[OPE-L:4006] Re: Re: Re: Surplus value or surplus argument?

From: Steve Keen (s.keen@uws.edu.au)
Date: Sun Oct 08 2000 - 10:26:48 EDT

When I said that surplus value is proportional to necessary labor, I meant
that in the labor theory of value the ratio S/V is taken as constant. If
your key equation is instead

S= m.L - V

then I don't see how you can maintain a constant rate of surplus value
across industries. Therefore if this equation is made pivotal, I think you
have a rather different theory to the one Marx set out.

At 12:23 AM 10/7/2000 -0400, you wrote:
>On Fri, 6 Oct 2000, Steve Keen wrote:
>> Subject: [OPE-L:3976] Re: Surplus value or surplus argument?
>> Thanks Fred,
>> Yes it is proportionality in the strict sense of the word, but it is no
>> longer Marx's theory in the strict sense of the word.
>Steve of course later retracted the agreement stated in the first part of
>this sentence in a later post (a reply forthcoming).  As for the assertion
>in the second part of this sentence:  this is Steve's opinion, of
>course.  I think this proportionality IS Marx's theory, as he presented it
>in Capital, as discussed further below. 
>> This is where I believe the divide arises between myself, Ajit, Gil et al
>> on one broadly defined side of this debate (possibly including Allin & Paul
>> on this issue), and yourself. Both sides are saying that Marx's theory as
>> he wrote it can't be sustained, in that strict proportionality between
>> surplus value and necessary labor can't be correct.
>Steve, I am NOT saying that "Marx's theory as he wrote it cannot be
>sustained".  I am saying the opposite: that Marx's theory as he wrote CAN
>be sustained.  
>Secondly, I don't understand why you say that surplus-value value is
>proportional to NECESSARY labor. Surplus-value is proportional to SURPLUS
>labor.  What do you mean by "necessary labor"?   Is this a slip?
>> You are saying that so long as we bring in an unobservable modifier m, then
>> we can make S proportional to V when this modifier is part of the equation.
>> Well, mathematically, perhaps; but what does this do to the simple Marxian
>> clarion call that all surplus arises from labor (with which I don't agree,
>> of course, but it's a very large part of why people are initially attracted
>> to Marx)? Surplus is an unobservable number times L, minus workers' wages?
>> Any potential recruits who heard that argument at a first meeting with
>> the IS would wobble out of the meeting hall and go looking for a less
>> confusing belief system.
>> This of itself doesn't concern me too greatly, but it's a sign of the
>> divide which exists between the simple message which recruits people to
>> an initial interest in Marx, and the complex footwork needed to sustain
>> a comparable message once you look very closely at the argument.
>Steve, m is not just an "unobservable modifier", just a number, without
>any theoretical content.  Rather,  m expresses quantitatively the basic
>assumption of Marx's labor theory of value: that each hour of abstract
>labor produces m amount of money-value (e.g. 0.5 shillings per hour).  m
>is not something unrelated to labor, but is instead the rate at which
>labor produces money new-value.  The labor theory of value cannot be a
>theory of prices with L alone.  m is also required.  
>Next, the variable explained by Marx's theory is not "surplus",
>but surplus-value, which is defined as dM and illustrated as 3
>shillings.  Steve, what do you mean by "surplus"?
>As for the clarion call, here is how I understand Marx's theory of
>surplus-value (with Marx's numerical examples from Chapter 7):
>1.  Workers are paid a certain daily money-wage (V), which Marx took as
>given (e.g. 3 shillings).  
>2.  Workers are then put to work producing money new-value, at a given
>rate per hour (e.g. 0.5 shllings per hour).  
>3.  Necessary-labor-time is the number of hours required for workers to
>produce money new-value that is equal to the money-wage that they are paid
>(e.g.  NLT = V/m = 3 sh. / 0.5 sh. per hour = 6 hrs).
>4.  Surplus-labor-time is the rest of the working day, i.e. the difference
>between the total working-day and necessary-labor-time (e.g. SLT = 12
>hrs. - 6 hrs. = 6 hrs).
>In this surplus-labor-time portion of the working day, workers continue to
>produce money new-value at the rate of 0.5 sh. per hr., but this
>additional new-value no longer goes to replace (or "pay back") the
>money-wage paid to workers.  Rather, this additional new-value produced in
>the surplus-labor-time becomes the surplus-value of capitalists (S = mLs =
>3 sh.)
>Thus it is clear from this theory that surplus-value is produced by
>workers in the surplus-labor time portion of their working day (and by all
>workers, not just workers that produce "surplus goods").  This is not
>"complex footwork", nor a "confusing belief system".  This is simple and
>straightfoward logic, easily understood.  
>As it happens, I presented this brief summary of Marx's theory of
>surplus-value this week in a guest lecture for a politics course at Mount
>Holyoke, and the students understood very well the theory and its
>meaning.  I would even say that many of them were pretty fired up at the
>end, some because the theory made sense of their experiences as workers
>and others in order to defend capitalists and the fairness of
>capitalism.  But both sides understood clearly that this theory is not
>just dry mathematics.  If this theory is true, then workers in capitalism
>are exploited.  
>In other words, the clarion call came through loud and clear.
>Steve, if you see m as just an "unobservable multiplier", without any
>relation to labor, then you are missing the crucial theoretical content
>that Marx gave m:  the money-value produced per hour of labor, which in
>the surplus-labor-time portion of the working day, becomes
>the surplus-value of capitalists.
Dr. Steve Keen
Senior Lecturer
Economics & Finance
University of Western Sydney Macarthur
Building 11 Room 30,
Goldsmith Avenue, Campbelltown
PO Box 555 Campbelltown NSW 2560
s.keen@uws.edu.au 61 2 4620-3016 Fax 61 2 4626-6683
Home 02 9558-8018 Mobile 0409 716 088
Home Page: http://bus.macarthur.uws.edu.au/steve-keen/

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