[OPE-L] Equality versus equivalence

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Tue Jul 17 2007 - 16:39:57 EDT

Ajit's original point was that if we say that:

X amount of commodity A exchanges (trades for, or is exchangeable) for Y
amount of commodity B

then this gives no grounds for saying that:

X amount of commodity A = Y amount of commodity B

I replied to this Ajit's proposition is false in one way, and true in
another. It is false, insofar as the two commodity bundles are indeed
practically "equated" in the trading ratio, which is the ground for
asserting their equivalence in the first instance. You then have to explain
what that equivalence consists in, and why it exists, and that is Marx's
point. But Ajit's proposition is true, insofar as the insertion of an "="
sign can be meaningful and valid, only if we can specify IN WHAT SENSE the
two commodity bundles are equal or equivalent. But to specify that sense of
equivalence or equality, there are various logical possibilities, giving
rise to different value theories:

1) The commodity bundles are in some way qualitatively equal to each other
2) The commodity bundles are in some way quantitatively equivalent to each
3) The commodity bundles are in some way qualitatively equal AND in some way
quantitatively equivalent
4) Their quantitative equivalence is expressed in terms of equal quantities
of another (third or external) yardstick of measurement
5) Their qualitative equality is expressed in terms of some other (third)
criterion in terms of which they are qualitatively the same
6) An external yardstick exists which expresses both their qualitative and
quantitative equivalence at the same time

Ajit's argument, I assume, is that:

(a) because we can moot all kinds of answers here to the problem of the
sense in which the commodity bundles are "equal", there is no logical proof
possible at all that the equivalence or equality is constituted by
labour-value and only labour-value
(b) many of these 6 possibilities for specifying the equivalence or equality
of the commodity bundles are anyway logically independent of each other, in
that they don't necessary entail each other.
(c) There could be all kinds of motivations on the part of the traders,
which explain why the commodity bundles trade in this ratio, and not in

The conclusion of all that is, that Marx's hypothesis of labour-value as the
basis of equality or equivalence (abstract labour-time as the substance of
value) in this trading relation cannot be LOGICALLY proved. At best you
could prove that an explanation in terms of labour-value is coherent and
non-arbitrary, and that it has a lot of explanatory power with regard to
explaining what regulates the economic exchange of new reproducible

Ajit seems to imply that you don't need to theorise value at all, because
all you need to know is that X amount of commodity A and Y commodity B have
the same money-price, for whatever reason. In other words, what Marx marks
out as a problem which traders confront, really isn't a problem.

The term "commensuration" is possibly confusing, because commensurability
can mean having '"the same magnitude", "having the same proportion" or
"being measurable by a common standard" (the Latin root is "mensura" meaning

As regards unequal exchange, this could be explained in a simplified way as
follows. Let's say for argument's sake that we have the following simple
hypothetical trading equation:

one tractor = 2000 kilos lamb meat (unboned) = US$50,000 = 2,000 labour

This equation would express an equal exchange. Suppose however that the
terms of trade change. The price of a tractor rises to $60,000 although it
now costs only 1,500 labour hours to produce, while the price and the
labour-cost of lamb meat stays constant. A tractor will now exchange for
2,400 kilos of lamb meat, but in addition 1 hour of tractor-making labour
yields a total revenue of $40 while 1 hour of meat-producing labour yields a
revenue of only $25, and effectively 1 hour of meat-producing labour
exchanges for 0.75 hour of tractor-producing labour. You then need to
produce 20% more lamb meat to buy one tractor, with 400 extra labour hours.
This would be a substantive unequal exchange problem. It is not just that
one price went up and another stayed the same, but that the trading position
of one party improved, and worsened for another, with the effect that one
trading party has to spend more time and money to obtain the same good, the
other less.

if we consider the equation:

one tractor = 2400 kilos lamb meat = $60,000

we do have a statement of equivalence, but there is an unequal exchange
involved insofar as 1,500 labour hours exchange against 2,400 labour hours,
and in the sense that the revenues from trading the same goods across time
have shifted in favour of one trading party and disadvantaging another.

Unequal exchange can take extreme forms. For example, the Guardian recently
reported that "workers who make its clothes in Bangladesh are being forced
to work up to 80 hours a week for as little as 4 pence an hour" (This would
imply a weekly wage of about 3.20 pounds in Bangladesh compared to a median
450 pounds or so for a 40 hour week in Britain. One British pound is about
140 Bangladeshi taka, and a loaf of bread in Bangladesh would cost about 12
taka, i.e. about 8.6 pence compared to close to one pound in Britain).
Chossudovsky noted that when a dozen shirts were exported from a Bangladesh
garment factory to the USA in 1992, the cost structure in US dollars was
found to be as follows: Materials and accessories (imported) $27;
Depreciation on equipment $3; Wages $5; Net industrial profit $3; Factory
price (one dozen shirts) $38; Gross mark-up $228; Retail price (per dozen)
in the West, before tax $266; Retail price including sales tax (10 percent)
$292.60 (Source: Chossudovsky 2003, p. 83). Bangladeshi garment workers
rioted in 2006. Unions rejected a minimum monthly wage of 1,604 taka and
wanted at least 2,000 taka, while employers said even a 1,604 taka minimum
wage would have a "devastating" impact on the garment industry by making it
less competitive on world markets. There are about 4,200 garment factories
in Bangladesh, employing 2 million workers and earning 3/4 of the country's
income from exports.

Marx alluded to unequal exchange in the following quote:

"From the possibility that profit may be less than surplus value, hence that
capital [may] exchange profitably without realizing itself in the strict
sense, it follows that not only individual capitalists, but also nations may
continually exchange with one another, may even continually repeat the
exchange on an ever-expanding scale, without for that reason necessarily
gaining in equal degrees. One of the nations may continually appropriate for
itself a part of the surplus labour of the other, giving back nothing for it
in the exchange, except that the measure here [is] not as in the exchange
between capitalist and worker."

He leaves out however the possibility of major wage differentials, i.e.
differentials in the normal rate of surplus value (or wages-profits ratio)
and the value of labour-power (or modal real wages).

Of course you can raise the wages of Bangladeshi workers, but is totally
equal exchange ever possible? I don't think it is. But you can ensure all
get access to the necessaries of life by means of extra-market interventions
(subsidies, tax breaks, administered prices, price controls, licensing,
renting and leasing etc.) or by providing people directly with what they
need, without market mediation. Allocation of resources via the market is
only one method of resource allocation. It can be justified if it is
efficient and fair, but if it is not, there is no theoretical or practical
reason to keep going with it, only the economic interest of social classes
and nations. Capital can accumulate and be valorised only if markets expand,
that is the main reason for marketisation. But if marketisation has the
effect that masses of people can no longer meet their needs, it makes no
economic sense anymore.


This archive was generated by hypermail 2.1.5 : Tue Jul 31 2007 - 00:00:06 EDT