[OPE-L:5240] Re: RE: : use-value as quantitative

From: Steve Keen (s.keen@uws.edu.au)
Date: Thu Mar 22 2001 - 14:51:50 EST

Hi Michael,

Before answering these queries, a quick thank you. I'm sorry to have lost 
my cool on a few occasions during this debate. I do appreciate being 
engaged on these issues, rather than being ignored. I'm sure you appreciate 
the feeling!
At 12:23 PM 3/22/01 +0000, you wrote:
>1. Clarification from Steve, please:
>Money and Labour-Power are not 'strict' commodities (cf Duncan's insightful
>recent post) - agreed. But why is Machinery not a strict commodity: produced
>by wage labour with a view to being sold for Money in a system of markets,
>so replete with use-value, exchange value and value?

On this issue, I'm extrapolating from my interpretation of Marx: there is 
no textual support for this proposition. But there is the quite explicit 
consideration of the related issue of how the exchange-value of an 
undeveloped mine is set (discussed further below). That discussion brings 
in the role which expectations of future profit play in setting the price a 
capitalist is willing to pay to secure ownership, which is a *subjective* 
estimation of a future quantity. This same issue arises in the case of 
machinery, which means that the price capitalists are willing to pay for 
machines will rise above value when expectations of future profit are high, 
and fall below it when expectations are dashed.

By the way, this was an argument I first saw in Minsky, not Marx, and I 
didn't accept it. So I did the stats on the Australian data... and found 
out that Minsky was right. The machinery price index (not capital assets 
now, but just machinery) was independent of the price index for consumables.

>2. Citing Marx, Steve says:
>The use-value of such things as unworked mines is a prospective
>exchange-value from its output.
>But (again, read my words ...) this doesn't speak to the commensurability of
>value and use-value (moments of Commodity):
>a) since an unworked mine is not a commodity (it is not produced by
>wage-labour), it has no use-value. (Which, of course, does not mean that it
>is not potentially 'use-ful')

NO. It has what Marx clearly and insightfully describes as a "possible 
use-value and hence the prospective exchange-value" of the minerals in it. 
This is a strong example of how perceiving use-value as quantitative in the 
M--C--M+ circuit makes sense, and makes it easy to interpret what is very 
difficult to comprehend otherwise. The capitalist doesn't give a shit about 
the intrinsic useful qualities "of coal or stone?", but he does give a shit 
about the hypothetical profits which could flow from selling them. So to 
reverse your argument, the minerals have a clear but speculative use-value, 
which is equal to their prospective exchange-value when mined--though that 
amount is beset by uncertainty.

This is something which is fundamental to modern Post Keynesian 
thought--the role of capitalist expectations in setting asset (and 
machinery) prices, the role of uncertainty in investment decisions, etc. 
But they have no theory of value from which to derive these 
observations--they simply take it as a given. Yet a theory of value which 
explains it resides in Marx.

>b) the prospective exchange-value of the output dug out of the mine by
>machine-assisted labour is indeed derived from the expenditure of that
>Perhaps it might help if we meditate upon the standard economics meaning of
>'value-added': it is indeed the value-added to the physical inputs by the
>human inputs (reflected in the non-property income of those human inputs).

Sure; but from this perspective, we simply have to express bemusement at 
the prices capitalists will on occasions pay for such entities as mines, 
other companies, etc. From the perspective I'm suggesting, it's part of the 
internal contradictions of capitalism.

>btw Am I wrong in recalling that whilst Rosdolsky does indeed stress the
>value/use-value dialectic, he does *not* argue for the quantifiability of
>use-value in value units?

No, you're right: the reasoning that use-value is quantitative in the 
M--C--M+ circuit is entirely mine.



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