Re: [OPE-L] Proposition #5

From: Jerry Levy (Gerald_A_Levy@MSN.COM)
Date: Mon Mar 12 2007 - 13:16:31 EDT

Hi Ajit:

Let's stick with this proposition for the moment and see
if we can agree.

> How is it crystal clear that "the wealth of
> capitalists is created by the labor of wage-workers"?
> First of all, you haven't even defined what you mean
> by *wealth of the capitalists*.

In the model I suggested,  there were only two classes:
capitalists (who have a monopoly on the ownership and
control of the means of production) and wage-workers
(the direct producers who sell labor power to capitalists in
exchange for a money wage).

If there is one class which does not directly produce goods
but rather survives off of the proceeds produced by another
class,  then doesn't it necessarily also follows that there  is a
surplus product?  Capitalists don't live on air, after all.

Since capitalists own and control the means of production
and are legally entitled to the commodity product, let's define the
"wealth of the capitalists" as the monetary worth of  the total product
minus the monetary worth of  necessary consumption (2).
What capitalists decide to do with the money required for the
replacement of the means of production (1) and monetary
worth of the surplus product (3) is another question.  If they wish to
maintain the same or greater scale in the next round of production,
then this implies something in terms of what they do with (1)
and (3) -- as we shall see.

> All we have here is
> that you have the *money value of surplus product*
> (since implicitly you already know the prices) and the
> knowledge that all the things were produced by using a
> lot of machines and things and labor. That's all.

You're basically correct: what we have is that commodities
were produced by lots of wage-workers who utilized means
of production. The class relationship which has been outlined
tells us that the total product minus the amount paid to wage-
workers (which is used by wage-workers to purchase the
commodities required to reproduce themselves at their customary
standard of living) becomes the property of the capitalist class.
If you were to say that this is an obvious 'result' given the
assumptions made, then I'd agree with you.

I suppose the claims which I have made could be criticized for
being too dependent on axioms.  This is a valid criticism but I
think misses the very limited purpose of the interventions I am
making: I am  aware that there are over-simplifications being
made which need to be flushed out in a more developed
explanation.   So, if you were to say that the 'results' presented
depend on the assumptions and stipulations made then I'd have to
agree with you.

> But you have already explained that the total product
> is produced by the use of machines, raw materials

(recall your suggestion that there is no fixed capital)

> and labor.

There is WAGE-labor. This is crucial for the relationships I am
trying to explain.

> You assume that prices of the goods produced
> are known, so you multiply the gross outputs of all
> the goods produced with their prices and arrive at the
> *money measure* of the gross output. From which you
> subtract the *money measure* of raw materials and
> depreciation of machines plus the money value of
> commodities purchased by the workers out of their
> given money wages. What is left is the *surplus
> product* (so the surplus product was taken for granted
> in conceiveing the total output) and if you multiply
> them with their known prices and add them up, you get
> *money measure* of the surplus product.

Exactly. You understood what I have said correctly.

> So what is the meaning of your question?

So far I have only claimed that there is a surplus product
produced by wage-workers (yes, working with means of
production) which is appropriated by capitalists and that
there is a connection between this and labor time, commodities,
and money.  (i.e. labor time by wage-workers is expended
producing the total and surplus products;  the total and
surplus products takes the form of commodities and all  that
entails;  money is used to measure the exchange rates of
commodities). These subjects need to be specified more for
us to understand more about this process.

In solidarity, Jerry

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