[OPE-L:877] Laying down the cards: first hand

Gilbert Skillman (gskillman@mail.wesleyan.edu)
Tue, 30 Jan 1996 09:42:52 -0800

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On the principle that one can't make an omelette without breaking a
few eggs, and as a first response to Alan's call to "lay down our
cards", let me begin my positive critique by stating as plainly as I can the
problem with Marx's argument in Chapter 5 of Volume I, and
where I think addressing the problem leads.

Let A = price-value equivalence, i.e. the condition that all
commodities exchange at their respective values.

Let C= capitalist exploitation, i.e. the "transform[ation] of money
or commodities into capital", the realization of surplus value.

The core structure of Marx's Chapter 5 argument is as follows:

1) A does not imply C.

2) Not-A does not imply C.

Therefore C is isomorphic to (C and A).

[The term "isomorphic" simply condenses the argument given in the final
footnote of Ch. 5, where Marx says that "If prices actually differ
from values, we must first reduce the former to the latter...in order
to observe the phenomenon in its purity, and to prevent our
observations from being interfered with by disturbing incidental
circumstances which are irrelevant to the actual course of the
process" ; obviously the meaning of this should be fleshed out,
but I take as a minimum condition for any such isomorphism that the
class structure of production is left intact by any such "reduction".]

There are two problems with Marx's argument.

First, and most obviously, the conclusion does not follow from the premises.
Indeed, *no* particular claim about the connection between prices and values
given the existence of surplus value follows from these premises. In
particular, the claim "C implies (not-A and B), where B is that
"something [which] must take place in the background which is not
visible in the circulation itself" [I, p. 268, Penguin], is
consistent with the premises. More about this claim below.

Second, Marx's conclusion is not only invalid but pernicious, since it
appears to suggest a necessary condition for the existence of
capitalist exploitation which is inconsistent with both logic and
Marx's own repeatedly stated historical arguments.

Only one circuit of capital satisfies the stipulation that all
commodities (including money) exchange at their values, i.e. Marx's
canonical case in which capitalists purchase the commodity labor power
and extract surplus value within the capitalist mode of production.
But then if one accepts Marx's conclusion as to the isomorphism
between C and (A and C), then capitalist exploitation as Marx defines
it can only occur by purchasing labor power and subsuming it within
the capitalist mode of production.

But this claim is logically invalid, as John Roemer's work
shows; see my October 1995 Economics & Philosphy article for details.

Worse, it is fundamentally at odds with Marx's own repeatedly
affirmed historical analysis. Every place Marx treats historical
circuits of capital at any length (including the Resultate, Volume
III of Capital, the Grundrisse, Part III of Theories of Surplus
Value, the Economic Manuscript of 1861-1863, and counting), Marx
unambiguously and emphatically states that circuits of capital
extended directly to small producers (including usurer's capital and
the proto-industrial form of merchant's capital) constitute
capitalist exploitation, the appropriation of surplus value, even
though such circuits antedate and thus do not presuppose the
capitalist mode of production.

[An important aspect of circuits of capital which antedated the
capitalist mode of production, an aspect affirmed both by Marx's
historical investigations and Roemer's theoretical investigations, is
that capitalist exploitation corresponding to such modes generically
*requires* the non-equivalence of prices and values for some
commodities, since capitalists in these cases did not hire the
commodity "labor power." In every case, though, the relevant circuit
is demonstrably consistent with Marx's complete schematic for surplus value,
M-C...P...C'-M'. ]

On the other hand, Marx just as emphatically insists in Volume III,
Chapter 23 that capitalist appropriation of surplus value would be
seriously compromised at the least if labor power were not subsumed
within the capitalist mode of production, *once the historical
conditions which characterize this mode of production prevail*, in
particular (I argue) a) the condition that workers are "free in the double
sense" and b) the social nature of specifically capitalist production
analyzed in Chapters 13-15 of Volume I.

But this leads to a puzzle: how can Marx repeatedly and
unambiguously affirm the effectiveness of usury and merchant's
capital in yielding surplus value, even to the point where the
capitalist can "swallow up everything in excess of the producers'
most essential means of subsistence" [III, p. 730], and yet insist
that these circuits of capital "live and die, stand and fall
together" with the purchase and subsumption of labor power under
capital [II, p. 136], *once the historical conditions of the
capitalist mode of production have prevailed*?

One answer, and I believe the answer that is most coherent and
consistent with Marx's writing, lies in what I have termed Marx's
"historical-strategic" account of capitalist exploitation, i.e. a
form of historical materialist argument which focuses on the
historically contingent strategic conditions of class struggle.
This approach sees the subsumption of labor power within the
capitalist mode of production as essentially a *strategic* response
to the capitalists' problem of extracting surplus labor from labor
power, under evolving historical conditions involving the degree to which
producers own some means of production and the social nature of

This account anticipates certain modern developments in the
mainstream "theory of information and incentives" by over one hundred
years, but depends on these more recent developments to be fully

Two more features of this approach which are of relevance to our
current project: first, it clears up certain lingering puzzles
Marx's Volume I account, as supplemented by the Resultate, concerning
Marx's definitions of "absolute" and "relative" surplus value, and
their asserted connections with formal and real subsumption,
respectively; and second, the account is utterly independent of any
particular connection between prices and values. In particular, it rebuts by
counterexample Marx's "isomorphism" conclusion in Chapter 5, Vol. I.

Two admittedly imperfect attempts to spell out Marx's
historical-strategic account of capitalist exploitation are presented
in my Ec & Phil article and my upcoming Science & Society article.
I'm writing a more comprehensive treatment now and hope to have it
available to those interested in a couple of weeks or so.

OK, there's my hand.

Gil Skillman