[OPE-L:7036] Re: Marxist economics?

From: gerald_a_levy (gerald_a_levy@msn.com)
Date: Sun Apr 21 2002 - 22:37:39 EDT

Re Diego's [7035]:

> I agree with Simon (7028) and Alfredo (7029). <

And I agree with Simon, Alfredo, and Diego on the importance 
of answering Simon's questions (and those of others) concerning
"how contemporary capitalism works".  

Contra John H's [7034],  I  claim  that a comprehension of how 
contemporary capitalism works is _part of_ the process of changing 
the world: this is because the acts of comprehending capitalism 
(both abstractly and concretely) and the process of revolutionary 
self-awareness and praxis of the working class are tied together. 

A more concrete reply to John for the more concrete questions that
Simon asks would be:  workers ask about and are concerned about
(many of) these questions.  Should we only reply in generalities to them 
or must we develop a coherent answer to those questions?   I think the latter
is required if we are to actually confront the practice of bourgeois theory
and ideology. We must have *something more than*  a critique of 
bourgeois theory -- we must advance an *alternative* understanding 
that, when placed within an overall theory of capitalism,  makes *more* 
sense to these workers and is more accurate.  Viewed at
from that perspective, answering major questions concerning how
contemporary capitalism works is a major *political* task that can not
be ignored if Marxists expect to be have their perspectives taken seriously
by workers and peasants.

I also think that John's position is self-contradictory: in [7024] he agrees
with Harry Cleaver that the writings of mainstream economists should be 
studied and subjected to critique in order to (using Harry's expression)  
discover the "battle plans" of the bourgeoisie, yet in [7034] John claims 
that we have no business trying to discover (using Simon's words) "how
contemporary capitalism works".  Yet, surely John must agree that
what capital wants (as revealed in their "battle plans", etc.) is an
*aspect of* "how contemporary capitalism works".  Does this mean
that capital gets whatever it wants and plans for? Of course not. In any
struggle there is more than one side. Yet, what actually happens --
"how contemporary capitalism works" -- is a vital concern to all 
combatants in the class war.   From that perspective, it is a larger and
more meaningful question than  just identifying capital's plans and 

[I also find it ironic that many contemporary Marxists (not John or Harry)
who claim that we should not be Marxist economists (and instead should
limit ourselves to the critique of economics) are often also the ones who
believe that debates over the alleged (in)consistency of the quantitative
side of Marx's theory in _Capital_ are so important.  Excuse me for
believing that *from a political perspective*  Marxists in 2002 should be
*more* concerned with understanding how contemporary capitalism
works (and, yes, fighting against it and for the self-development of the
working class) than with a -- basically -- obscure Marxological textual 
question that is of concern not to the overwhelming majority of the
international working class (jeez ... how many workers have ever heard of 
the 'transformation problem'?) ... but to economists and a small number 
of intellectuals.  Here I'm not claiming that such debates are useless but
only -- if we want to talk about which issues are important from a political
perspective -- that comprehending "how contemporary capitalism works"
is a *far* more important and immediate political concern./End rant.]

Turning to some of Diego's comments (I'll reproduce the relevant questions of
Simon that DG is responding to):

>> 1. What determines the value of labour power and wages?>>
> 1. I think that in this respect the correct line is Marx-Rubin-Brody. Steeedman and others have contributed to a certain un-reading of Brody's book by labelling it as *neo-bortkiewiczian*. It is not of course. For instance, the problem of the reduction of heterogeneous labor to homogeneous labor and the value of all labor power is solved in it in pp. 85ss. <

To begin with, I don't really understand the "Rubin-Brody" connection.
What is the connection between the two?   In any event, I don't think that
the determination of the VLP and wages can be _reduced_ to the
"reduction problem".   There are many other variables that shape the
VLP  (remembering, especially, the 'socially necessary' in SNLT) and 
wages  (remembering the 'cultural and moral' component of the wage) as well, 
e.g.  the economic cycle and the demand for  labour-power,  
the size of the relative surplus population, class divisions and class struggle.  
The role of the state,  regional and international migration of  labour-power, 
the world market and transnational corporations,  trade  unions, solidarity, 
and militancy are all issues that must be comprehended as we attempt to 
develop an answer in terms of the  *concrete*  functioning  of contemporary 

<<2. What determines the value of money?>>
> 2. I'd like to discuss an idea. If the value of gold-money is determined like all other commodities's, <

This is a pretty big "if".  To begin with -- going back in history --
much of the world's gold supply was not produced under conditions
of capitalist production.  In more recent history, we have to consider
*rent* as well when considering the value of gold and how that
relates to the market price of gold.

> why not extend this idea to credit-money? The value of the commodity *credit money* --don't forget that commodities include goods and services-- is the labor society needs to reproduce the entire mass of the monetary assets (or liabilities) of the financial system. If workers in this sector do not perform their labor, it is not possible to reproduce the volume of the commodity credit-money needed by capitalism in order to survive.

But, *is* credit-money a commodity?   

> I think the problem here is that most people mix up the sphere of circulation (something which is needed in all branches of the capitalist economy) with the sphere of trade and finance (where circulation work is needed too: ads, payments and cash, etc., but where most of the work is also productive: it creates the credit-money, like work in the gold mines and mints creates gold-money; 

Workers in the mints are state employees, no?  If so, why shouldn't we
say that they are paid out of revenues rather than being productive of
surplus value?

> both generate surplus value when producing in capitalist firms and unproductive labor when selling the commodities produced) . Please, see the incisive analysis in this respect of the book of Nagels, Jacques (1974): Travail collectif et travail productif dans l'evolution de la pensee marxiste, Editions de l'Université de Bruxelles [Trabalho colectivo e trabalho produtivo na evolucao do pensamento marxista (2 vols.), Prelo, Lisboa, 1975].

Thanks here and elsewhere for the references. 

<<3. What is the predominant pattern today of technical progress? Has it 
changed? If so, why?
>>3. I don't think it has changed. Mechanization and capitalization of the production process is still inside the scope categorized by Marx as the *automatized system of machinery*. 

With increasing concentration and centralization of capital comes the 
likelihood that increasingly "mature" branches of production will be 
dominated by a few large firms that have the characteristics of being
oligopolies. Once a market is oligopolistic then firms can, under certain
circumstances, avoid technological changes in means of production. That
is a change.

The technical (tcc) and organic compositions of capital (occ) keep rising, and the value composition of capital (vcc) shows long fluctuations around its rising trend.  The relationship between occ and vcc is something like that existing between what conventional economists call *partial* and *general* equilibrium.

I don't really think that these subjects are best comprehended, even by
way of analogy,  by analogy to equilibrium processes.

<<4. Why has the rate of profit been rising in major capitalist economies 
since 1982 or so?
>>4. Well, the debate seems to be on the magnitude of this increase. I think that Anwar Shaikh's (for the USA) and Manuel Roman's (for Spain: see Roman, Manuel (1997): Growth and Stagnation in the Spanish Economy, London: Ivory, and above all Roman, Manuel (2002): Heterodox Views and Cycles in the Spanish Economy, Aldershot: Ashgate) new estimations of the adjusted (with long-term capacity utilization) rates of profit are very interesting. I would add that Marxian theory is not just about the behavior of the rate of profit but about how the declining trend in the rate of profit makes the mass of profits stagnate in a recurrent way, and how those fluctuations in the rate of growth of the mass of profit at its turn makes the rate of profit draw a fluctuating movement around its declining trend.

A question: do the above sources show empirical evidence for how 
the "mass of profits stagnate in a recurrent way"?  

<<5. (If you believe in the distinction) what are the consequences of the 
continuous steady rise in unproductive labour over the last third of the 20C?
>>5. See my point 2. I don't think unproductive labor shows a rising trend in relative terms. Quite the opposite. Empirical studies on this issue --like Shaikh & Tonak's, Moseley's or Dumenil's-- fails to take into account the fact that trade and finance are not unproductive labor per se. 

This is a point that should be discussed more  -- I think
that Michael W made a similar point on OPE-L some time

> The secular trend in capitalism is towards the rise in productive labor (it replaces domestic labor by market labor, one-person-laboring families by all-persons-laboring families, and so on). 

This statement should be able to be 'tested' empirically.

> This is what has permitted the continuous growth of accumulation of capital. 

This is a very large claim that would would have to be discussed 
further before I can comment.

> However, a second aspect of the problem is the increase in surplus-value-producing labor which produces surplus-value by means of commodities which are of no use for most people, at least from a Marxian point of view (arms, money, churches, luxuries, publicity, ownership vigilance, etc.). Growth has not probably been checked by this kind of labor (inasmuch as surplus value has kept growing) but the latter have increased the limits to the growth in the means of consumption which are really useful to most people.

Yet,  hasn't there been nevertheless a growth in the
means of consumption that have a use-value for most

As for the questions -- and Diego's responses -- I agree 
that we should have further *extended* discussions on them. 

That is  e.g. unless others think that understanding the economic 
mechanisms of imperialism aren't important?  Oh, and yes, John:  
comprehending imperialism ("how imperialism works") is  clearly 
related to the struggle against imperialism.  

I'll give some more thought to Diego's comments on financial 
derivatives and exchange rate movements.  There was an awful lot
of substance in his post and it is hard to discuss so many topics at
once *and* I'm getting tired so I'll stop now.

In solidarity, Jerry

<<7. What are the economic mechanisms of imperialism?>>7. I think we should reject Lenin's concept of imperialism as a stage in the development of capitalism. This idea is in fact a bourgeois one (I mean its roots are in the bourgeois literature). There is no new stage of capitalism due to monopolies. I look at my Spanish Dictionary to read: "Imperialimo: tendencia a imponer la dominacion del Estado propio sobre otro u otros, en el aspecto politico o economico". I think it is much more accurate than Lenin's definition. Of course, imperialism has always existed. The specific capitalist imperialism has existed throughout the entire life of capitalism. I would follow Engels's suggestion (against Dühring and other socialists): violence has its roots in the economic power to produce knives (Robinson against Viernes-Friday), not in the use of knives itself. The violence we should be interested in is first of all the violence already included in the developed existence of commodities, since they presuppose money, money presupposes the State, and the State presupposes a class society and therefore the violent domination of a majority by a minority of people.
<8. If finance is an unproductive sector, why is it so predominant?>
8. See my points 2 and 5: Finance is also a productive sector, but it contains, of course, like all others do, one segment of unproductive labor.
<<9. How do financial derivatives and associated products connect with value 
9. This relates to the more general problem, I think, of how do the standard *net actualized value* of all assets (financial or not) --one value which looks at the future-- with labor value. There is a book (Martinez Marzoa, Felipe (1983): La filosofía de 'El Capital', Taurus, Madrid) which is in the line Marx-Rubin-Brody mentioned above and poses this question as the *unresolved diacronic* aspect of the labor theory of value.
<<10. What determines exchange rate movements?>>
10. Again, I think we have a good approach to the understanding of the *long-term trend* of exchange rates (two Spanish dissertations, working on Shaikh's lines, should be added to the literature on this topic: Mejorado, Ascension (1996): Los determinantes micro y macroeconomicos del deficit comercial espanol (1954-1994), Tesis Doctoral, Madrid: Universidad Complutense. And Cabrera, Oscar (2002): La competencia internacional: factores explicativos de la competitividad industrial en los paises del mercado comun centroamericano, Tesis doctoral, Universidad de Sevilla). Of course, exchange rates are a special case of relative prices, i.e. relative values, so that their movement is determined by the movement in the relative quantities of labor needed in two different countries in order for each of them to reproduce the same basket of commodities (representing the composition of the worldy-traded basket of commodities).

This archive was generated by hypermail 2b30 : Thu May 02 2002 - 00:00:09 EDT