[OPE-L:1179] Last Vast Blast, Alas continued

Gilbert Skillman (gskillman@mail.wesleyan.edu)
Wed, 21 Feb 1996 12:46:35 -0800

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I continue to work through Alan's "Last Vast Blast" mega-post with
just one goal in mind, to show that his arguments do not address my
central critique of Marx's conclusion in Ch. 5 of Volume I.

[Fast forward]

> Equation 1 or Marx: which one has to go?
> ========================================

Note in preparation for what follows that my critique stays even if
equation 1 (v = vA + L) goes, since the critique does not depend on
this definition of value.

> An important part of Gil's thesis is that because of a
> 'fundamental error in Marx's logic', the value-theoretic
> component of Marx's work fails to recognise sources of
> exploitation other than the sale of labour power for less
> than the value it creates:
> "Marx's value-theoretic account in I, Chapter 5 must
> establish two claims. The substantive claim is that surplus
> value cannot exist in a scenario in which the only relation
> between exploiters and value producers is one of exchange;
> the corresponding methodological claim is that an adequate
> account of surplus value must be based on the condition of
> price-value equivalence. Neither claim is valid." [from
> Gil's Science and Society article p15 in the version he sent
> me]

Let's be precise about what I'm arguing here, which the passage Alan
quotes above condenses: I'm saying first that Marx's "value-theoretic"
account of capitalist exploitation proceeds on the premise that
"an adequate account of surplus value must be based on the condition
of price-value equivalence." This premise does not follow from the
arguments given in Ch. 5. The strict logical implication of the
premise, though, is that capitalist exploitation can only be based on
the circuit of capital based on the purchase and subsumption of labor
power, i.e. one in which workers and capitalists have *both* an
exchange and a production relationship, since only this circuit
satisfies the stipulation of price-value equivalence.

However, since the premise is invalidly derived, it cannot support
Marx's exclusive focus in the remainder of Volume I on the purchase
and subsumption of labor power.

***Notice this is not to say that capitalist exploitation does not
require production of new value, i.e. "something ... in the background
which is not visible in the circulation itself."*** Indeed it does require
this; what I'm arguing is that capitalist exploitation does not require the
*capitalist mode* of production, so that capitalists can appropriate
surplus value produced by workers without engaging in a production
relationship with these workers. That's the meaning of the first
part of the passage that Alan quotes.

Marx *repeatedly* and *emphatically* corroborates this claim in his
historical analysis of capitalist exploitation, beginning with
Grundrisse and working through the Economic Manuscript of 1861-63,
the Resultate, Volume III, and finally in the discussion of formal
and real subsumption in Volume I.

OK. Alan writes:

> I think these figures give reasonable evidence - and there's
> plenty more - that when sources of surplus value other than
> the purchase of labour-power emerge after dropping price-
> value equivalence, they 'arise' (in the math, not in real life)
> from one or both of two sources:
> (1)a genuine difference of interpretation, which centres on
> the concept of money, as to whether the value appropriated
> by a class should be measured by the value of the goods it
> consumes or the value of the money with which it buys them.
> (2)irreconcilable differences between Marx and the standard
> presentation of Marx, centring on 'equation 1', namely
> v = vA + L
> and the interpretation of v thus calculated as the measure
> of value appropriated.

Note first that this can't *possibly* be the case, since mere math
cannot make an invalid argument invalid, and since my demonstration
of the invalidity of Marx's argument does not depend on a particular
definition of value.

Note further that mere math can't make Marx un-say what he says,
repeatedly, which is that usurer's capital and proto-industrial
merchant's capital represent appropriation of surplus value without
"the purchase of labour-power". Note as an aside that Alan's
position is forcing **him**, not me, to reject Marx, at least on this

What I could do here is try to facilitate further discussion by suggesting
possible grounds for Alan's (necessarily false) implication that
surplus value must arise solely from purchase of labor-power, and
provide a numerical example which demonstrates the contrary.

I suspect, although I can't demonstrate it yet, that the error arises
from the Alan's suggestion in LVB3 that the claim "surplus value
arises without the purchase and subsumption of labor power" implies
the claim "surplus value arises solely from exchange." But as I
argue in detail in earlier posts, and in section 2 of the S&S article
which Alan has a copy of, this is not the case: surplus values
requires production, it just doesn't require the *capitalist mode* of
production, and thus does not require the purchase of labor power.
Again, Marx repeatedly confirms this statement in his historical

Numerical example: take Marx's canonical case of capitalist
exploitation within the capitalist mode of production, in which
capitalists hire the commodity labor power and extracts its use value
labor in excess of the value of labor power, creating surplus value
by anyone's definition. Representing all magnitudes in terms of
labor time, let the value of labor power = 10, value added by living
labor = 20, and thus surplus value = 10.

Now construct a new case as follows which is isomorphic to the
previous one in value terms: suppose the capitalist is a usurer
rather than an industrial capitalist, and suppose the worker owns the
machine(s) but must borrow money from the capitalist in order to buy
tools and raw materials which are necessary for the worker to produce
the same value added referred to above. Thus let the worker's value
added again be 20, and let the interest charged by the usurer be equivalent
to 10, leaving the worker a net value of 10.

These are the same magnitudes, created in exactly the same way, *as*
value magnitudes. Thus the surplus value of 10 in the previous
problem is now the surplus value of 10 in the new problem, which has
not involved the purchase and subsumption of labor power,
contradicting Alan's assertion. And again, this reading correlates
precisely with Marx's historical analysis of usury capital extended
to small producers. A parallel argument can be made with respect to
proto-industrial merchant's capital.

If you're moved to say that capitalists can no longer achieve surplus
value in this manner once workers are "free in the double sense" and
specifically capitalist production conditions prevail, I'd say you're
right (at least as a matter of degree), but this has nothing to do
with Marx's value-theoretic arguments, and everything to do with
Marx's historical-strategic arguments.

> Without prejudging how much of our differences arise from
> source (1) and how much from source (2), I not only admit
> but confidently predict that if value is defined using
> equation 1 then value transfers will indeed be 'registered'
> which cannot be traced back to the sale of the commodity
> labour power. That's why equation 1 has to go.

But this is beside the point, since by whatever consistent definition
of value appropriation of surplus value does not require the
substantive condition of wage labor. Alan's fallacy here is that
he's trying to use a merely numerical argument to establish a
qualitative claim.
> However, Gil says more, and what he says is very peculiar
> given his thesis.

> He says, Marx was wrong, but equation (1) is correct.

Not really. I say Marx's conclusion at the end of Ch. 5 is invalid,
and thus can't support his subsequent exclusive focus on the purchase
and subsumption of labor power in Volume I. Furthermore, and
apparently unlike Alan, I say that Marx was **right** to insist that
capitalist exploitation does not require the purchase and subsumption
of labor power, as he repeatedly states in his historical analysis.

Neither argument depends on affirming equation (1). For the record,
I haven't insisted it's correct so much as argued that Alan's and
Andrew's criticisms of it are not correct. This argument is ongoing,
but unrelated to my Ch. 5 critique.

> We don't say that. We say, Marx was right, and equation 1 is
> wrong.

Well, in light of the above you're explicitly saying Marx is wrong
when he says that capitalist exploitation occurred without the
purchase of labor power
> The asymmetry in this argument needs to be brought to light.
> Only one side in this discussion accepts this equation,
> namely Gil.

No. See above.

Yet it is Gil who says that the Marx's value
> theory is based on a fundamental logical error.

No, just the way that Marx invokes value theory in his conclusion of
Ch. 5.

> Our solution to the problem is very simple: junk equation 1,
> keep Marx. This is not only valid but consistent.
> Gil's position is, I think, both invalid and inconsistent.
> For, if the real problem is the 'fundamental logical error'
> of Marx's value theory, why hang onto its most suspect
> equation? This is like refuting God by saying the Devil does
> miracles too. It has iconoclasm appeal but somehow misses
> the point.

As seen above, this utterly misrepresents my position, which does not
depend on "hanging onto" equation 1. My critique of Ch. 5 is neither
invalid nor inconsistent, and by the way Alan has never yet
explicitly addressed the core argument of this critique.

> If the alternative to Marx's 'fundamentally erroneous' value
> theory *rests on* its most disputed equation then the
> proposal is substantially less radical than the rhetoric.

Irrelevant. See above.

> If Gil wants to defend something he himself has proved
> indefensible, that is up to him. But what he cannot do, is
> use it to attack a construction which starts from its
> rejection. A 'disproof' of what we maintain - and hence any
> proof of a 'fundamental error' in Marx - *cannot* employ
> equation 1, unless it can be shown that there is no other
> basis on which to proceed.

Nowhere have I argued that my critique depends on "employing"
equation 1. In fact it does not.

> But we have shown another basis on which to proceed.

Which does not in any way address my critique.

In solidarity, Gil