[OPE-L] Reclaiming Marx's "Capital": book launch talks, reviews, media coverage

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Sun Aug 26 2007 - 06:12:39 EDT

Okay sorry I won't use "Prof".

It is possible for capital gains to involve or not involve surplus labour in
some way, they can arise for all sort of reasons, I do not deny that at all.
There is not one source only for capital gains. The general price level for
a type of asset can rise or fall in accordance with the forces of supply and
demand, and profits can be made from that. The depreciation of currency
might explain some capital gains but not all.

The problem at issue is whether all profit is exclusively due to surplus
labour, and thinking economists say no, because profits can arise simply in
buying and selling already existing assets. You might argue in some
philosophical or historical sense that all profits are the result of past
surplus labour, but that is another proposition. That proposition is not in
fact true either, since e.g. if a bit of unimproved land is sold from one
individual to another, not an atom of past or current surplus labour is
involved.  As I have said, you have to distinguish between current and past
surplus labour. When we consider the so-called "bubble" phenomena, we can
find many instances of profits which have nothing to do with the real
economy at all.

Karl Marx's theory concerned mainly the source and distribution of profits
from value-adding production. Although profits can arise purely in
circulation (exchange) this cannot explain aggregate profit. Marx then
argues that interest, rent and profit income are appropriations of
value-added (the word Mehrwert literally means added value). But Marx never
argued that the circuit of capital is limited to buying inputs and selling
outputs. His argument is that there are a series of interlinked circuits of
capital, which can  have a semi-autonomous existence. The analysis of these
circuits shows not only how new value is produced, but also how value is

In Karl Marx's theory, products and physical assets have value insofar they
are the products of human labour. They have that value regardless of whether
they are traded, and regardless of whether they are priced or not priced.
Assets could also have a price without having a value, insofar as they are
not product of labour.  In any real economy, the majority of assets at any
time are not being traded. Those assets have a value insofar as they are
products of labour, but only a hypothetical (ideal) price. That value is
normally strongly influenced by current replacement cost, and thus by the
actual cost-structure of production, but it can also deviate from
replacement cost.

I've met plenty economists, who insofar as they can define what GDP is (many
cannot) believe that GDP refers to total economic activity, or total
national income. This is false, since GDP selects out only those
transactions conceptually related to production for statistical purposes,
and conceptually related to value-added. Thus, for a start, the financial
flows derived from business accounts for social accounting purposes do not
match the actual flows, they are a selection of those actual flows +
imputations, made according to social accounting concepts.

The Marxists and the Sraffians talked a lot about "inputs and outputs", but
they rarely posed the question how these are in practice defined and valued.
Yet this definition and valuation is ultimately derived from a particular
view taken of purchases and sales. That is why the debates are often not
very interesting, because they assume what has to be explained. They simply
assume there are inputs and outputs while the definition of those inputs and
outputs is itself dependent on a particular view of purchases and sales.
Marx did not really talk about inputs and outputs, he talked about a capital
value which is transformed into a larger capital value through production.

The Analytical Marxist John Roemer challenged what he calls the "fundamental
Marxian theorem" (after Michio Morishma) 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 (Morishima himself aimed to prove that, starting from
the existence of profit expressed in price terms, we can deduce the
existence of surplus value as a logical consequence).

Five reasons in Marx's economics 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.
- 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 product simply through their ownership of property.


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