[OPE-L:7482] Re: Buying up and monopsony

From: Gil Skillman (gskillman@mail.wesleyan.edu)
Date: Wed Jul 31 2002 - 16:41:49 EDT

John, you write

>Gil, thanks for stressing the narrowness of the monopsony explanation. 
>However, what I wrote about the buyer-up was not intended to support such 
>an approach.

Two passages in your initial post prompted me to raise the issue of monopsony:


"However, the diversification of demand and consequently of production, 
along with the need to produce not for a local but for various distant 
markets, historically made the producer increasingly dependent on one 
merchant in particular, who would supply him with raw materials and become 
thus BUYER-UP of the producer's total output."

Question:  what can "increasingly dependent on one merchant in particular" 
mean, if not that the merchant increasingly gains monopsony power vis-a-vis 
the producer?  In a competitive market, *whether or not* the merchant 
capitalist exercises control over the production process, no producer would 
be dependent on any "one merchant in particular", insofar as he or she 
could always elect to change suppliers.


"In this way the buyer-up in effect acquires control over the production 
process of the individual producers, I.E. OF THEIR MEANS OF PRODUCTION. It 
is he who decides the extent of output and its degree of diversification as 
well as establishing the division of labor among the separate producers who 
are under his control, according to productivity criteria which he sets and 
changes in demand which he follows. The buyer-up can now lower the prices 
of the commodities he purchases (buys up) from direct producers to a level 
which yields for the producer an income not higher than a worker's wage."

The ability to raise or lower the price paid for the producers' labor is a 
characteristic of monopsony power, not of the control of the production 
process per se. In a purely competitive world, with or without control of 
the production process by capitalists, attempts by any one capitalist to 
lower the compensation paid to input suppliers would lead to a wholesale 
exodus to otherwise identical competitors paying the market rate.  This 
passage seems to me symptomatic of the confusion of logical categories I 
spoke of in my previous post.  Control of the production process, in the 
sense of directing and defining it, does not of itself imply control over 
input prices, and the presence or absence of monopsony power does not bear 
on capitalists' desire to control the production process.

>I consider the buyer-up to be a hybrid historical figure who personifies 
>the process of transition from handicraft to the developed capitalist 
>manufacture. What is important according to my view, is not only the 
>"monopsony relation" but also the division of labour imposed to the direct 
>producers by the buyer up, the diversification of production on the 
>buyer-up's command, the supply of raw materials to these direct producers, 
>the emergence of the "middleman" who connects the local producers in the 
>different regions of a dominion with the large scale buyer-up (seated in 
>the export port or the commercial city) and who also "subjects" these 
>producers to the new (capitalist) social relations not only economically, 
>but also politically and ideologically.

I agree that the buyer-up is involved with these things, but "subjects" 
producers by what power?  Monopsony?  Or something else?  Why can't 
producers ignore or rebuff the efforts of any one buyer-up capitalist to 
"subject" them to these relations?

>In the regions of the Ottoman empire where the Greek bourgeoisie-national 
>revolution of 1821 broke out, this process had been going on for several 
>decades, transforming the "ancien regime" not only economically (buyer-up, 
>wage labour: manufactories, big merchant and ship-owner enterprises), but 
>also politically (forms of political representation, dissolution of the 
>asiatic-communal system of the empire, formation of revolutionary 
>organisations) and ideologically (enlightenment and national idea). The 
>middleman of the new era emerged out of the dignitary of the "ancien regime".

>Focusing on the economic level again, it is these overall relations which 
>transform the artisans or farmers to a hybrid or informal form of 
>piece-"wage labourer and proletarian", as Marx says: The transition from 
>the feudal mode of production takes place in two different ways. The 
>producer may become merchant and capitalist (...) Alternatively, however, 
>the merchant may take direct control of production himself (...) This 
>method (...) without revolutionizing the mode of production, it simply 
>worsens the conditions of the direct producers, transforms them into 
>mere  wage-labourers and proletarians (...) appropriating their surplus 
>labour on the basis of the old mode of production (...) The merchant is 
>the real capitalist and pockets the greater part of the surplus value 
>(Marx 1991, [Kiii, Penguin edition] pp. 452-53).

Yes, I agree (having quoted this passage often myself).  The issue I'm 
raising concerns the logic of this transition.  I want to argue that this 
reflects a shift in class conditions having to do with the progressive 
expropriation of workers, *connected with* the inability of capitalists 
(competitive or monopsonistic) to compel desired levels and arrays of work 
effort solely by contractual means.


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