[OPE-L:7437] The putting-out system

From: Gil Skillman (gskillman@mail.wesleyan.edu)
Date: Sun Jul 21 2002 - 15:00:08 EDT

Continuing the exchange with Rakesh on the putting-out system.  Thank you, 
Rakesh, this topic is of central interest to me.

>>>  production.
>>Viewing the putting-out system through the lens of Marx's analytical 
>>categories, I understand the putting-out system to be an instance of the 
>>circuit of merchant's capital that involves the commodification of labor 
>>power but *not* the subsumption of labor under capital, in even the 
>>formal sense.  Insofar a this system is a form of surplus value 
>>production, then subsumption is not required for capitalist exploitation, 
>>or at least wasn't required under the class conditions obtaining in that era.
>But how is labor power commodified in the putting out system? The 
>craftsman does not alienate labor power to the merchant.

The funny thing about this point is that I would have agreed with you 
entirely a year ago, and actually for my purposes in the present discussion 
it doesn't much matter.  In fact, I maintained the position you give here 
in two earlier articles on this and related issues, arguing in addition 
that the relevant exchange in the putting out system was for specific labor 
*services* rather than simply labor *power,*, i.e. simply the capacity to 
expend labor.

But a long argument with a more classically Marxist friend has convinced me 
that, from Marx's perspective, this is a false, or at least unnecessary 
distinction.  My reasoning in making the distinction was based on the fact 
that putting-out workers were paid by the piece--that is, for the output 
actually produced--rather than for their time.  But in K.I Ch. 21 and 
elsewhere Marx insists that the distinction between compensation via piece 
rates and via time wages is apparent rather than real.  And from the 
standpoint of *Marxian* analytical categories (as opposed, say, to the 
categories of mainstream incentive theory), I now think that's right, or at 
least easier to defend on standard Marxian grounds than my earlier position.

Here's a test case:  would the *formal* relationship between the merchant 
and the worker in the putting-out system change if the latter were paid by 
wages rather than piece rates?  If so, why, in light of Marx's comments 
about the superficiality of the difference between the two forms of 
compensation? In other words, what's included in the C in the specific form 
of the circuit M-C-M' corresponding to the historical putting-out system?

>>If this is an accurate summary, it prompts two questions:  first, what 
>>made it possible for capitalist exploitation to occur without even the 
>>formal subsumption of labor under capital, and second, would it be 
>>possible for surplus value to exist--if perhaps not at the same magnitude 
>>as in the circuit of industrial capital characterized by wage labor and 
>>capitalist production--on the basis of putting-out production under 
>>modern class conditions?
>Well to the latter question I would say no because putting out production 
>will tend not to be economically competitive vis a vis large scale, 
>cooperative enterprise.

This answer is certainly in keeping with Marx's K.I analysis of the 
historical development of capitalist production.  But in the hypothetical 
mode we're pursuing here, it seems to beg two questions.  First, granting 
the hypothesis that economic competitiveness requires large-scale, 
cooperative enterprise, why *necessarily* couldn't putting-out be organized 
on a large-scale, cooperative basis?  To take a modern example, instead of 
having their own bank, why couldn't the (often large-scale) Mondragon 
cooperatives proceed on the basis of having raw materials (and perhaps even 
some constant capital goods) supplied by external capital suppliers, and 
being paid per unit for the resulting output (putting aside the question of 
whether Mondragon workers would *want* to proceed in that manner)?

But second, evidently post-Fordist production does not universally require 
large-scale operations. There are in fact lots and lots of small firms out 
there, and industries populated primarily by small firms.  Even given a 
compelling answer to the first question, could the putting-out system 
compete in cases where large scale was not required?

In addressing the second half of my original question, I don't want to lose 
track of the first half.  As Marx confirms, the putting-out version of the 
circuit of merchant capital resulted in surplus value extraction, and thus 
capitalist exploitation, without even the formal subsumption of labor under 
capital.  What made that possible?

>Let me add another question. Is free wage labor necessary for the 
>production of surplus value?

If "free" is interpreted in the second aspect of Marx's "double sense" 
(i.e., free of owning the means of production), this is clearly the general 
question prompted by historical cases such as the putting-out system.  As a 
historical matter, Marx asserts repeatedly that the answer is no: the 
circuits of usury and merchant capital that financed production of new 
value were evidently not based on free wage labor, and yet yielded surplus 
value.  An example of a contemporary version of this question:  could a 
capitalist make money by lending money to support the production activities 
of a worker-owned firm?  Both theory and evidence suggest the answer to 
this is yes, even granting that the rate of exploitation is less than might 
be achieved through direct control of production by the capitalist.

If "free" is meant in the first of Marx's "double sense," (i.e., free to 
sell one's own labor power), as suggested by your following remarks, I 
would say the answer is clearly yes, since Marx defines surplus value as 
the increment (M' - M) emerging from some circuit of capital M-C-M' subject 
to two conditions:

(a) (Production):  New value must be produced subsequent to, and dependent 
on, the advance of the initial M;

(b) (Realization):  a portion of the value newly produced must be 
appropriated via the circuit by someone--i.e., the capitalist--other than 
the producer of that value.

Nothing in this definition is contradicted by the use of slave labor.  To 
the contrary, the purchase of slaves would be part of the initial exchange 
M-C.  Then the slaves would be *directly* coerced in production to yield 
C', which is then sold to yield M'.

>In The Origins of Capitalism (New York: Monthly Review, 1999): 70-71 Ellen 
>Wood simply asserts at one point that only when workers are dispossessed 
>and thus dependent on money wages and the market for their subsistence 
>goods does the market begin to operate coercively by compelling 
>competition, accumulation and profit maximization. However, Wood provides 
>no clear reason  why only with the emergence of free wage labor and the 
>consequent dependence of direct producers on the market for their 
>subsistence does the market cease to provide only opportunities for 
>exchange and trade but become the kind of coercive institution which is 
>uniquely capitalist

I agree that the assertion is insufficient in light of both the historical 
record and the lack of a compelling theoretical justification for her 
categorical position.

>(While Wood makes no use of Marx's value theoretic reasoning,  John Weeks 
>however does make  a Marxian argument in his brilliant Capital and 
>Exploitation, pp. 39-40; however, Weeks does not argue with Nicky and 
>Jerry that surplus value can only be produced by free wage labor but 
>rather that value only regulates production when free wage labor is 
>generalized and the means of subsistence thereby monetized--Nicky and 
>Jerry would have been on stronger grounds if they had pursued the latter 
>argument, in my opinion, though as I tried to show Marx himself rejected 
>it for very good reasons in the case of modern large scale plantation 
>slavery in which the means of production and much subsistence were in fact 
>largely monetized despite the formal unfreedom of the direct producers and 
>[the law of] value did more or less regulate production as evidenced by 
>the shifting of slaves to the most profitable activity and the bankruptcy 
>of plantations which could not maintain profitability).

( I would also question the coherent sense in which "value regulates 
production" in *any* case, but putting that aside, I agree with the sense 
of your conclusion.)

>At any rate,  Wood proceeds to focus not on free workers at all (this 
>seems to be an implicit concession to Albritton who has underlined that 
>early agriculture workers were often servants in husbandry) but on farmers 
>or tenants who had to produce cost effectively or capitalistically in 
>order to ensure the renewal of their leases. That is, Wood's actual 
>argument does not in fact demonstrate a link between free wage labor and 
>characteristically capitalist dynamics but between competitive 
>landlord/tenant relations and dynamic productivity growth. And indeed Wood 
>comes to realize that this is the argument which she has presented:
>Šit is important to keep in mind that competitive pressures, and the new 
>'laws of motion' which went with them, depended in the first instance not 
>on the existence of a mass proletariat but on the existence of 
>market-dependent tenant-producers. Wage laborers, and especially those who 
>depended entirely on wages for their livelihood and not just for seasonal 
>supplements (the kind of seasonal and supplementary wage labor that has 
>existed since ancient times in peasant societies) remained very much a 
>minority in seventeenth century EnglandŠIn other words, the specific 
>dynamics of capitalism were already in place in English agriculture before 
>the proletarianization of the work force. (95)
>Indeed! Yet if the work force did not have to be free wage proletarians in 
>order to labor in capitalist agriculture enterprise, then why could have 
>slave plantations also not been capitalist enterprises?

Good point, I agree.

>Wood thus does not present a case against the capitalist nature of that 
>peculiar institution which depended on the unfreest of labor and thus does 
>not justify the almost total excision of the barbaric trade and 
>institution from her parochial history of early capitalism (save one 
>sentence with no mention of Inikori, Solow, Blackburn and others) and the 
>apartheid division she in effect maintains between English agriculture and 
>plantation agriculture in theorizing the origins of capitalism.
>All the best, Rakesh

We thus seem to have two historical conundrums, rather than one:  as a 
historical matter, the existence of surplus value does not seem to require 
that workers are free in *either* aspect of Marx's "double sense."


This archive was generated by hypermail 2b30 : Fri Aug 02 2002 - 00:00:04 EDT