his own need through his product, does create
>>>>use-value, but not a commodity. In order to produce a commodity, he must
>>>>not only produce *use-value, but use-value for others, social use-value*…So
>>>>use-value itself - as the use-value of the 'commodity' - possesses an
>>>>historically specific character' (Marx, 1979-80, p.199; **Marx's italics).
>>>>I think that the argument for an historical 'social' concept of use-value,
>>>>is important in the context of Marx's dispute with Ricardo on the price of
>>>>labour. According to Marx, Ricardo cannot explain the divergence between
>>>>the quantity and value of the labour embodied in commodities: 'Ricardo has
>>>>in fact no answer… He determines value here, in one of the basic
>>>>propositions of the whole system, by demand and supply - as Say notes with
>>>>malicious pleasure' (Marx, TSV 2, p.400).
>>>>Ricardo's failure to explain how surplus value can arise - given the
>>>>proposition of equal exchange - Marx puts down to a failure to distinguish
>>>>between two different *forms* taken by useful labour in capitalism. On the
>>>>one hand, useful labour is a quantity of expended human energy, embodied in
>>>>commodities and consumed ex post following exchange: it is *materialised
>>>>labour*. On the other hand, labour-power exists in commodity-form as
>>>>*living labour*, consumed ex ante in production. Opposition between the
>>>>bodily expression of useful labour and its commodification in the form of
>>>>labour-power explains why the 'law' of equal exchange does not apply:
>>>>'surplus value itself is derived from a specific use-value of labour-power
>>>>which belongs to it exclusively' (Marx, 1879-80, p.200).
>>>>The concept of 'social use-value' looks to be a crucial element of a theory
>>>>of capitalism as a system of commodity production based on wage labour. As
>>>>Marx, himself, commented in his Notes on Adolph Wagner: 'only an
>>>>obscurantist' could fail to recognise that the commodity is an
>>>>'historically specific' form of use-value, 'the simplest social form in
>>>>which the labour product is presented in contemporary society' (Notes on W,
>>>>1879-80, p.198). As a commodity, labour-power is itself a 'social
>>>>use-value' - a very important one since it creates value.
>>>>Unfortunately, the social character of the commodity-form of use-value is
>>>>less clear in *Capital*. Having described use-value as a natural quality
>>>>of 'usefulness' constituting the 'content of wealth, whatever its social
>>>>form may be', Marx turns immediately to the 'form of society' in which
>>>>these natural use-values (products) assume a social relation as
>>>>commodities: as exchange values (C1, 1976, p.126). Perhaps this lack of
>>>>clarity explains why the idea of labour-power as a special commodity (as a
>>>>social use-value) isn't well understood.
>>>>At 07:53 24/02/00 +1100, you wrote:
>>>>>marx had much the sort of hypothetical conversation you develop with
>>>>>Ricardo--in which case Marx played the role of Samuelson. He didn't need
>>>>>any help from OPE, as it happens! Instead, OPE needs to read him a bit
>>>>>The position you ascribe to Marx, he actually ascribes to Ricardo (of the
>>>>>single "c"!), and in one of my favourite lines, notes that "Ricardo has in
>>>>>fact no answer, other than ... the law of supply and demand ... He
>>>>>determines *value* here, in one of the basic propositions of the whole
>>>>>system, by *demand and supply*---as Say notes with malicious pleasure."
>>>>>Marx's "conversation" with Ricardo, from Theories of Surplus Value Vol.
>>>>>is reproduced between the dashes:
>>>>>15.2.1 Quantity of labour and value of labour. [As presented by Ricardo
>>>>>the problem of the exchange of labour for capital cannot be solved]
>>>>>"It is clear that the proportional quantity of labour contained in two
>>>>>commodities A and B, is absolutely unaffected by whether the workers who
>>>>>produce A and B receive much or little of the product of their labour. The
>>>>>value of A and B is determined by the *quantity of labour* which their
>>>>>production costs, and not by the *costs of labour* to the owners of A and
>>>>>B. Quantity of labour and value of labour are two different
>things."(TSV 2:
>>>>>p. 395)
>>>>>"Now wage-labour, however, is a *commodity*. It is even the basis on which
>>>>>the production of *products* as
>>>>>*commodities* takes place. The *law of values* is not applicable to it.
>>>>>Capitalist production therefore is not governed at all by this law... The
>>>>>second ... [problem] ... lies in the fact that the *utilisation* of a
>>>>>commodity (as capital) is proportional not to the amount of labour it
>>>>>contains, but to the extent to which it commands the *labour of others*,
>>>>>gives power over *more* labour than it itself contains. This in fact is a
>>>>>second latent reason for asserting that since the beginning of capitalist
>>>>>production, the value of commodities is determined not by the labour they
>>>>>contain but by the living labour which they command, in other words, by
>>>>>*value of labour*."(TSV 2: p. 397)
>>>>>"But how does the commodity labour differ from other commodities? One is
>>>>>*living labour* and the other *materialised* labour. They are, therefore,
>>>>>only two different forms of labour. Since the difference is only a matter
>>>>>of form, why should a law apply to one and not to the other? Ricardo does
>>>>>not answer---he does not even raise this question."(TSV 2: pp. 397-98)
>>>>>"The question is just why *labour* and the *commodities against which
>it is
>>>>>exchanged*, do not exchange according to the law of value, i.e. according
>>>>>to the relative quantities of labour. Posed in this way, *presupposing the
>>>>>law of value*, the question is intrinsically insoluble, because
>*labour* as
>>>>>such is counterposed to *commodity*..."(TSV 2: p. 398)
>>>>>15.2.2 @subsection = Value of labour power. Value of labour. [Ricardo's
>>>>>confusion of labour with labour-power. Concept of the "natural price of
>>>>>Summarising Ricardo, Marx says that in Ricardo's system "The *value of
>>>>>labour* is therefore determined by the *means of subsistence* which, in a
>>>>>given society, are traditionally *necessary* for the maintenance and
>>>>>reproduction of the labourers.
>>>>>But why? By what law is the *value of labour* determined in this way?
>>>>>Ricardo has in fact no answer, other than ... the law of supply and demand
>>>>>... He determines *value* here, in one of the basic propositions of the
>>>>>whole system, by *demand and supply*---as Say notes with malicious
>>>>>pleasure."(TSV 2: p. 400)
>>>>>"As wages are equal to the necessary means of subsistence,... If the value
>>>>>of the means of subsistence changes, then the value of the real wage
>>>>>changes... And here we have the *hidden reason* for Adam Smith's
>>>>>that as soon as capital, and consequently wage labour, intervenes, the
>>>>>value of the product is not regulated by the quantity of labour bestowed
>>>>>upon it, but by the quantity of labour it can command. The value of corn
>>>>>determined by labour-time, changes; but, so long as the natural price of
>>>>>labour is paid, the quantity of
>>>>>labour that the quarter of corn can command remains the same. "(TSV 2: p.
>>>>>15.2.3 @subsection = Surplus-value. [An analysis of the source of surplus
>>>>>value is lacking in Ricardo's work. His concept of the working day as a
>>>>>fixed magnitude.]
>>>>>"Apart from the confusion between labour and labour-power, Ricardo defines
>>>>>the average wages or the value of labour correctly. For he says that it is
>>>>>determined ... by the *labour-time which it costs to produce it*; that is,
>>>>>by the *quantity of labour materialised* in the means of subsistence of
>>>>>labourer."(TSV 2: p. 404)
>>>>>However Marx argues that he failed to show that only part of the worker's
>>>>>working day is used to reproduce this value, while another part becomes
>>>>>"Ricardo starts out from the actual fact of capitalist production. The
>>>>>value of labour is smaller than the value of the product which it
>>>>>creates.... The excess of the value of the product *over* the value of the
>>>>>wages is the surplus-value.... For him, it is a fact, that the value of
>>>>>product is greater than the value of the wages. How this fact arises,
>>>>>remains unclear. The total working-day *is greater* than that part of the
>>>>>working day which is required for the production of wages. Why? That does
>>>>>not emerge."(TSV 2: pp. 405-06)
>>>>>Typically, Marx does not provide his own answer clearly at this point
>>>>>Marx really lacked was a good editor!). Instead, you can find a reasonable
>>>>>didactic statement of it in his critique of Wagner (between the dashes
>>>>>"Secondly, only an obscurantist, who has not understood a word of
>>>>>*Capital*, can conclude: Because Marx, in a note to the first edition of
>>>>>*Capital*, overthrows all the German professorial twaddle on
>`use-value' in
>>>>>general, and refers readers who want to know something about actual
>>>>>use-value to `commercial guides',---therefore, *use-value* does not play
>>>>>any role in his work...."(Wagner: p. 198-99.)
>>>>>"Whoever satisfies his own need through his product, does create a use
>>>>>value, but not a commodity. In order to produce a commodity, *he must not
>>>>>only produce a use value,* but *use-value for others, social use
>value*. So
>>>>>use value itself---as the use value of the `commodity'---possesses an
>>>>>historically specific character."(Wagner: p. 199.)
>>>>>"On the other hand, the obscurantist has overlooked that my analysis of
>>>>>commodity does not stop at the dual mode in which the commodity is
>>>>>presented, [but] presses forward [so] that in the dual nature of the
>>>>>commodity there is presented the twofold *character* of *labour*, whose
>>>>>product it is: *useful* labour, i.e., the concrete modes of labour, which
>>>>>create use values, and abstract *labour, labour as the
>>>>>expenditure of labour-power*,... that *surplus value* itself is derived
>>>>>from a `specific' *use-value of
>>>>>labour-power* which belongs to it exclusively etc etc., that hence with me
>>>>>use value plays an important role completely different than [it did]] in
>>>>>previous [political] economy, but that, *nota bene*, it only comes into
>>>>>picture where such consideration [of value, use value, etc.] springs from
>>>>>the analysis of given economic forms, not from helter-skelter quibbling
>>>>>over the concepts or words `use-value' and `value'."(Wagner: p. 200.)
>>>>>Marx's "way out", in other words, is not that labor is not a commodity,
>>>>>an analysis of the commodity itself which differs from any preceding
>>>>>commodity, and in which the concept of use-value is crucial. The best
>>>>>statement of that is in Capital I:
>>>>>The past labour that is embodied in the labour-power, and the living
>>>>>that it can call into action; the daily cost of maintaining it, and its
>>>>>daily expenditure in work, are two totally different things. The former
>>>>>determines the exchange value of the labour-power, the latter is its use
>>>>>value. The fact that half a [working] day's labour is necessary to keep
>>>>>labourer alive during 24 hours, does not in any way prevent him from
>>>>>working a whole day. Therefore, the value of labour-power, and the value
>>>>>which that labour-power creates in the labour process, are two entirely
>>>>>different magnitudes; and this difference of the two values was what the
>>>>>capitalist had in view, when he was purchasing the labour-power... What
>>>>>really influenced him was the specific use-value which this commodity
>>>>>possesses of being a source not only of value, but of more value than it
>>>>>has itself. This is the special service that the capitalist expects from
>>>>>labour-power, and in this transaction he acts in accordance with the
>>>>>'eternal laws' of the exchange of commodities. The seller of labour-power,
>>>>>like the seller of any other commodity, realises its exchange-value, and
>>>>>parts with its use-value. (Capital I: p. 188)
>>>>>Finally, Marx's reason is somewhat clearer: his analysis of why
>>>>>surplus-value arises from labor/labor-power is derived from a
>>>>>analysis of the commodity, in which the concepts of use-value and
>>>>>exchange-value are essential. The basic notion is that a consumer of *any*
>>>>>commodity in capitalism pays a commodity's exchange-value in order to
>>>>>commandeer its use-value. As to why this distinction exists, we have to
>>>>>turn to earlier in Vol I:
>>>>>"The exchange of commodities, therefore, first begins on the boundaries of
>>>>>such communities, at their points of contact with other similar
>>>>>communities, or with members of the latter. So soon, however, as products
>>>>>once become commodities in the external relations of a community, they
>>>>>also, by reaction, become so in its internal intercourse. The proportions
>>>>>in which they are exchangeable are at first quite a matter of chance. What
>>>>>makes them exchangeable is the mutual desire of their owners to alienate
>>>>>them. Meantime the need for foreign objects of utility gradually
>>>>>establishes itself. The constant repetition of exchange makes it a normal
>>>>>social act. In the course of time, therefore, some portion at least of the
>>>>>products of labour must be produced with a special view to exchange. From
>>>>>that moment the distinction becomes firmly established between the utility
>>>>>of an object for the purposes of consumption, and its utility for the
>>>>>purposes of exchange. Its use-value becomes distinguished from its
>>>>>exchange-value. On the other hand, the quantitative proportion in which
>>>>>articles are exchangeable, becomes dependent on their production itself."
>>>>>(Capital I: p. 91)
>>>>>Marx's analysis of the commodity therefore is his "way out", with his
>>>>>argument being that the labor exchange is like that of any other
>>>>>but that this commodity has the peculiar attribute that its use-value to
>>>>>its capitalist consumer is not qualitative but quantitative. Since the
>>>>>general rules of commodity exchange, according to marx, mean that
>>>>>and exchange-value are incommensurable, this translates to a quantitative
>>>>>difference between the two in the case of this exchange, and this is the
>>>>>source of surplus value.
>>>>>However, I argue that this "way out" generates another dilemma for Marx
>>>>>which he can't solve: how to prove that labor/labor-power is the only
>>>>>commodity to which this applies.
>>>>>At 01:29 PM 2/23/00 -0500, you wrote:
>>>>>>---------- Forwarded message ----------
>>>>>>Date: Wed, 23 Feb 2000 19:17:07 +0100
>>>>>>From: Ernesto Screpanti <screpanti@unisi.it>
>>>>>>Dear comrades,
>>>>>>It seems to me that the discussion on the employment contract is going in
>>>>>>several directions that, although very interesting, are inducing us to
>>>>>>focus on the real theoretical problem. Therefore I hope you will allow me
>>>>>>to try to redress the discussion. And let me start with an attempt to
>>>>>>bring to light two important theoretical difficulties of Marx's
>theories of
>>>>>>exploitation and class. These are the problems that prompted my research
>>>>>>agenda on the employment contract.
>>>>>>1. The "labour-power value" paradox. Marx and Engels assume the so called
>>>>>>"law of value" or "low of exchange", whereby any commodity is paid in the
>>>>>>market its real value (to avoid entering the TLV question, let me assume
>>>>>>that commoditities exchange at production prices). Competition brings
>>>>>>this result. Marx and Engels make this assumption to make sure that the
>>>>>>analysis of exploitation is focused on production conditions and not on
>>>>>>unequal exchange in the market. In analytical terms the law of value
>can be
>>>>>>reformualte as follows: The price of any commodity coincides with its
>>>>>>production costs and with the present value of its future streams of
>>>>>>The question is: Where does a positive profit come out if labour
>power too
>>>>>>is a commodity? If competition compels it to receive a price coinciding
>>>>>>with the present value of its future streems of services, there can be no
>>>>>>exploitation. Marx would answer - If the capitalists earn no profit they
>>>>>>reduce investments, the industrial reserve army rises, etc. etc.
>>>>>>the capitalist must earn at least a "normal" profit.
>>>>>>Samuleson would answer: Oh, yes! This precisely what I say. In fact the
>>>>>>normal profit in competitive equilibrium is nil.
>>>>>>Marx - But the value of labour power is a subsistence wage.
>>>>>>Samuelson - But certainly not a purely physical subsistence.
>>>>>>Marx - Certainly not. There are habits and customs and trade unions and
>>>>>>Samuelson - No. You assumed comnpetition. Therefore no bargaining.
>>>>>>Marx: OK. So what?
>>>>>>Samuelson - The long run equilibrium prices are fixed by the forces of
>>>>>>competition at the level that makes them coincide with the cost of
>>>>>>production. The value of labour power must be established accordingly, if
>>>>>>labour power is a commodity. And also the production conditions of labour
>>>>>>power must be determined accordingly
>>>>>>Enters Veblen - Pricesely what I say: Habits and customs are
>endogenous in
>>>>>>the long run.
>>>>>>Marx - Yes, but I insist: so what?
>>>>>>Samuelson - If there is a positive profit, investements increase, the
>>>>>>industrial reserve army shrinks and wages (and habits and customs, in the
>>>>>>long run, and therefore the real production cost of labour power) rise to
>>>>>>their equilibrium value. When they reach this value profits must be nil.
>>>>>>Marx - But the subsistence wage changes slowly, certainly much slower
>>>>>>the the market prices of the other commodities.
>>>>>>Samuelson - This means that the law of value, that you assumed to avoid
>>>>>>explaining exploitation as a production phenomen and not as a market
>>>>>>phenomen, does not apply to labour power. You can account for
>>>>>>only if the law of value does not apply to labour power.
>>>>>>Marx - what does that mean?
>>>>>>Samuelson - It means that you are explaing exploitation as a market
>>>>>>phenomenon: there is exploitation because there is no perfect competition
>>>>>>in the labour market!
>>>>>>Marx - OPEL comrades, help!
>>>>>>Screpanti - there is only one way out: Labour power is not a
>commodity. The
>>>>>>wage is not a price of a commodity. The labour market does not exist.
>>>>>>Unions and labour movements do exists. Exploitation is the consequence of
>>>>>>the exercise of power in the labour process. It occurs because the wage
>>>>>>rate is fixed through bargaining ex ante (before the beginning of the
>>>>>>production process), while labour productivity is determined by the
>>>>>>capitalists' power ex post (i.e. in the labour process).
>>>>>>2) The paradox of "class demarcation". Now I have no time to present you
>>>>>>this second problem. Let me reserve it for another message.
>>>>>>Ernesto Screpanti
>>>>>>Dipartimento di Economia Politica
>>>>>>Piazza S. Francesco 1
>>>>>>53100 Siena
>>>>>>tel: 0577 232784
>>>>>>fax: 0577 232661
>>>>>Dr. Steve Keen
>>>>>Senior Lecturer
>>>>>Economics & Finance
>>>>>University of Western Sydney Macarthur
>>>>>Building 11 Room 30,
>>>>>Goldsmith Avenue, Campbelltown
>>>>>PO Box 555 Campbelltown NSW 2560
>>>>>s.keen@uws.edu.au 61 2 4620-3016 Fax 61 2 4626-6683
>>>>>Home 02 9558-8018 Mobile 0409 716 088
>>>>>Home Page: http://bus.macarthur.uws.edu.au/steve-keen/
>>>>>Workshop on Economic Dynamcs: http://bus.macarthur.uws.edu.au/WED
>>>Dr. Steve Keen
>>>Senior Lecturer
>>>Economics & Finance
>>>University of Western Sydney Macarthur
>>>Building 11 Room 30,
>>>Goldsmith Avenue, Campbelltown
>>>PO Box 555 Campbelltown NSW 2560
>>>s.keen@uws.edu.au 61 2 4620-3016 Fax 61 2 4626-6683
>>>Home 02 9558-8018 Mobile 0409 716 088
>>>Home Page: http://bus.macarthur.uws.edu.au/steve-keen/
>>>Workshop on Economic Dynamcs: http://bus.macarthur.uws.edu.au/WED
>> Riccardo Bellofiore
>>Office: Department of Economics
>> Piazza Rosate, 2
>> I-24129 Bergamo, Italy
>>Home: Via Massena, 51
>> I-10128 Torino, Italy
>>e-mail bellofio@cisi.unito.it, bellofio@unibg.it
>>tel: +39 035 277545 (direct)
>> +39 035 277501 (dept. secr.)
>> +39 011 5819619 (home)
>>fax: +39 035 249975
>Dr. Steve Keen
>Senior Lecturer
>Economics & Finance
>University of Western Sydney Macarthur
>Building 11 Room 30,
>Goldsmith Avenue, Campbelltown
>PO Box 555 Campbelltown NSW 2560
>s.keen@uws.edu.au 61 2 4620-3016 Fax 61 2 4626-6683
>Home 02 9558-8018 Mobile 0409 716 088
>Home Page: http://bus.macarthur.uws.edu.au/steve-keen/
>Workshop on Economic Dynamcs: http://bus.macarthur.uws.edu.au/WED

        Riccardo Bellofiore
Office: Department of Economics
        Piazza Rosate, 2
        I-24129 Bergamo, Italy
Home: Via Massena, 51
        I-10128 Torino, Italy
e-mail bellofio@cisi.unito.it, bellofio@unibg.it
tel: +39 035 277545 (direct)
        +39 035 277501 (dept. secr.)
        +39 011 5819619 (home)
fax: +39 035 249975

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