[OPE-L:1731] Re: productive assets

Gilbert Skillman (gskillman@wesleyan.edu)
Wed, 10 Apr 1996 10:49:02 -0700

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Andrew writes: [....]

> So I think it is important to *focus theoretical attention* on the
> labor process when discussing profit. My main beef with Roemer's
> work is that he enables the reader to conclude that distribution
> relationships are sufficient to explain profit.

Well, yes and no. Roemer's conclusions re "Capital Market Island"
are consistent with Marx's stipulation that surplus value involve the
appropriation of *newly created* value. Thus *some* labor process is
necessarily involved in Roemer's analysis of profit and interest, in
any case, as suggested by his "Farm and Factory" example in FREE TO
LOSE. The issue is rather whether the appropriation of newly
created value by capitalists requires that the labor process be
controlled by capitalists, in at least the sense of formal

But this is a strategic issue, and generically a matter
of degree rather than kind. Roemer ignores it because his assumptions
preclude the introduction of strategic considerations in production
(no asymmetric information, price-taking behavior, etc) (which are
also necessarily outside the purview of Marx's value-theoretic
analysis in Volume I, Part 2, by the way), but it does not
follow that Roemer is categorically wrong for saying that differential
ownership of relatively scarce productive assets is as a general rule
sufficient for the *existence* (as opposed to the *maximal
realization*) of surplus value and thus profit.

Nor, as I've argued in my Economics and Philosophy article, is there
unambiguous support in CAPITAL for the contrary claim that capitalist
production relations are categorically necessary for the *existence*
of profit, given that

1) for the era prior to the advent of the capitalist mode of
production, Marx affirms that capitalist exploitation can occur
without the capitalist mode of production (a point also unambiguously
affirmed in the Grundrisse, the Economic Manuscript of 1861-63, and
the Resultate)

2) once the capitalist era has begun, Marx says that cessation of
capitalist production relations in favor of a return to usury capital
relations would lead to "a tremendous fall in the rate of interest"
(III, 501), not an elimination of any such interest.

Mike Lebowitz has suggested, based on Marx's analysis, the stronger
condition that capitalist control of production is necessary for the
*stable reproduction* of profit, but that is a separate issue that
Roemer's work doesn't attempt to assess.

> I must apologize for not having kept up with the intracacies of the
> debate over Ch. 5. I got lost because I didn't understand the terms of
> the debate after a certain point. So, refraining fron devastating or
> nondevastating salvos for the moment, let me just ask Gil to
> clarify 2 things:
> (1) When you speak of "price-value equivalence," do you mean the
> condition in which (all) commodities exchange at (or proportional to)
> their values (however one "defines" value)?


> (2) In the phrase "must be explained on the basis of price-value
> equivalence," do you take "must be explained" to indicate "is impossible
> except under this condition"? If not, then what do you take it to mean?

No, I don't take this to mean "is impossible except under this condition".
I set out my interpretation of Marx's sense, based on his analysis at the end
of Ch. 5, in my second "laying down the cards" post on the Ch. 5
critique, if you want to see the precise wording. But basically I
read Marx as saying that any situation in which surplus value (and
thus profit) exists is analytically isomorphic to one in which all
commodities exchange at their respective values.

The sense of "analytically isomorphic" is suggested in the final
footnote to Ch. 5: price-value disparities are understood as
essentially "incidental" to the process of appropriating surplus
value, so that if surplus value exists for a given set of production
and exchange relations, its existence is not contradicted by the
imposition of price-value equivalence within that set.

In solidarity, Gil