[OPE-L:3159] Re: Re: Fwd: Re: RE: starting points

From: Gil Skillman (gskillman@mail.wesleyan.edu)
Date: Fri May 12 2000 - 17:47:03 EDT

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Hello, Allin. You write:

>I'm aware of Gil's criticisms of the argument in the early
>chapters of Capital, and I think Gil's argument has something
>going for it, but the implication of this statement goes beyond
>what I had previously understood him to be arguing.
>Can you clarify, Gil? It seems to me that the assumption of
>price-value correspondence /does/, prima facie, create a serious
>puzzle as to the origin of surplus value -- a puzzle which calls
>for Marx's solution in terms of the distinction between the
>value created by labour and the value of labour-power.

I agree that assuming price value-equivalence creates a puzzle, Allin, and
that the logical answer to the puzzle as Marx poses it is the distinction
between the use and exchange values of labor power sold as a commodity.
But for several reasons it's the *wrong* puzzle, representing the
significance of the labor/labor power distinction in an essentially
misleading way. One doesn't *need* price-value equivalence to establish
the basis of capitalist profit in surplus value--the "fundamental Marxian
theorem" establishes that--but worse, price-value equivalence is not an
economically meaningful condition for describing an economy that
systematically yields surplus value, even in the abstract: it doesn't
correspond to the classical system of "natural prices," it doesn't
correspond to neoclassical "competitive equilibrium," and it is not
justified by Marx's observation that price-value disparities of themselves
cannot explain the existence of surplus value (which, so far as I can tell,
follows tautologically from Marx's notion of "valorization").

To the contrary, an economy that systematically yields surplus value is
*generically* one in which price-value disparities arise, and unless the
circuit of industrial capital is *universally* the vehicle for
appropriation of surplus value (bear with me for just a second), targeted
price-value disparities are to some extent even *necessary* conditions for
that appropriation.

And now to the key point you raise: restricting attention to the
analytically polar (and in no real-world capitalist economy exactly
descriptive) case in which the purchase and subsumption of wage labor is
the *only* basis for appropriating surplus value creates a *logically
possible* loophole to the preceding judgment, but in no sense an
*economically meaningful* one. Consequently the stipulation of price-value
equivalence, by elevating a mere logical possibility to canonical status,
fundamentally represents what the phenomenon of capitalist exploitation is
all about.

Let me illustrate these points by looking at a theoretical case that is not
initially the one you describe, but ends up there. Suppose that there are
significant disparities in ownership of the means of production, but
workers are not entirely expropriated. This is a world, for example, of
family farms and cottage industries, perhaps in addition to capitalist-run
factories. There are two characteristics of the general competitive
equilibrium (simply a point of reference) that emerges from this scenario:

1) Assuming that there is a range of available technical compositions of
capital, and individuals can freely choose among (economically feasible)
production processes, the wealth inequalities described above will lead to
systematic differences in the factor intensity (organic composition) of
production, with relatively wealthy producers choosing "constant
capital-intensive" techniques and relatively poor producers choosing
"variable capital-intensive" techniques. For well-known reasons these
differentials will create equilibrium disparities in commodity prices and
values. Thus price-value disparities are *characteristic of*, rather than
*accidental to*, this scenario of wealth inequalities---inequalities that,
in extreme form, Marx takes as a necessary condition for systematic
capitalist exploitation

But John Roemer has demonstrated an even stronger connection between these
wealth inequalities and exploitation: supposing that producers relate to
each other in exchange *only* as commodity producers, there will be a
transfer of (newly created) value from poor to
rich that, other things equal, corresponds precisely to the surplus value
that the wealthy would reap if they exchanged via capital markets rather
than commodity markets. That is, the products of the relatively poor will
embody more socially necessary labor time than the commodities of the
relatively wealthy, and the resulting value transfer corresponds, other
things equal, to the surplus value the wealthy would reap if they related
to poor producers via capital markets rather than commodity markets.

2) Now let's suppose the latter happens. In this world, there are at
least three possible circuits of capital: usury capital (as in the case of
production loans to family farms), merchant capital (as in the putting-out
system), and Marx's canonical case of industrial capital. Ignoring
strategic considerations, just as Marx does through Parts 1 and 2 of Volume
I, these three circuits are all adequate to the appropriation of surplus
value (I don't know if this contention is controversial--my authority on
this is Marx, both explicitly and as deduced from his definition of surplus
value--but if so please just take it as given for the sake of argument).
However, the former two *require* targeted price-value disparities in order
for capitalists to appropriate some of the newly created value made
possible by the relevant circuit of capital. Thus, imposing the condition
of price-value correspondence in this world has the effect of outlawing,
without any justification, avenues of surplus value appropriation that are
isomorphic to that of industrial capital--at least on the analytical
grounds established or permitted by Marx as of V. I, chapter 6.

3) But now suppose we take the limiting case of this scenario, such that
the small propertyholders are completely expropriated, creating a working
class "free in the double sense" as Marx depicts it in V. I, Ch. 6.
Critically, nothing fundamental changes from the previous characterization:
 wealth disparities are still necessary and presumptively sufficient (more
on the latter in a moment) for capitalist appropriation of surplus value;
price-value disparities still prevail (although in this case only
capitalists own the alienable means of production), and the three
alternative circuits of capital (two of which *require* price-value
disparities for capitalist appropriation of surplus value) are equally
productive of surplus value **absent considerations not mentioned by Marx
at this stage in his analysis.**

There is, however, one minute change: in this world it is *logically*
possible to imagine analytical conditions that ensure price-value
correspondence without fundamentally contradicting the pattern of wealth
inequalites that is necessary for the systematic appropriation of surplus
value in the first place, by Marx's own assessment. This is a world in
which, by fiat, all technical compositions of capital are identical and the
circuit of industrial capital is the *only* basis on which workers can gain
access to the means of production (descriptively unrealistic, even in
contemporary capitalism, I might add).

Thus, in effect, Marx elevates what can only be considered a logically
possible, but not particularly interesting or relevant, outcome of an
extreme and descriptively unrealistic scenario to the status of a canonical
case, and in so doing essentially misrepresents the nature and logic of
capitalist exploitation, and by extension the role of capitalist production
in that phenomenon. I won't repeat the arguments demonstrating that Marx's
Ch. 5 justifications for doing so are invalid.


>[I'm talking about a world (ours) in which commodities are
>produced by capitalist enterprises that hire labour (-power) in
>order to produce commodities, not a parallel universe of

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