[OPE-L:3900] Re: negative surplus-value

John Erns (ernst@pipeline.com)
Mon, 30 Dec 1996 17:50:23 -0800 (PST)

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In OPE 3895, Jerry wrote:

Quoting me:

>A reply to John's [OPE:3894]:
>> You somehow are able to state that "In extremis, this could mean s = 0."
>> Why stop at 0? You assure us that s is 'not' negative. Why is it not? If
>> capitalists advance $100 and end up with $90, how could s be greater than
>> or equal to 0?

He then comments:

>Surplus-value must be *transformed* into profit. Simply because s is
>produced, it does not mean that it will be realized.
>If capitalists advance $100 (for c + v) and if they end up with $90 this
>will count as a loss, to be sure. But, a loss of *what*?

John responds:

A loss of capital. Note that in Marx's formulation, M-C-M', here M > M'
and hence delta M is negative. For positive surplus value to exist delta M
must be positive. For negative surplus value to exist, delta M must be
negative. This seems to make sense. What is the difficulty in saying that
surplus value can be negative?

Jerry continues:

>Surplus-value, like c and v, can not be negative because they are not
>*by themselves* ratios. Of course, v *must be* greater than 0 :-). But, s
>can equal 0.

John responds:

What does this mean -- "Surplus value, like c and v, can not be negative
because they are not 'by themselves' ratios."?

Must a variable be a ratio to be negative? I'm a bit lost.

Quoting himself, Jerry continues:
>> > (2) there could be an extreme reduction in the value of commodities
>> > produced (output) due to hyperinflation. Profitability could be negative,
>> > then, as the cost of inputs (c + v) increases.

To which I had asked:

>> How does hyperinflation reduce the value of commodities?

Jerry answered:

>Inflation can raise the costs of c + v for capitalists. As the costs of
>production for capitalists increase, profitability would decline (unless
>they are able to increase the market price of the commodities that they
>sell by a rate at least equal to the rate of inflation).

I stated:

>> It now seems clear that you determine the value produced without any
>> reference at all to money.

Jerry remarked:
>Clear to you but not to me.

I now add:
OK. Let's see if I can be clearer. If I advance $100 and receive $110, I've
made $10. What you seem to be saying is that if inflation is taking place, my
costs might have been $120 if I were to price inputs using the prices outputs.
Hence, I have a nominal profit of $10; but with the simultaneous pricing of
inputs and outputs, I would suffer a loss of $10. To track this process out
we would need to keep going and agree to some definitions of terms like
profitablity and the rate of inflation.

Jerry then states, quoting me:

>> Hence, we can have negative profits and
>> positive surplus value.
and he remarks:
>I haven't discussed that case.

I now add:
Ok. What you seem to be saying is that with negative profits, surplus
value can equal 0. Can it be positive as well, given negative profits?
Let's discuss.

I then asked:

>> Yet, if workers consume more than they produce, is
>> not surplus value negative?

To which, Jerry responded:
>Suppose in time t, capitalists advance $100 for v and $100 for c, but
>receive after sales a total of $90. In that case, they would have advanced
>$200 but only received $90 back. Would this be a case of negative surplus
>value? No, because there is no s. Their profit would then be negative yet
>their s would be 0.

I now remark:

I don't get it. Why is s=0 in your example? Why is it not negative?
Granted there is no positive s, but s would equal 0 if from your
advance of $100, you got only $100 back. Here, you get less than $100, or
$90, and still you maintain that s=0. Again, I do not get it.

Quoting me, Jerry continues:

>> In (6), you seem to want to
>> separate losses in constant capital from the production of surplus value.
>> Indeed, I think this is the heart of the matter.

He then states:

>Remember that I was dealing with natural disasters and social disasters
>(e.g. wars). Suppose that the value of c in time t equals $100. Along
>comes a typhoon in time t + 1 and the c is washed out to sea. What happens
>to the value of that c? It is lost at sea. Although the s *produced*
>hasn't been affected, the ability of c to transfer its value has been
>reduced. In that case, profit would decrease because the value of c has
>been "lost." Even if one accepts the idea that value is conserved *in
>exchange*, that doesn't mean that it can't disappear afterwards even
>though its use-value hasn't been wholly consumed.
>But that returns us to the question of moral depreciation, does it not?

I now add:

Well, I do agree we seem to have some sort of depreciation in your example.
You seem to say that surplus value is produced even in cases where
delta M is negative or where M > M'. Hence, I am not at all clear that
you would agree that surplus value can be negative. Perhaps we're back
to your ratio thing (See above.).