[OPE-L:3529] Re: Re: Re: Gil's criticisms

From: Gil Skillman (gskillman@mail.wesleyan.edu)
Date: Thu Jun 22 2000 - 14:57:46 EDT

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I'm just back after being called suddenly out of town for ten days.
Consequently I'm just now catching up with a number of standing discussion
threads. Here's a response to Fred's post 3372, with my apologies for the
inordinate delay.

>This is a response to Gil's recent posts. Gil, thanks for your helpful
>posts. I think we are inching forward and maybe on the verge of making
>significant progress.

Well, I guess "progress" is in the eye of the beholder, Fred. We don't
seem to be converging on the key issues, including the fundamental ones of
what Marx actually says he's doing in chapter 5 and the significance of his
invocation of capitalist production at the beginning of V. I. If any
progress is indicated in your post, I'd say it lies in this: since the
interpretation you offer below of Marx's ultimate point in Ch. 5 *in no
way* depends on the condition of price-value equivalence, you indirectly
prove the validity of my argument that his invocation of this premise as
the basis for explaining surplus value is a logical non sequitur.
Otherwise, I don't see much grounds for the claim that progress is being
made, but I'll hope for the best. Let's see.

>1. I am glad that Gil agrees with Marx's argument in Chapter 5 - that
>surplus-value cannot be created on the basis of exchange alone, either the
>exchange of equivalents or the exchange of non-equivalents. The creation
>of surplus-value is possible only with additional labor.

I don't see what there is to be "glad" about here, since this point has
*never* been in dispute in the first place--indeed, I had already affirmed
this point in post 2903, before you even entered the discussion I began
with Alfredo. Thus, this is sort of like being "glad" that we agree Marx
wrote Volume I of Capital.

>2. But Gil says that this point is obvious and "not worth an entire

No, I didn't say it was obvious, of itself; I said this followed
immediately from Marx's Chapter 4 *definition* of surplus value as being
based on *valorization* of value, rather than merely the *redistribution*
of value which existed prior to the initiation of a given circuit of
capital. As I pointed out earlier, if the creation of new value *weren't*
simply part of Marx's definition of surplus value, then Marx's assessment
of the consequences of price-value disparities in the hypothetical exchange
between parties A and B (p. 265, Penguin ed.) is necessarily a non
sequitur. To put the point conversely, if Marx hadn't *defined* surplus
value as involving the creation of new value, then one could indeed explain
(certain forms of) profit on the basis of mere redistribution of existing
value, purely commercial merchant's profit being a case in point.

Don't get me wrong; I think there are sound and powerful reasons for Marx
to define surplus value in this way. But once he does, the fact that
surplus value depends on labor newly expended subsequent to the initiation
of a circuit of capital follows *immediately* from that definition. You
don't need a whole chapter to work this out, and especially *you don't need
to make any reference whatsoever to the condition of price-value
equivalence* to make this point. That Marx insistently invokes this
condition, and offers justifications for doing so, in Chapter 5, shows the
nature of the fundamental logical error that I'm criticizing.

>3. However, although that point may be obvious to Gil, it was not obvious
>to many classical economists of Marx's day (including Malthus and
>Torrens), who continued to present theories of "profit through exchange",
>as I argued in my previous post. So it was certainly worthwhile for Marx
>to devote at least a short chapter to critique these still-influential

First, note again that the *necessary* dependence of surplus value on the
creation of new value within the circuit of capital follows solely from
Marx's definition of surplus value in terms of "valorization"; don't define
surplus value in this way, and the *necessary* connection to value creation
falls away. Thus the "worthwhileness" of Marx's argument here depends on
accepting the validity of Marx's *definition*.

But second, this has nothing whatsoever to do with my critique of Marx's
chapter 5 analysis. It is fallacious to suggest that I'm criticizing *all*
of Marx's arguments in that chapter just because I'm criticizing one set of
them (in particular, the conclusion of the chapter). Equivalently, it is
utterly irrelevant to respond to my targeted critique by arguing that there
are other things that Marx got right. This is like saying that my chapter
5 critique must be right, because I elsewhere established a valid extension
of the fundamental Marxian theorem involving variable labor effort.

>Also, one of the big unresolved puzzles of classical economics had been
>precisely how to reconcile the existence of profit in capitalism with the
>exchange of equivalents (which many of them assumed, including Smith and

This characterization is either completely inaccurate or irrelevant to
Marx's specific claims in Ch. 5 of V. I. If the phrase "exchange of
equivalents" is understood as a synonym for "price-value equivalence", then
*neither* Smith nor Ricardo posit this as a basis for explaining surplus
value, contrary to Fred's claim. Price-value disparities are fundamental
to Smith's analysis of profit by Chapter 6 of book I, and certainly by
Chapter 10. He *never* invokes the condition of price-value equivalence in
his discussion of the basis of profit. Ricardo had already accepted a
"considerable modification" of the rule of price-value equivalence, due to
unequal organic compositions, by chapter 1, well before he even got to the
chapter on profit. The condition of price-value equivalence is nowhere
invoked in that latter chapter (the premise that Ricardo does invoke, to
the effect that a commodity's "natural price" is increasing in its embodied
labor content, should obviously not be confused with the much stricter
condition of price-value equivalence).

If, as is more likely the case, "exchange of equivalents" is taken to mean
"exchange at natural prices", as the classical school almost certainly
understood it, then Marx's Ch. 5 analysis is not demonstrably to the point,
since exchange according to labor values is not the same as exchange
according to natural prices--indeed, the cases are demonstrably different,
for reasons I've argued elsewhere without dispute.

Bottom line, again, the significance or "worthwhileness" of Marx's chapter
5 argument depends on accepting the relevance of his new definition of
surplus value. Emphatically, his condition of price-value equivalence
*does not* correspond to the classical case of exchange at natural prices.
Thus one cannot justify Marx's invocation of the former condition in light
of the classicals' concern with the latter condition.

> Some of them sensed that somehow the exchange between capital
>and labor was not an exchange of equivalents, but they just accepted this
>contradiction as an "exception". So, another of Marx's objectives in
>Chapter 5 was to highlight this unresolved puzzle of classical economics -
>as an introduction to Marx's solution to this puzzle by the distinction
>between labor and labor-power.

Again, since it is demonstrably the case that Marx meant something
different be the condition of "exchange of equivalents" than did the
classical school, this is *completely beside the point.* While there is
considerable economic sense in taking the condition of exchange at natural
prices as a base case scenario for explaining profit, there is no sense
whatsoever--and certainly none validly established by Marx in Chapter
5--for taking the very different condition of exchange at labor values as
the reference case for explaining profit. Marx's distinction between labor
and labor *power* is of fundamental significance, of course, but contrary
to his explicit claims to the contrary, *not* because of the ability given
this distinction to explain surplus value on the basis of price-value
equivalence. As I've explained before, to posit the issue in this way, as
Marx quite explicitly does, is to fundamentally misrepresent the
significance of capitalist production for capitalist exploitation.

>Also, another of Marx's objectives in Chapter 5 was to explain how he
>intended to explain merchant profit and interest. Since no value is
>created in exchange, merchant profit and interest appear to be an

Rather, these phenomena appear to be an impossibility **if** one stipulates
the condition of price-value equivalence. That's an important caveat,
especially since the justifications Marx gives in Chapter 5 for focusing on
this condition are all invalid.

> Marx says that merchant profit and interest will be
>explained later as parts of the total surplus-value produced by industrial

But this necessarily begs a question, since by Marx's own account surplus
value was generated by circuits of merchant and usury capital which
*historically preceded* the circuit of industrial capital, and furthermore
appropriation of surplus value via these antecedent circuits *necessitated*
targeted price-value disparities. Thus, unless Marx is taken to assume his
conclusion (a route that Fred evidently defends--see below), this is
another indication of the invalidity of stipulating price-value equivalence
as the basis for explaining surplus value.

>These were Marx's main concerns in Chapter 5, which, from his perspective,
>were certainly worth a short chapter.

Not really, for all the reasons given above.

>4. Gil main critique is that Marx's argument in Chapter 5 proves only
>that SOME KIND OF LABOR is necessary for the production of surplus-value,
>but it does not prove that this labor must be wage-labor within
>capitalism. It could be the labor of independent producers in simple
>commodity production, related to merchant capital or usury capital.

No, this *isn't* my "main critique [of] Marx's argument in Chapter 5"; it
is somewhat disheartening that my critique of that chapter is still being
fundamentally misrepresented so far into the discussion. My "main
critique" is that no valid grounds are established by Marx for his
concluding stipulation that surplus value is to be explained on the basis
of the "exchange of equivalents" (i.e., price-value equivalence (PVE)).
This stipulation does not follow from the observation that surplus value
cannot be explained on the basis of price-value disparities *alone*, which
is an immediate consequence of Marx's *definition* of surplus value in any
case; and it is not justified by the assertion that price-value equivalence
corresponds to the "pure case of commodity exchange" or follows from "the
immanent laws of the exchange of commodities." Not only does Marx fail to
establish any economically meaningful grounds for these claims, there are
powerful reasons to reject this characterization. **The condition of
price-value equivalence is, at best, an utter red herring with respect to
the explanation of surplus value. No valid argument in Chapter 5
establishes otherwise.**

An immediate *consequence* of my chapter 5 critique is that Marx's sole
explicit justification at the beginning of Chapter 6 for focusing on the
purchase of labor power at its value and the extraction of surplus labor
under capitalist production is this fallaciously motivated condition of
price-value equivalence. Without this motivation, there is no basis for
this focus unless it is simply *assumed* from the beginning, in which case
the invocation of price-value equivalence is *completely beside the point.*

Contrary to Fred's representation above, my main purpose in invoking the
historical cases of merchant and usury capital extended directly to value
producers is to demonstrate by counter-example the invalidity of one of
Marx's Chapter 5 justifications for invoking the condition of price-value
equivalence. I address Fred's criticisms of this demonstration, and its
relevance, in my posts 3363 and 3377; Fred has not responded to this defense.
>According to Gil, Marx failed to prove that capitalist production with
>wage-labor is the necessary or superior from of the extraction of
>surplus-value, compared to these other modes of production.

Again, this misrepresents what I've argued. Fred, you apparently still
maintain the conviction that I'm somehow imposing an argument on Marx that
he doesn't make, but that is not the case. I take a conclusion he
explicitly makes in Chapter 5 and show that it is not validly established
(using counter-examples to the circuit of industrial capital where
appropriate to illustrate the nature of the fallacy involved), with the
consequence the *inference* Marx subsequently, and quite explicitly, draws
from this conclusion is necessarily also based on invalid premises. Of
course, if Marx simply assumes his Chapter 6 conclusion (possibly among
other things), then this invalidity--as well as the condition of
price-value equivalence--is beside the point, but then another, and
arguably much more severe, logical problem is created--see below.
>5. I argue, to the contrary, that Marx's theory is about capitalist
>production (specifically and solely) from the very beginning in Chapter 1
>(as the first sentence tells us).

The first sentence of Volume I signals that Marx is interested in analyzing
the phenomenon he calls "the capitalist mode of production." It *does not*
say that Marx premises his analysis in Chapters 1-5 on the explicit
condition that surplus value flows *solely* from circuits of industrial
capital, i.e. the form of the circuit of capital based on wage labor and
capitalist control of production, and this is true *even if* one
understands "capitalist production" as a definitional component of
"capitalist mode of production". In my post 3237, I give an alternative
interpretation of Marx's "starting point", and give 5 textual grounds for
believing that this alternative interpretation is superior, and in
particular makes Marx look less ridiculous and self-contradictory, than
Fred's. Fred, given the huge volume of e-arguments on this thread, and
especially given delays in my responses, I certainly won't presume that you
should have responded to this post; but I am curious what you think of my
counterarguments on this score.

> This was my entry point into this
>latest round of discussion. We have discussed many passages in previous
>posts that support this interpretation.

In my post 3237, I identify several passages that are flatly at odds with
this interpretation.

>In addition, Marx states explicitly in Chapter 5 that his theory is about
>"the primary form of capital, the form in which it determines the economic
>organization of modern society" (p. 266); i.e. industrial or productive

The passage in question says something quite different, and the difference
is both subtle and absolutely critical. First, notice the "i.e" clause
Fred appends above is not in the passage he refers to. This is *Fred's*
interpretation, but Marx does not say that he is referring solely to the
industrial circuit of capital in using this phrase. It is much more likely
that the phrase "primary form of capital", used by Marx on p. 266 of Ch. 5,
is a synonym for the phrase "general formula of capital", first invoked by
Marx on the last page of Chapter 4. [I'll bet that this equivalence is
more apparent in the original German].

Now if you read the passage in Ch. 4 leading up to Marx's invocation of the
term "general formula of capital", you'll see that he explicitly accepts
merchant and interest-bearing capital as legitimate candidates of the
general formula:

"Buying in order to sell, or more accurately, buying in order to sell
dearer, M-C-M [the unadorned last M is a typo; it should read M'], seems
admittedly to be a form peculiar to one kind of capital alone, merchants'
capital. But industrial capital too [notice the "too"---not "only"] is
money which has been changed into commodities, and reconverted into more
money by the sale of these commodities...Lastly, in the case of
interest-bearing capital, the circulation M-C-M' presents itself in
abridged form...as M-M', i.e money which is worth more money, value which
is greater than itself [notice it's an "abridged form" not an "alternative"
or "contrary" form]. M-C-M' is in fact therefore the general formula of

Notice not only that Marx *does not* rule out merchant and interest-bearing
capital by assumption, contrary to Fred's interpretation, but he apparently
accepts merchant capital as an obviously acceptable instance of the general
formula, and feels the need to justify the circuit of industrial capital as
an *additional* legitimate instance of this formula.

Returning to the Chapter 5 passage Fred quotes, in light of the above we
see a very different reading than the spin Fred gives it--to wit:

(Paraphrase)"It can be understood, therefore, why, in our analysis of the
general formula of capital M-C-M', the form in which it determines the
economic organization of modern society, we have entirely left out of
consideration its well-known and antediluvian forms, merchants' capital and
usurers' capital."

The reasons for the "therefore" in the statement are clearly those advanced
in the immediately previous pages: namely, that price-value disparities
alone can't account for the existence of surplus value. As Marx goes on to
say in the continuation of the passage quoted by Fred, merchant and usury
capital are based on just such price-value disparities. But I've shown the
fallacy in this reasoning: Marx has only shown that price-value
disparities can't account for value *creation* (VC); he hasn't said a word
one way or the other about the connection of price-value disparities to
value *appropriation* by capitalists (VA). But by Marx's own stipulation,
surplus value requires *both* VC and VA. Consequently his dismissal of
merchant and usury capital in this passage is fallacious.

In any case, the passage quoted by Fred *does not* say that Marx has
premised his Chapter 5 analysis on the universal dependence of surplus
value on the circuit of *industrial* capital.

>Plus, as already noted, Marx also states in Chapter 5 that he will later
>analyze merchant capital and interest-bearing capital as
>"derivative" forms of this "primary" form of capital; in other words, he
>will analyze merchant capital and interest-bearing capital as they
>function in relation to capitalist production, and not in relation to
>other non-capitalist modes of production.

Yes, he does say this, but his *justification* for doing so manifestly
derives from the immediately preceding argument concerning the connection
of price-value disparities to VC (remember the "therefore" in the passage
cited by Fred), *not* because he's *assumed* that surplus value is
universally based on the circuit of industrial capital. And this
justification is fallacious.

>Therefore, Marx's theory is about capitalist production from the very
>beginning and Marx is not trying to derive capitalist production in
>Chapter 5 as the necessary from of extraction of surplus-value.

Fred's "Therefore" here does not follow from the passage he cites. See above.

> The
>latter is Gil's question, not Marx's question.

No, it is *not* my question. Fred again fundamentally misrepresents my

> Paul Z. is correct - Gil
>has changed the question.

I'm not sure if Paul Z. still believes this--I certainly hope not--but if
so he is also wrong, because I am criticizing *Marx's own* implicitly
stated claims and the inferences he draws from them, not some
interpretation I'm imposing on Marx's argument.

>6. Gil then says, OK, if you assume that Marx's theory assumes capitalist
>production, then his argument on the first page of Chapter 6 about the
>necessity of labor-power as a commodity is CIRCULAR. Since
>labor-power as a commodity is "essentially synonymous with capitalist
>production," then Fred's statement that Marx was trying to prove that
>labor-power in capitalism is the only source of surplus-value in
>capitalist production amounts to: Marx was trying to prove that capitalist
>production is the only source of surplus-value in capitalist production.

>7. But Gil's argument is fallacious. Capitalist production is NOT
>SYNONYMOUS with labor-power as a commodity. Capitalist production
>INCLUDES MANY OTHER FEATURES besides labor-power as a commodity (including
>the marginal productivity of capital, the scarcity of capital, the
>abstinence of capitalists, etc).

First: at most, this claim *does not* establish that my claim of tautology
is "fallacious"; it only shows that it should be worded slightly
differently--and *very* slightly, at that. That is, instead of the simple
tautology "if A, then A", we have, by Fred's reading, "if A, B and C, then
A". This is still a simple tautology, Fred. A slightly messier one, but
still a simple tautology.

Second, the other attributes Fred associates with capitalist production
are either not intrinsic to that concept or else ruled out simply by Marx's
definition of surplus value, *unlike* the purchase and subsumption of labor
power as a commodity. Capitalist production does not depend on "the
marginal productivity of capital", and indeed the latter is undefined if
production cannot be represented by a differentiable production function.
It is also manifestly the case that capitalist production does not
presuppose the scarcity of capital, since it is logically possible to
imagine capitalists owning the means of production and yet accruing no
profit. As for the "abstinence" of capitalists, Marx rendered this
irrelevant to the existence of surplus value before he even got to chapter
5, by defining surplus value in terms of valorization, i.e., creation of
new value, rather than redistribution of existing value. "Abstinence" is
not production, and thus *by Marx's definition* cannot create value or
surplus value.

So, in terms of descriptors of capitalist production that are both
intrinsic and not ruled out by definition, Marx's argument is even more
obviously a simple tautology---under Fred's interpretation of Marx's
argument, that is. But *even granting* Fred's reading that Marx intended
to assert this simple tautology, the key fact remains that the condition of
price-value equivalence is *utterly irrelevant* to the point that Fred
imputes to Marx. See below.

> Marx's theory (and Marx's theory
>alone) concludes that the one feature of capitalist production, among all
>these other features, that is responsible for surplus-value is the
>purchase and utilization of labor-power. This conclusion follows from
>Marx's assumption that labor is the source of all value (derived in
>Chapter 1).

One also needs the *definitional* condition that surplus value is based on
the creation of new value subsequent to the initiation of a given circuit
of capital. And once you have this condition, the premise of price-value
equivalence is **completely irrelevant* to demonstrating the existence of
surplus value, contrary to Marx's exlicit insistence at the end of Ch. 5
(and elsewhere). So in effect, Fred's argument proves the point of my
Chapter 5 critique!

  In this way, Marx's conclusion that labor-power is the one
>feature in capitalist production that produces surplus-value is NOT
>CIRCULAR, but rather follows as a straightforward logical deduction from
>his assumption of the labor theory of value:

First: that the existence of surplus value presumes the expenditure of new
labor subsequent to the initiation of a given circuit of capital follows
*immediately* from Marx's definition of surplus value in terms of
"valorization" of value rather than merely the *redistribution* of value
that existed prior to initiation of the circuit. Thus this result is more
stark than a "straightforward logical deduction"; it's a tautology, given
Marx's *definition*. Conversely, if Marx had *not* defined surplus value
in this way, the conclusion that surplus value requires new expenditures of
labor *would not* follow from the assumption that labor is the only source
of value.

Second: Contrary to Marx's explicit claims at the end of ch. 5 and
elsewhere, demonstrating the connection between surplus value and value
creation does not depend in any meaningful or relevant way on the condition
of price-value equivalence. It's *possible* to explain surplus value on
the basis of price-value equivalence, of course, but to elevate the latter
to a canonical case, as Marx does, is fundamentally to misrepresent the
significance of the labor-labor power distinction for capitalist
exploitation (this point is spelled out most fully in my first S&S article,
but also in my earlier replies to Allin and Paul Z.).

Third: Marx's conclusion with respect to labor power at the beginning of
Chapter 6 is very different than how Fred represents it here, and the
difference is critical: the inference Marx draws concerns the purchase of
labor power *as a commodity*. But it is logically possible to have
capitalist control of production, and surplus value, without purchasing
labor power *as a commodity*. As in the case of the putting-out system,
capitalists could, in purely logical terms, purchase specific *labor
services* that flow from given capacities to labor, as when capitalists
"contract out" specific productive functions. In doing so they do not
purchase the *capacity* to labor, they purchase contractually specifiable
*manifestations* of this capacity. Thus, once again, Marx's invalid focus
on the premise of price-value equivalence essentially misrepresents the
significance for capitalist exploitation of the purchase and subsumption of
labor power *as a commodity.*

So perhaps I could put my argument more directly: if Fred's interpretation
*doesn't* render Marx's argument a simple tautology, that argument is then
necessarily a non sequitur!

>Marx's argument would be circular if he were trying to answer Gil's
>question - that capitalist production is the superior from of extraction
>of surplus-value, compared to other modes of production.

And Fred's criticisms would be relevant if this were indeed "Gil's
question". But it isn't.

> If Marx assumed
>capitalist production and then tried to derive capitalist production, then
>this would indeed be circular reasoning.

If Marx assumed capitalist production, a definitional aspect of which is
the purchase and subsumption of labor power as a commodity, and then
derived the purchase and subsumption of labor power as a commodity, this
would still be a simple tautology. If, on the other hand, the purchase of
labor power *as a commodity* is *not* taken as a definitional aspect of the
capitalist mode of production, then Marx's inference at the beginning of
chapter 6 is invalid *unless* one assumes the condition of price-value
equivalence. But Marx's arguments in support of positing this condition
are all invalid, as I've argued elsewhere. Thus my critique ends up at the
same conclusion, even in light of the arguments advanced by Fred in this
post: Marx's analysis in Part 2 of V. I--the part of it that I'm
explicitly criticizing, that is---is either a non sequitur or a simple
tautology. Either way, the condition of price-value equivalence is,
contrary to Marx's claim, irrelevant at best to his account of surplus
value. **Marx's labor theory of exploitation does not depend on, and is
not well served by, his labor theory of exchange value.**

 But this is Gil's question, not
>Marx's question.

Not true. See above.
>8. Gil also says that this conclusion of Marx's - that labor-power is the
>source of surplus-value in capitalist production - is "completely beside
>the point" and "not the issue" in his critique of Marx's argument. Gil
>accepts that labor-power is the source of surplus-value in capitalist
>production, but argues that Marx failed to prove capitalist production is
>the superior source of surplus-value, compared to other modes of

This statement *utterly* misrepresents my critique. See above.

>But, Gil, maybe this conclusion is beside the point FOR YOU and your
>critique, but it was not beside the point FOR MARX.

Again, Fred, you persist in representing my critique of Marx's chapter 5
argument. See above.

> It was THE POINT for

Marx is manifestly doing something more than this, as he says quite
explicitly at the end of Ch. 5 and the beginning of Ch. 6. My critique
concerns the role Marx explicitly asserts for the condition of *price-value
equivalence* in explaining surplus value. Marx's justifications for
asserting this condition are invalid, and consequently it does not provide
a valid basis for his subsequent focus on the purchase and subsumption of
labor power *as a commodity*. In effect, your interpretation of Marx's
argument above (summarized in your capitalized "IF-THEN" statement)
demonstrates this, since the validity or meaning of that statement *in no
way* depends on the condition of price-value equivalence.

  And the vast majority of economists - in Marx's day and ours -
>would disagree with Marx's unique conclusion that labor-power is the sole
>source of surplus-value in capitalism. This is a very big deal.

This sweeping claim cannot be proven one way or another, of course, but my
guess is that it essentially misrepresents what the "vast majority of
economists" think about the issue. First, most economists probably don't
care one way or the other, perhaps because they don't think that Marx's
notion of capitalist exploitation is the basis for a serious indictment of
capitalism. As Joan Robinson said, for most workers the worst thing that
could happen to them is *not* to be exploited by capitalists.

Second, the connection between labor power and surplus value is a
tautology, given Marx's definition of the two terms. Few economists are
going to have a serious problem accepting a tautology, even if they think
it's a pointless one. Plenty of mainstream economists have seen the
Fundamental Marxian Theorem, which asserts a corollary of the result you
indicate above. None of them, so far as I know, disputes the theorem once
they understand the claim and see the proof.

Third, whether or not this connection is a "big deal" is, again, beside the
point of my critique. I'm not disputing Marx's claim about the connection
between surplus value and exploitation of labor power, so this point of
yours is necessarily a red herring.

Fourth, and again, I think you're misrepresenting Marx's point in Ch. 6,
which is more specific than the point you assert above. Marx focuses not
just on the distinction between labor and labor power, but on the purchase
of labor power *as a commodity* and its subsumption in
capitalist-controlled production. The point of my critique is that Marx's
justification for this focus, developed in Ch. 5, is invalid.

>And Marx's innovation of the concept of labor-power enabled him to solve
>the long-standing unresolved problem in classical economics - this is not
>beside the point, but a significant accomplishment.

Not really--see above concerning the distinction between "exchange at
natural prices" and "exchange at values".

>This distinction
>between labor and labor-power enabled Marx to explain that, although the
>purchase of labor-power by capitalists on the market is an exchange of
>equivalents, this exchange is not the end of the relationship between
>capitalists and workers. The purchase of labor-power is followed by the
>performance of labor by workers in production, which results in additional
>value, and which therefore is the ultimate source of the capitalist's

Yes, of course, but irrelevant to my critique, for the reasons carefully
enumerated above.

> What appears as an exchange of equivalents on the market
>is now revealed to be exploitation in production.

A repetition of previous points. See above.

 I think this is a
>brilliant theoretical achievement, and one which still today captures the
>essential truth about capitalist economies.

Contrary to Marx's explicit assertion at the end of Ch. 5 and elsewhere,
whatever is "brilliant" in this achievement in no way depends on the
invalid condition of price-value equivalence. Why do you keep emphasizing
points that are not in contention?

>9. In general, Gil seems to belittle Marx's own concerns in Chapter 5 and
>6 (that no surplus-value is created in circulation, the critique of
>classical economics, that labor-power is the sole source of surplus-value
>in capitalism, the distinction between labor and labor-power, etc.) as
>"beside the point" and "not the issue".

No, of course I don't do this. The only way Fred arrives at this
conclusion is by fundamentally and persistently representing my critique,
and emphasizing points that are not at all under dispute.

> Then Gil attributes to Marx a
>concern that was not Marx's own: to prove that capitalist production is
>superior to other modes of production as a source of surplus-value.

Manifestly false. See above.

>finally Gil criticizes Marx for failing to answer Gil's question!

Again, absolutely wrong. See above.

> Again,
>that I don't think this criticism is fair to Marx and his own concerns.

And if this were at all the basis of my criticism of Marx, I would agree
with Fred's assessment. But it isn't!

>I look forward to further discussion.

So do I. I see potential grounds for "progress" in that the "brilliant"
theoretical achievements Fred attributes to Marx in no way depend on, or
are usefully illuminated by, the condition that all commodities exchange at
their respective values. Correspondingly, it does not depend on the
condition that labor power is purchased *as a commodity*, much less that
this commodity is purchased *at its value.* Thus Fred's argument in this
post in effect affirms the point of my Chapter 5 critique. If you accept
this assessment, Fred, then I agree that some progress has been made.
Otherwise, the jury is still out.


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