[OPE-L:4122] Re: use-value and value

andrew kliman (Andrew_Kliman@msn.com)
Fri, 31 Jan 1997 14:17:08 -0800 (PST)

[ show plain text ]

A reply to Steve Keen's ope-l 4116.

I agree with what Steve calls "nonsense":

"if the machine not only physically depreciates but also suffers from
technological obsolescence, then *less than* the entire value used up in its
production is transferred to the product, and the capitalist is in fact
making a loss out of fixed capital. It sounds like capital is walking a
tightrope just above extinction at the hands of technological change. If
this rate gets too high, then it is possible that the loss from
technological obsolescence could wipe out the profit from the exploitation
of labor, leading to a loss overall."

Whys this "nonsense"? Supposedly because it "implies that an increase in
technological change can send capitalists bankrupt."

Gee, now that's really unimaginable ...

.. if you fetishize technology and productivity and material things, if you
think that what drives capital is the self-expansion of use-value, if you have
unshakable *faith* that rising physical productivity causes the rate of profit
to rise.

There is a name for this piece of dogma: the capital productivity theory of
the profit rate.

Of course, that's only the neoclassical name. I've also seen and heard the
label "Marx's theory" wrongly applied to it. I wonder what the post-Keynesian
name is.

Is there any evidence for this piece of dogma? Please don't give me arguments
like a more productive firm or country does better than the less productive.
I understand what redistribution of value is. I'm asking about evidence for
the system as a whole? How do you explain the fact that the world is in deep
misery despite the immense breakthroughs of the past 200 + years? How do you
explain the absolute immiseration that has gripped most of the 3rd world, and
the fact that the worldwide slump of the past two decades *continues*, despite
what seems to be an unprecedented wave of innovation and potential
productivity breakthrough provided by the microprocessor? Why aren't we all
wallowing in comfort and luxury and working 30 minutes a day? When I was
growing up in the 1960s, that was exactly the kind of thing that was being
told to us, and that was even before the microchip. So what has gone wrong?
Are the greedy evil rich people just taking from the poor and the middle
income? Is that what you think explains all this? Or how about that
aggregate demand is low? Wonderful tautology. Investment is sluggish? Gee,
if physical productivity is what makes things profitable, the capitalists
should be investing like crazy in all the new technocrap if they had any sense
at all. Maybe their brains have atrophied along with their animal spirits?
Or maybe rising real wages are depressing the profit rate? But we're not in
the 1970s anymore, Toto. What condition do you think things would be in if it
were not for the massive explosion of debt, even in percentage terms?

Give me a break. There is only one theory I know of that can explain the
coincidence of the microelectronics revolution, the mass unemployment, and
continuing slump and immiseration. It is the rising composition of
capital/falling rate of profit/capital devaluation theory (Marx, _Capital_
III, Chs. 13-15).

Even given Steve's theory according to which machines create value, what do we
have? Imagine a machine that produces replicas of itself. But it produces
the replicas more cheaply than it itself was produced, due to rising
productivity. So capital acquires a machine at time t having a value of X,
but at time t+k, it is only worth X - d. Looks like devaluation of capital to

The *only* way to deny this is to say, either directly or indirectly, that the
*substance* of value is use-value. (The indirect way to say this is to have
numeraire prices. The even more indirect way is to make labor the substance
of value, but then to make the labors of two different times unequal if their
use-value productivities are unequal, as Bruce does explicitly and all
simultaneist "Marxist" value theory does implicitly.)

Steve: "there's no guarantee that Marx got it right."

There's no *guarantee* that he didn't have two or more value theories.
There's no *guarantee* that Steve Keen isn't the Messiah. But don't we need
to look at the EVIDENCE, or am I just a pre-post-modern fuddy-duddy? There's
no *evidence* that Marx got it wrong. There's a lot of *evidence* that he got
it right.

Andrew Kliman