[OPE-L:1659] surprising agreement?

rakesh bhandari (djones@uclink.berkeley.edu)
Mon, 1 Apr 1996 00:54:51 -0800

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Gil has argued that Marx "asserted, invalidly, that surplus value must be
explained on the basis of price-value equivalence."

1. Proudhon or Marx

No one has doubted surplus value can be appropriated by usurers and
merchants and that these circuits have historically depended on
non-equivalence. But this was hardly Marx's discovery. Indeed it was so
well understood that independent producers were selling at below value that
this became a central concern of a powerful petty-bourgeois movement:

So Gil, aren't you interested in a 19th century problem? Isn't Marx's
effort at least a part in the clarification of the interests of the working
class--that they cannot be free of exploitation even if the ideals of the
market are to be realized, as called for by the petty bourgeois opposition?

I know that Mike L has asked you a similar, though undoubtedly better
formulated, question very early in this exchange, so perhaps you (or Mike
if he is reading) will kindly refer me to the post # of your reply, which
I have also read but obviously since forgetten.

2. Self-expanding value, not simply surplus value.

Now I am assuming that Fred shows why Marx was justified in making the
assumption of price-value equivalence and in deriving the labor/labor power
distinction as key to the explanation of surplus value. (I should say that
I do not think Gil's response to Fred's macro interpretation of vol I is
persuasive, but obviously the matter is not settled at this point and I
look forward to their further exchange.)

Remember however that Marx is not only attempting to explain the fact of
surplus value but what makes possible the ceaseless self-expansion of
value. After all chapter 4 introduces capital as not simply surplus value
but as what Marx calls an automatic subject.

Ultimately the self-expansion of value is inherhent in the money-form where
the commodity has become the dominant social relation (a very complex
argument indeed, have not yet read Tony's Logic of Marx's Capital); but
suffice to say every capitalist knows you don't go broke from an excess of
surplus value, so this class is driven in its attempt to expand value.

Not only (as Mike L brilliantly argues in OPE-L 1421) are the merchant and
interest-bearing circuits inadequate to the concept of capital in its
being, i.e., as self-expanding value (though of course they were critical
in its historical becoming, as Rosdolsky would put it), capital cannot even
rest on the foundation of manufacture based on labor-power freely hired at
its value.

In other words, what Gil has not considered is the inadequacy of these
historically prior forms of capitalist exploitation, as he would put it, to
the self-expansion of value. (I think Mike has said all this much better
before, right?)

Moreover, Marx has not himself solved the problem of the self-expansion of
value (the general formula of chapter 4) solely by discovering the
use-value of the commodity labor power. This only explains how despite all
exchange at equivalence M' can be produced systematically and collectively
for all those who purchase labor power.

Marx does not prove that M' can expand continuously through the consumption
of a special commodity bought at its value: labor power.

For the self-expansion of value, the capitalist mode of production is
actually required. Indeed one of Marx's main vol I theoretical efforts is
the demonstration that self-expansion of value is only possible on the
foundation of relative surplus value, itself the product of the transition
from manufacture to machino-facture, the continuous revolutionisation in
the conditions of labor, the real subsumption of labor.

Moreover, all capitals rely on each other to revolutionize the actual mode
of production in their respective branches, produce the revolutions in
value characteristic of this mode and therefore create the conditions for
the production of relative surplus value--that is, the reduction of
necessary labor time. Without continual revolutions in the mode of
production, there would be greater physical limits to reduction in
necessary labor time.

The development of real subsumption can also be understood as conscious
strategic behavior (as Gil may put it) on the behalf of capitalists as they
find the self-expansion of value limited by the rebellion of the working
class to absolute exploitation. Capitalist strategy in other words is
materialized in technology. But the strategic manuvering of capital (what
is otherwise called technical progress)is to be explained on the basis of
value theory.

Another very complicated argument would be that once Marx has demonstrated
how the self-expansion of value is only possible through continual
revolutions in the capitalist mode of production, he shows further how
industrial capital must come to dominate and subordinate to its own
expansion merchant and interest-bearing capital, thus reversing in logical
and theoretical order the historical forms of capital.

It would be his theoretical demonstration of the tendential subordination
of these other forms of capital to industrial capital that would
retroactively justify his exclusion of these historically prior forms in
chapter 5. I believe this is what Tony means by a regressive derivation.

3. Marx or Bohm-Bawerk?

There is also one other implication of Gil's argument to which I would like
to call attention.

Once we drop the assumption of price-value equivalence, there is no reason
to confine ourselves to interest-bearing and merchant capital as equally
viable routes to surplus value

What is to rule out Bohm-Bawerk's pure time preference theory (PTPT) for
the explanation of surplus value: "production processes do take time, hence
the present *price* of input services must, given positive time preference,
systematically and repeatedly fall short of the nominal *value* yielded in
the future by their marginal productivity." (Israel Kirzner, "Pure Time
Preference Theory of Interest" in The Meaning of Ludwig van Mises. Kluwer
Academic, 1993, p. 172)

So from this Austrian perspective, the assumption of price-value
equivalence would rule out by definition the PTPT explanation of surplus
value. That is, if one simply assumes final value must be fully imputed
to all the prices of input services, he has simply defined out of existence
PTPT of surplus value.

Would you agree?

By the way, I bet you are a closeted Austrian and Roemer is the Walrasian.