[OPE-L:2438] Re: Re: Re: the employment contract and capitalism

From: Prof. Ernesto Screpanti (screpanti@unisi.it)
Date: Mon Feb 28 2000 - 09:58:26 EST

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Rakesh wrote in [2404]

>Of course the commodity labor power can't exchange at a production
>price into which the average rate of profit enters.

This is no problem if profit is nil. If it is not nil, then, given that wage
is advanced by the workers (so says Marx), why should they not be entitled
to an interest payment on their "Human capital"?

>: The price of any commodity coincides with its
>>production costs and with the present value of its future streams of services.
>The value of any commodity coincides with socially necessary labor time
>necessary to reproduce it. In the case of capitalistically produced
>commodities, an average rate of profit is part of what is socially

All right.

>>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
>Your understanding of the dynamics of the determination of the value of a
>commodity, labor power included, is different than Marx's.

In what?

>Marx would answer - If the capitalists earn no profit they
>>reduce investments, the industrial reserve army rises, etc. etc. Therefore
>>the capitalist must earn at least a "normal" profit.
>Only if accumulation is proceeding on the basis of a constant technical
>composition of capital; otherwise no reason to think IRA will be
>exhausted--in fact, it will be enlarged.

Not necessarily, if the rate of acumulation is higher than the rate of
productivity growth.

>>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
>Marx sets the wage at the value of labor power which is the socially
>necessary labor time required to reproduce it, though due to bargaining it
>could be above or below that. The boundaries on the value of labor power
>are determined by the intensity of the labor process, the education and
>training required for the working class to operate and design continuously
>new vintages of machinery, the degree of the development of the productive
>forces. Within these boundaries the trade union struggle matters. A
>subjective element enters into the value of labor power.
I fully agree!
>>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.
>Again only on the assumption of a constant TCC.
>>Marx - But the subsistence wage changes slowly, certainly much slower than
>>the the market prices of the other commodities.
>This would mean a rising rate of exploitation, the production of relative
>surplus value which indeed is the foundation of capitalism.
The rate of exploitation would not rise in the long run, if the value of
labour power adjusts to comply with the "law of value".

>>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!
>Not at all. Marx explains surplus value while never allowing labor power to
>sell above or below its value (though that, along with all of his concepts,
>is a dynamic entity).

Samuelson's point is that if the value of labour power (and habits and
customs) is determined endogenously and labour power does not sell above or
below its value, then there can be no exploitation.

(It goes without saying that this Samuelson is a fictitious villain)
>>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.
>What do we make of Marx then: "In order that the possessor sell it as a
>commodity he must be able to dispose of it, thus be the free owner of his
>labor capacity, of his person, He and the possessor must meet on the
>market, and enter into a relation to each other, as possessors of
>commodities, who are of equal birth, different only in that one is buyer,
>the other seller, hence both are juridically equal persons."

The law of labour and freedom of contract treats the worker as the owner of
his labour capacity. I agree that this is a myth, a form of fetishism.
Labour capacity is not a commodity, not a form of capital (Marx rejected the
notion of human capital). But then why should labour power be a commodity,
if it is intended as a flow of services of human capital?
>It's not the labor market that is a myth; what's mythical is the existence
>of juridical persons whose formal equality and formal freedom--though
>having no real content--is necessary for the sale and purchase of labor
>power. Of course the equality is a fiction, the freedom a deception. And
>the juridical person who appears in this relation is nothing more than an
>outward mask of a human being. While in reality it is mere appearance but
>in the law there is no other reality. See Lawrence Krader Dialectic of
>Civil Society, p. 232

I fully agree.



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