[OPE-L] More about exploitation

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Sat Jun 23 2007 - 04:55:20 EDT

I don't think I haven't explained the *creation* of surplus-value from the
perspective of society as a whole, I'm merely saying that once a surplus
product has been produced (whether through exploitation or not),
*additional* exploitation is made possible in its circulation, distribution
and consumption, depending on the (unequal) bargaining power of market
actors and the amount of unequal exchange that occurs.

Capital originates from the activities of "buying in order to sell" and
"lending resources for a profit", irrespective of whether that profit takes
the form of mercantile profit, interest, rent or fees. A possibility of
economic exploitation originates in that relatively simple trading relation
(in Dutch language, an "exploitatie" is just another legal word for a
business). Marx is only talking about the ultimate basis on which all other
exploitation occurs, not all exploitation there is.

In modern society, a worker might create double or treble the value of his
wage in production, but in buying goods and services, up to 40% of his gross
wage expenditure might represent direct and indirect  tax plus profit
imposts (in the Netherlands, a normal personal income tax rate for wage
earners is around 25-30%, the general VAT tax is 19%, and the total profit
component in wage-goods purchased could be anywhere from 10% to 40% or so).

In Marxist economics this is all conveniently forgotten, because the worker
is regarded only as producer, and not as consumer or market actor in his own
right (apart from seller of labour-power). Yet the value of labour-power may
be eroded not just by price inflation, but also by additional tax and profit
imposts on consumer spending.

When Marx assumes equal exchange in his discussion of trading relations, he
is doing that, because he is only interested in the *regulating* values for
producer's outputs underlying the market, and he is trying to show that
exploitation in production can occur even on the assumption of equal
exchange. He never says however that actual prices (including the price of
labour-power) will necessarily reflect equal exchange. Indeed he
acknowledges that labour-power may be sold at a price which
is above or below its value. Throughout his exposition, he
acknowledges market prices will fluctuate incessantly, but he mostly assumes
market balance. Yet the imbalances (disequilibrium) between supply and
demand are precisely the life of the market, and that creates fresh
possibilities for exploitation. Max Weber consequently talks about "market
power", but Marx's question is what constitutes that market power, and he
seeks the answer in private property relations and production relations that
exist *already prior to market transactions*, i.e. prior to the buying and
selling, and irrespective of price fluctuations.

In modern economics, if unfair trading practices occur, it must be that
there is an impediment to freely competitive markets; and if those markets
or market access could be open, all would be fair. Fair competition is said
to be guaranteed through:

- free access for all to the market place, and
- a legal and security framework which protects traders from being cheated
and robbed.

In that case, the concept of "unequal exchange" can only refer to unfair
trading practices, such as:

- not getting an equal opportunity of access to the market,
- illegal trading practices, ranging from plunder, robbery and theft, to
extortion or price mark-ups which are against the law.

By implication, unequal exchange is not itself viewed here as an economic
process, because if open market access and market security exist, then trade
is equal and fair by definition - it is equal because everybody has the same
access to the market, and it is fair because just laws and their enforcement
ensure that this is so. Another way of saying this is that if citizens
legally have equal rights and equal opportunity, there cannot be any unequal
exchange, except if citizens behave in immoral ways or if they consciously
regard an unequal exchange as acceptable.

The Analytical Marxist John Roemer challenges what he calls the "fundamental
Marxian theorem" that the existence of surplus labour is the necessary and
sufficient condition for profits. He proves that this theorem is logically
false. However, Marx himself never argued that surplus labour was a
sufficient condition for profits, only an ultimate necessary condition. Five
reasons were that:

- profit in a capitalist operation was "ultimately" just a financial claim
to products and labour services made by those who did not themselves produce
those products and services, in virtue of their ownership of private
property (capital assets).

- profits could be made purely in trading processes, which themselves could
be far removed in space and time from the co-operative labour which those
profits ultimately presupposed (especially in the case of used assets as
contrasted with newly produced assets).

- surplus labour could be performed, without this leading to any profits at
all, because e.g. the products of that labour failed to be sold.

- profits could be made without any labour being involved, such as when a
piece of unimproved land is sold for a profit.

- profits could be made by a self-employed operator who did not perform
surplus labour for somebody else, nor necessarily appropriated surplus
labour from anywhere else.

All that Marx really argued was that surplus labour was a necessary feature
of the capitalist mode of production as a general social condition. If that
surplus labour did not exist, other people could not appropriate that
surplus labour or its products simply through their ownership of property.

The predominance of the capitalist mode of production is at most
200-250 years old. But private capital existed on a large scale for
300 years, and more sporadically for thousands of years before
that. We simply cannot explain the historical origin and growth of
capital without reference to unequal exchange in trading relations.
In so doing, we must distinguish between the original
accumulation of money capital from mercantile and lending
operations, and the original accumulation of industrial
(production) capital. For Marxists, there exists only the
original accumulation of productive capital. But for
empirical historians, there exists also the original
accumulation of money-capital, rooted in unequal


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