[OPE-L] "Levels of abstraction"

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Tue Jan 29 2008 - 16:02:05 EST

Hi Dave,

I appreciate the humour but the argument is rather weak. It is not clear how your standpoint of capital differs much from your standpoint of historical materialism. The main thing to note is that in a developed market society it is no longer clear how the distinction could validly be drawn, because the distinction between earnt and unearnt income and between wealth-creating and wealth-redistributing labour becomes more opaque.

When the argument is about productive and unproductive labour in capitalism, you start talking about feudal relations instead; but the main thing which Marx emphasized is that the distinction is drawn differently in different types of societies. 

Personally, I do not subscribe to "historical materialism". Marx spoke only of a "materialist view or interpretation (Auffassung, i.e. conception) of history". Historical materialism is a doctrine about history mainly touted by Marxists who do not actually study real history. If they did, little would remain of the doctrine. The doctrine exists precisely because it substitutes for studying history.

I see no reason why luxury production (or arms production) must intrinsically be unproductive or productive because of the nature of the objects involved, and I have no particular objections to jewellery although I don't wear any myself. Ornamentation is the basis of all art. 

Jim Devine recently supplied an interesting take on the PUPL problem http://archives.econ.utah.edu/archives/pen-l/2008w04/msg00023.htm

He claims that if S1 denotes the surplus value created by productive workers and if the rate of profit is stated as r = (S1 + U)/(C + V) =  [(S1/V) + (U/V)]/[(C/V) + 1] then an increase in (U/V) "does not not affect" the value of the numerator in the equation. It looks hot and sophisticated but I am not sure how he figures that. 

Assume that S1 = 100, V = 100, U = 200, C=500 then

r = (100/100) + (200/100)/[(500/100) +1] = (1 +2)/(5+1) = 3/6 = 60%

if U increases to 400, then

r= (100/100) + (400/100)/[(500/100) +1] = (1+4)/(5+1) = 5/6 = 83.3%

Clearly, the profit rate rises, if U/V increases, other things remaining equal. That is what I showed before in a simpler, less sophisticated way.

The only way we make the Moseleyan argument as interpreted by Jim Devine work in basic arithmetic here, is if the increase in the U/V ratio is directly at the expense of the S1/V ratio, so that the former increases in exact proportion that the latter decreases. Because only in that case does the numerator stay constant. But given that in fact U and V both increase, although not at the same rate, where is the evidence that U/V increases in exact proportion that S1/V decreases? In other words, where is the evidence that any reduction of S1 is matched by an equivalent increase in U? Why would this be?  Clearly, we can only sustain this inverse proportionality, if we assume additionally that S1+U is a previously fixed magnitude, a lump ("a mass of surplus value available for distribution").

Assume as before that S1=100 and U= 200, then 

S1+U = 300

Let' call this magnitude S2 (the "generic surplus"). Then


If U increases by let's say 50, but the value of S2 remains fixed at 300, then it must be the case that:

S1' = 100-50 = 50
U' = 200+50 = 250

Where S1' and U' denote the result of the income transfer. We can prove that:


It really does not matter if we divide the variables by V, the result is exactly the same. If there is a "lump" of 300 to start of with, which does not change, then any gain in U is offset by a loss of S1.
Things would be different, however, if any increase in U was also at the expense of V, in addition to being at the expense of S1. 

Assume again that S1 = 100, V = 100, U = 200, C=500, then the total lump of capital K equals

K = 900

We can state again that

r = (100/100) + (200/100)/[(500/100) +1] = (1 +2)/(5+1) = 3/6 = 60%

if U increases by 50, and S1 reduces by 25, and V reduces by 25, we can write:

K = S1(100-25)+V(100+25)+U(100+50)+C(500)=900 


r = (50/100) + (250/50)/[500/50) + 1] = (0.5+5)/10+1= 50%

Thus, because the increase in U was both equally at the expense of S1 and V in a zero-sum game, while the lump K remains constant, the profit rate declined by 10 percentage points. This I think is really more the type of thing which Fred Moseley has in mind. The trouble with it though is that the argument seeks to infer relations of production from relations of distribution, and that doesn't sound very Marxist.


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