[OPE-L:5164] Re: variable capital and circulation workers

From: Steve Keen (s.keen@uws.edu.au)
Date: Wed Mar 14 2001 - 07:53:40 EST

Some good points Jerry:

>The problem (Howard is right!) is that the pesky
>"economist"  *does* refer to variable capital
>employed by commercial capitalists in Vol.
>3, Ch. 17.  In referring to this "variable
>capital" he again notes repeatedly that these
>workers "do not add any extra value"  and that
>"his labour is not value-creating labour".
>As far as I can figure, there are only two ways
>out of this *m-e-s-s*.  One way would be to claim
>that labor which helps realize surplus-value is
>productive labor and is paid out of variable capital.
>This is a reasonable position perhaps, but I don't
>think it is consistent with what this "economist"
>wrote elsewhere. The only other way out is
>to claim that even though there are similarities
>between commercial workers and workers who
>are productive of surplus-value, they are
>unproductive of surplus-value and that it was
>a mistake for that very fallible and human
>"economist" to refer to "unpaid labour" and
>"variable capital" in the context of the drafts
>for what later became under F.E.'s editorship
>Volume 3. I think that this later position is the
>most consistent with the rest of his theory.

Another way out--the one I use--is to argue that Marx's theory of value had 
several levels, only one of which is strictly limited to the issue of the 
production of surplus value (though it is the major one: workers employed 
in commodity production).

When you get to other levels of the capitalist system--finance, retail, 
etc.--then you are into areas where workers can generate a profit for their 
employers, but this profit isn't produced by generating commodities of a 
greater value than their inputs, where that value is determined by 
labour-time equivalents.

In these realms, especially in finance, you have a partial inversion of the 
use-value/exchange-value logic which I argue underpins Marx's explanation 
of the origin of surplus value in commodity production, because strictly 
speaking what is "produced" in these sectors are not truly commodities. I 
define (and I believe Marx implicitly defined) commodities to be products 
which are produced for profit by a manufacturing process involving the 
inputs of other commodities and labour. On this basis, labour itself is 
*not* a commodity, nor--in this context--is finance, and arguably neither 
are "service" industries like retailing.

The rule for commodities is that their exchange value is determined 
entirely by the value of their inputs, while their use-value is irrelevant 
to the determination of their exchange-value. The rule for 
quasi-commodities (in varying degrees) is that their use-value *can* play a 
role in determining their exchange-value. Marx makes this obliquely clear 
in his discussion of how the price of borrowed money is determined, and 
also the value of minerals *in situ*, when clearly no labour has yet been 
expended on them:

"Ricardo never uses the word value for utility or usefulness or "value in 
use". Does he therefore mean to say that the "compensation" is paid to the 
owner of the quarries and coalmines for the "value" the coal and stone have 
before they are removed from the quarry and the mine--in their original 
state? Then he invalidates his entire doctrine of value. Or does value mean 
here, as it must do, the possible use-value and hence the prospective 
exchange-value of coal or stone?" (Marx 1861 Part II, p. 249)

"What, now, does the industrial capitalist pay, and what is, therefore, the 
price of the loaned capital?... What the buyer of an ordinary commodity, 
buys is its use-value; what he pays for is its value. What the borrower of 
money buys is likewise its use-value as capital; but what does he pay for? 
Surely not its price, or value, as in the case of ordinary commodities." 
(Marx 1894,  p. 352.)

Some might see this as a weakness to (my interpretation of!) Marx's value 
theory. I see it as a strength: the theory is adaptable to different levels 
within capitalism, but still dialectically consistent.

Of course, I also argue that this interpretation contradicts the labour 
theory of value, but maybe that's just me being a class traitor again... -:)


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