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My original detailed response to Fred's post 3261 got too long and
repetitive, even for me. What I'll do instead is summarize and address
Fred's main points in *his* order. Of course, the danger in this approach
is that one can mis-state or diminish the other's argument in summarizing
it; Fred, please let me know if you think I've done this.
I'd like to say that the challenges from Fred, Rakesh, Paul Z., Allin and
others have really forced me to articulate the "second-line" supporting
arguments for the critique of Marx's Ch.5/6 argument.
First, Fred says that
>1. The main point of Marx's argument in Chapter 5 is that the total
>amount of surplus-value produced by capitalist production as a whole
>CANNOT BE INCREASED SOLELY ON THE BASIS OF THE EXCHANGE OF COMMODITIES.
He then summarizes Marx's argument to this effect, put forward on p.
262-266 (Penguin ed.)
First, I agree, of course, that Marx makes this argument in Ch. 5. And
contrary to Fred's suggestion I don't consider this conclusion "trivial" or
"irrelevant", I just point out that it follows trivially from Marx's
definition of surplus value as "valorization" rather than merely
redistribution of value. And I obviously don't think the conclusion is
"irrelevant", since I identify it as one of the bases for Marx's
However, it is necessarily just Fred's interpretation that this constitutes
Marx's "main point" of the chapter; Marx never makes such a claim. The
passage Fred highlights from p. 266 that uses the phrase "final conclusion"
is referring to the conclusion of the previous 4 pages of argument. The
difficulty is that Marx keeps going for another three pages, and in his
*actual* conclusion to the chapter, he does not refer to this result as an
end in itself; rather he quite explicitly uses it as a *premise* in his
chapter-concluding inference (part of his "double result") that surplus
value "must" be explained on the basis that all commodities exchange at
their respective values:
"The reader will see from the foregoing discussion that the meaning of this
statement is only as follows: the formation of capital must be possible
even though the price and the value of a commodity be the same, for it
cannot be explained by referring to any divergence of price and value."
[footnote, p. 269].
The point of my critique is that this conclusion is a non sequitur, for
reasons made explicit most recently in my exchange with Paul Z.
Thus, it doesn't really *matter* for my critique what Marx's "main point"
in Ch. 5 is, for a couple of reasons: first, it's clear that the point *I*
criticize is one that Marx explicitly makes, and furthermore one that Marx
obviously thinks is important; indeed it is the one inference he invokes at
the beginning of the next chapter. And second, just because I'm
criticizing a key aspect of Marx's argument doesn't mean I'm criticizing
*all* aspects of Marx's argument--that should be obvious in that I'm
arguing in favoring of Marx's historically contingent analysis of
capitalist exploitation, as distinct from his value-theoretic analysis in
Ch. 5. Thus, when Fred says
>So it was important for Marx to critique these still influential theories
>of profit arising solely from exchange. And that is the main point of
there is nothing to disagree with, since that is utterly beside the point
of my critique. Whether or not it was "important" for Marx to do this,
it's still true that the inference with which he concludes the chapter is
invalid (or else circular, to anticipate a possible response).
Second, Fred argues that I've misunderstood where Marx argues what:
>3. Gil argues that the main point of Chapter 5 is something entirely
>different: to prove that surplus-value can be explained only on the basis
>of the assumption of the exchange of equivalents or prices = values.
>However, the exchange of equivalents, or prices = values, is NOT A
>CONCLUSION OF CHAPTER 5, but rather is a CONCLUSION OF CHAPTER 1 !!
First, notice the disjunction between the two statements: the inference
*Fred* is referring to is the notion that commodities exchange at their
values under some (as yet unstated) conditions. The inference *I'm*
referring to is the one, quite explicitly advanced, and for the first time,
in Chapter 5, is that *surplus value* must be explained on the basis that
all commodities exchange at their values. Thus it is entirely appropriate
for me to advance the critique with respect to Marx's chapter 5 argument.
Second, for what it's worth, I've noted all along the roots of *this*
aspect of Marx's chapter 5 argument in Ch. 1; see for example my Science &
Society pieces, or my contributions to the earlier Chapter 1 debate. So
this observation hardly constitutes a surprise or mandates a re-evaluation
of my critique. It's been part of my critique all along.
Third, to the contrary, Fred has not at all *engaged* my argument on this
point. No matter where Marx is understood to advance the claim that "the
exchange of equivalents" (understood in Fred's sense) obtains, I've
addressed the claim at length and shown in detail that, whatever it might
mean, it doesn't establish the result in a sense necessary for Marx's Ch. 5
inference. I won't go back through the details of that argument, except to
note one thing: in order to ensure economic conditions that guarantee
price-value equivalence, *even if universal capitalist production is
assumed*, one must impose empirically nonexistent and analytically
implausible conditions--i.e., not only universal application of the "law of
one price", which is at least analytically grounded in the model of perfect
competition, but also identical compositions of capital across production
sectors--which not only never holds, but has no particular analytical
significance as an economic condition.
As I've argued, moreover, imputing the assumption of universal capitalist
production to Marx's argument in Chs. 5 and 6 turns the argument from a non
sequitur to a simple tautology, i.e., it's necessarily circular. If we
drop this imputation price-value disparities are in a key sense
*fundamental* to an economic system that yields surplus value.
Finally, whatever Marx's Ch. 1 argument is held to have *validly*
demonstrated, it's not that commodities "typically* or "in the pure case of
commodity exchange" exchange at their values. To do that he would have had
explicitly to identify market conditions one would be willing to call "the
pure case", and *demonstrate*, not assert, that commodity exchange at
values follows from this scenario. Of course no such argument is made in
Ch. 1. *At most* what Marx can be taken to show (though even this is
problematic) is that labor values are a necessary *basis* for the
possibility of systematic exchange.
Thus, it's completely beside the point of my Ch. 5 critique what Marx did
in Ch. 1. It's still true that his inference, unique to Ch. 5, that
surplus value must be explained on the basis of price-value equivalence
doesn't follow from the premises he advances. Marx never establishes that
price-value equivalence corresponds to "the immanent laws of the exchange
of commodities" in anything like a sense necessary to support his Ch. 5
inference, and this charge--and the arguments to support it--have been part
of my critique all along.
Oh, and by the way, Marx acknowledges that commodities don't typically
exchange at their values at the end of the last footnote in Ch. 5.
Next, Fred argues
>4. This assumption of the exchange of equivalents is the reason why Marx
>excluded merchant capital and interest-bearing capital (usurer
>capital) from his analysis of the circulation of capital and the emergence
>of surplus-value in Volume 1 (from Chapter 5 on).
> Since, however, it is impossible, by circulation alone, to explain
> the transformation of money into capital, and the formation of
> surplus-value, merchants' capital appears to be an impossibility
> AS LONG AS EQUIVALENTS ARE EXCHANGED. (p. 266)
First, this passage supports my reading, not Fred's. Read it closely: it
doesn't say that the formation of surplus value via merchant's capital is
impossibe *because commodities exchange at their values*, it says that
surplus value can't be explained on the basis of merchant capital, given
price-value equivalence, *because the transformation of money into capital
can't be explained on the basis of exchange alone.* But the latter is the
premise *I* criticize for the role it plays in Marx's chapter-ending inference.
Placing this passage in its context further supports my argument, not
Fred's. It comes just after Marx's 4-page explanation of why price-value
disparities *taken alone* cannot account for surplus value, after which
Marx says "It can be understood, *therefore*, why..."
He doesn't rule these forms out because commodities typically exchange at
their values, he rules them out because, in his understanding, he's just
shown that price-value disparities can play central role in the account of
surplus value. But this inference is a non sequitur, as I've shown.
>Gil argues that Marx's exclusion of merchant capital and interest-bearing
>capital is not logically valid. But we can see that this exclusion
>follows directly from Marx's assumption of the "previously derived law" of
>the exchange of equivalents.
No, this is quite evidently *not* the case, and on Fred's own textual
evidence. And I reiterate: unless Marx is read as assuming his concluding
focus in Ch. 6 on the purchase and subsumption of labor power as a
commodity, the cases of merchant capital and interest-bearing capital
extended to small producers stand as logical counter-examples for the
premises of Marx's invalid inference at the end of Ch. 5.
Finally, Fred characterizes the role that merchant and usury capital play
in Marx's overall theoretical scheme, arguing in particular that
All three volumes of Capital, from beginning to end, are
>about the capitalist mode of produciton. Marx's theory is a SYSTEMATIC
>theory of a HISTORICALLY SPECIFIC CONCRETE TOTALITY - the capitalist mode
>of production. The theory is not about other modes of production at
>all. Other modes of production are considered only in a few passing, ad
>hoc, non-systematic, remarks.
First, this characterization is not literally true. Marx spends Ch. 20 and
Chapter 36 in V. III talking solely about merchant and usury capital,
respectively, in the forms they took *prior* to the capitalist mode of
production. This discussion forms part of what I call his "historically
contingent" or "historical-strategic" analysis of the class conditions of
capitalist exploitation. And these chapter-long discussions are anything
but "ad hoc" and "non-systematic"; indeed they are consistently echoed in a
body of work that stretches back to the Grundrisse.
But second, representing a theory as a "systematic" analysis of a
"historically specific concrete totality" does not absolve the theory of
the need to be logically coherent, and the portion of Marx's theory
developed in Ch.s 5 and 6 fails this test--and Fred's arguments here, I
conclude, cannot serve to alter this judgment.
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