[OPE-L:3411] Re: Re: Re: Gil's criticisms

From: Gil Skillman (gskillman@mail.wesleyan.edu)
Date: Thu Jun 01 2000 - 16:27:55 EDT

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Hi, Jerry. You write:
>I have a hypothetical question for you: Assume an economic system in
>which all production is being performed by small producers (e.g.
>family farmers and self-employed artisans) who are dependent on
>loans from usurers. Assume, further, that all products are produced
>with the intention of being sold. The question: do you consider
>this economic system to be capitalist?

To me, this is not the relevant counterfactual, since it changes the status
quo along more than one dimension, and arbitrarily so. So if you'll
indulge me for a second, let me pose and answer a slightly amended
hypothetical question, and ask you if it fits the point you're after.
Then I'll return to your question as posed.

Let's assume a system that we would all agree is capitalist--that of the
U.S., for example. Now imagine that for whatever reason, capitalists elect
to exploit workers solely via a modern version of the putting-out system,
such that capitalists engage teams of workers to produce using solely
equipment and materials owned and supplied by capitalists. The essential
difference from the status quo is that capitalists exercise no direct
control over the production process, and don't even independently control
the management team that runs production. Thus they must either engage the
entire labor team--both supervisory and line workers--or not engage it at all.

The reason I pose this version of the hypothetical question is that Jerry's
imposes, in my understanding, too many additional changes from the status
quo that are idiosyncratic to the historical period in which usury capital
first developed. Of particular significance here are (1) the restriction
to "small" producers rather than labor teams capable of running even the
largest-scale existing production processes, and (2) the restriction to
usury, that is, loan, that is, interest-bearing capital, which yields fixed
rather than variable income streams. Capitalists might typically prefer to
take the latter, so that the restriction to fixed income loans could be

Supposing that my reasons for amending your hypothetical question are
satisfactory, Jerry, I can answer that I would certainly consider the
hypothetical economy to be a capitalist one. To do otherwise, I think, is
to confuse surface detail with underlying causes, something that Marx would
certainly have warned us against. Control of production is a strategic
weapon used by capitalists to ensure the maximum possible extraction of
surplus value. Were this weapon strategically unnecessary, for whatever
reason, that would mean that capitalists could extract at least the same
amount of surplus value, and thus exploit workers to at least the same
extent, without actually running the production process. Exploitation is
still exacted via market exchange relations (i.e., via circuits of
capital), and surplus value still "originates" in production--workers must
create new value in order to pay off the capitalists. Thus, per Marx's
dictate in V. I Chapter 5, surplus value has "its origin both in
circulation and not in circulation." Therefore the system is, in my view,
certainly capitalist.

To meet exactly the conditions of your hypothetical question, I would have
to add the following stipulations to my amended one: if, despite being
able to resort to variable-income capital exchanges and to contract with
*large* labor teams, capitalists elect to finance only small producers, and
through usury capital contracts, then for the reason given above I would
not hesitate in calling this new scenario capitalist, as well.

If you would not allow me these amendments, I'd have to ask about the
seemingly arbitrary restrictions to small production processes and solely
usury capital. For what it's worth, I don't consider the historical
periods in which these conditions coexisted to feature capitalist
economies, although I certainly agree with Marx's repeated assessment that
they involved relations of capitalist exploitation.


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