[OPE-L:1666] productive assets

rakesh bhandari (djones@uclink.berkeley.edu)
Tue, 2 Apr 1996 02:31:56 -0800

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No insult to Gil was ever intended.

As I read Gil's paper, I see that he emphasizes differential access to
productive resources, not Austrian time preference, in his positive theory
of exploitation.

For example, Gil has written: "Roemer demonstrates that, subject to
conditions which are beyond the purview of Marx's value theory,
differential ownership of relatively scarce productive assets is sufficient
to account for the existence of surplus value." Gil also likens the owners
of relatively more productive assets to Ricardians owners of comparatively
high fertility land.

One of the main points of volume III of course is that a capitalist who
introduces a better, perhaps more capital intensive machine (a relatively
more productive asset) cannot comprehend that the (transient) rise in the
mass and perhaps even rate of his profit results through the process of
price formation from the redistribution of the aggregate value produced by
the proletariat as a whole.

Indeed exactly because the innovator now hires less labor relatively
(though perhaps not absolutely) he is subject to the neither capricious nor
rational illusion that really big profits do not result from *the real
subsumption of labor*, as Gil seems to be implying as well, but from his
differential access to a really productive asset. In short, that
differential ownership of relatively scarce assets is in itself the real
basis for surplus value is nothing more than the common sense of the

"A saving of labour--not only labour necessary to produce a certain
product, but also the number of employed labourers--and the employment of
more congealed labor (constant capital), appear to be very sound operations
from the economic standpoint and do not seem to exert the least influence
on the general profit rate of profit and the average profit. How could
living labor be the sole source of profit, in view of the fact that a
reduction in the quantity of labour required for production appears not to
exert any influence on profit? Moreover, it even seems in certain
circumstances to be the nearest source of an increase of profits, at least
for the individual capitalist." (Vol 3p, 170, Progress)

Marx was not kind to those who vulgarized theory into the systematization
of such conceptions,

Let me quote Carchedi:

"Through the price mechanism, the more productive capitals can appropriate
more value than the value produced by their workers and increase the
tendentially realized rate of profit....This creates the *illusion* that
dead labour, or constant capital, creates value, whereas constant capital
is only the means through which value is appropriated from other, less
productive capitals." (Frontiers of Political Economy, p. 68; it should be
noted that Carchedi discusses not only origins of this extra value but also
the systemic constraints on its actual magnitude. This I don't think Gil
will be able to do without value theory).

What is also interesting is the nature of the scarcity of these more
productive assets. Unlike the relatively high fertile land of Ricardo,
these assets are not found in nature; they are innovated incessantly.
This has to be explained and Ricardo's rent theory is no help here.

Now the reason for incessant improvements in productive assets is not only
value-theoretic, as Grossmann pointed out. In part, this results from
the physical nature of means of production or productive assets. Since
productive assets physically last over a longer time than circulating
capital, there is a tendency towards the overproduction of fixed capital.
On the supply side, there is thus a tendency for intense competition among
manufacturers of productive means, the tendential result being
revolutionary improvements in the means of production.

On the demand side, there is the obvious value theoretic explanation. All
those firms which can have access to these new scarce means will be able to
enjoy the surplus profit which results, as Carchedi painstakingly shows,
from the redistribution of aggregate surplus value in the process of price

In short, value theory provides a powerful reproduction in thought of the
process by which owners of relatively more productive assets enjoy a
surplus profit or, if you want, technological rent. But note this is an
explanation for why these owners enjoy a higher rate of profit; it is not
an explanation for the source or of the nature of surplus value itself,
especially aggregate surplus value.