[OPE-L:4610] islands

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Tue Dec 05 2000 - 00:40:08 EST

re 4609

>Rakesh, you ask
>>What is the sleight of hand here? I want to take your criticism
>>seriously because it seems to go to the core of Marx's argument, but
>>I simply cannot understand the point you make here. Marx  bases his
>>thought experiment on the institutional set up of a developed
>>capitalist economy in which labor is indeed performed by those who
>>have sold their labor power to the few who own means of production.
>>As Marx says, he simply confines himself to this fact theoretically,
>>just as the capitalist is confined by it practically (p.273).
>Two levels of response:
>First, Marx is (unintentionally) imposing a rather stark analytical double
>standard here.  If it were appropriate to "confine oneself theoretically"
>to facts that capitalists are "confined by...practically", then Marx would
>need to "confine himself theoretically" to a world of price-value
>disparities, since there is no capitalist economy that does not feature
>these (in contrast, workers *do* sometimes lease capital goods, and pay
>surplus value in the form of capital rentals, in real-world capitalist
>economies--more on that point below).


You are missing Marx's claim:  price value disparities cancel 
themselves out in circulation, so we may as well suppose price equals 
or is proportional to value in each individual case. He makes clear 
that prices are not actually proportional to values.
>But of course Marx doesn't do this:  he insists, and makes great efforts to
>establish, that price-value disparities are "incidental" to the existence
>of surplus value, and thus dismissable.  As you know I dispute the validity
>of his arguments on this point, but let's accept his conclusion for the
>moment.  The methodological claim Marx is making is that for the purpose of
>accounting for surplus value, one can and should abstract from phenomena
>which are "incidental" to its existence.  Very well, so far as any concrete
>analysis Marx has offered through Chapter 6, it is *incidental* to the
>existence of surplus value whether workers gain access to the means of
>production by selling their labor power or by leasing capital goods.

It is not incidental that commodities are produced by means of wage 
labor; this is the basic institutional feature of a capitalist 
economy, not credit islands. Marx is clear that those commodities do 
not exchange at value, but thinks that the price value disparities in 
circulation will tend to cancel themselves out, so that it will 
simplify his analysis of the basic production relation if he supposes 
that each commodity circulates at value.

>  So if
>it is valid, Marx's conclusion should hold in either case.  *But it
>doesn't*, as I've shown:  price-value disparities are a *necessary*
>condition for the existence of surplus value once one abstracts from the
>"incidental" fact that workers gain access to the means of production by
>selling their labor power as a commodity.

I am just stunned that you think this is an incidental fact, instead 
of the basic datum on which any theory of capitalist production must 

>Thus Marx's account faces a rather fundamental methodological dilemma:  if
>one must proceed from actual capitalist conditions, as Marx asserts in Ch.
>6, then one must accept actual price-value disparities as a starting point
>for the analysis.

No Marx begins with the production relation; this is what volume one 
is about. He assumes that commodities circulate at value because in 
the aggregate price-value discrepancies will tend to cancel 
themselves out.

>Once one allows price-value disparities, then there is no logical necessity
>to consider the purchase of labor power at its value (and its subsequent
>subsumption in capitalist production) as the basis for explaining surplus
>value, and his argument at the beginning of Chapter 6 goes down the tubes.

But reality does not go down the tubes. Workers find themselves on 
the labor market island, not on the fantasy credit island.

>Alternatively, if it's legitimate to abstract from empirical conditions
>which are "incidental" to the existence of surplus value, as Marx asserts
>in Chapter 5, then we may abstract from the real-world fact that workers
>sell their labor power as a commodity, because Marx establishes no grounds
>whatsoever for believing this form of the capital-labor exchange
>relationship is intrinsic to capitalism.

It's simply the screamingly obvious practical fact with which he 
begins his analysis.

>  But in that case, Marx's argument
>must work *whether or not* workers gain access to the means of production
>by selling their labor power as a commodity.  And, again, *it doesn't*.  So
>either way his analysis is invalid.
>[And on the empirical horn of the dilemma, I note that workers *do* often
>lease or otherwise borrow capital goods, even if this isn't the typical
>case.  Is there any doubt that the rent or interest charged in these cases
>corresponds to surplus value, so long as the capital goods are used in the
>production of new value, and the rent or interest payments are made out of
>this newly created value?]

It is true that not all laboring activity is carried out by 
proletarians who have sold their labor power; it's just almost 
perfectly true.

>But second, Marx's account of surplus value is worse than just invalid:
>it's essentially misleading about the systemic basis of surplus value. On
>one hand, it obscures the fact that surplus value requires capital
>scarcity, which is generically associated with (at least one) price-value

I leave this aside. By capital scarcity are you referring to the fact 
that capital goods are not as plentiful as oxygen.

>  On the other, it suggests a spurious connection between surplus
>value and the fact that capitalists purchase labor power as a commodity and
>extract surplus labor from workers in the context of capitalist controlled
>production.   The fact that this is so has nothing central to do with the
>connections among prices, values, and surplus value.  For example, if
>capitalists could extract the maximum feasible levels of surplus labor from
>workers simply by contractual means (say through capital lending or
>leasing, or proto-industrial forms like the putting-out system) and could
>thus forego the hassle of overseeing the production process, surely they
>would do so in an instant, no matter what the consequences for explaining
>surplus value on the basis of PVE.

Yes, Marx seems to have made the mistake of attempting to understand 
theoretically what he found to be the case in developed capitalist 
societies--a labor market into which the vast majority of humanity 
was being dumped.

>>From my understanding of what a coherent account of surplus value requires,
>the above constitutes a fundamental indictment.  I accept the possibility
>that this critique might not be so compelling from other vantage points.


>But remember, I was criticizing Andrew's specific claim that Marx had *no*
>basis for allowing price-value disparities once variations in OCC were
>dismissed.  This doesn't follow.

Andrew was saying that Marx realized from the very beginning that 
while value has no other representation in money price, money price 
necessarily misrepresents value. So Andrew was rebutting the 
importance I was giving to the assumption.

>  >Maybe
>>on the fantasy credit island workers could just as easily lease means
>>of production. But this is not in fact the institutional set of a
>>capitalist economy (with very  few exceptions of course).
>And maybe on some other fantasy island, commodities exchange exactly at
>their respective values.  But this is not evidently the case for *any*
>capitalist economy.  Any justification you give for studying *this* fantasy
>island, I can legitimately invoke for focusing on the "fantasy credit island".

In order to focus on the basic production relation in capitalism--the 
topic of volume one--Marx makes various assumptions about circulation 
(exchange at value), money (it's constant), credit (none of it), 
world trade (eliminated). Marx is studying a real institutional 
feature, not a fantasy model of a credit island. But he is studying 
that real institutional feature in abstraction and without 

All the best, Rakesh

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