[OPE-L:5367] RE: Luxury goods and profit rate

Ajit Sinha (ecas@cc.newcastle.edu.au)
Wed, 13 Aug 1997 04:31:46 -0700 (PDT)

[ show plain text ]

At 03:54 7/08/97 -0700, Riccardo wrote:
> The starting point should be, from the point of method, the privilege
>accorded to a macromonetary view. Now, in an economy where money is needed
>to finance production and investment demand is authonomous, the result is
>not exactly what Aijt is saying - that the rate of exploitation is a
>class phenomenon, referring to the sharing out of the product of the
>social working day?

I don't know whether I understand your point. The first aspect of the
statement sounds like a claim that Keynesian position should be accepted on
the methodological ground. But then what is the justification for it? Where
do we start from, of course, depends upon what kind of problem we are
trying to solve. Now, as long as the transformation problem is somehow
related to the solution of the problem of relative price determination in a
capitalist economy, I don't think Keynes is going to be too much of help. I
also think that a lot of money vs. real depends upon the time horizon of
the theory.

Now, on exploitation: if you take the total output as given, then in a two
class society it has to be shared by the two classes only (as long as we
assume that whatever is produced is used and not wasted). This you cannot
deny. Now, I say that, in this case, the rate of exploitation should be
determined by the ratio of labor time it takes to produce what capitalists
appropriate (both as private consumption and constant capital goods) and
what workers appropriate (consume) of the total net output. I said in this
case because you are suggesting a case where total output is given. My
general position is that given the real wages, the rate of exploitation is
determined in the struggle over the length of the working day (and this I
think was Marx's position as well). Given real wages and the technology in
use determines the necessary labor-time. The difference between the length
of the working day and the necessary labor-time determines the surplus
value. It doesn't matter what commodities workers are forced to produce
during this aggregate surplus labor-time. So this is no longer an ex-post
determination. And it is an objective measure in the sense that it can be
determined, in principle, by observation. I, up till now, have not heard
why the monetary measure of exploitation should be considered a superior
measure of exploitation over this objective structural relation of the
> That is, the whole of individual capitalists' behaviour, backed by
>the banking system, is not just the way the capitalist class appropriates
>the 'profit-goods'? And hence, cannot we say that necessary labour is the
>labour embodied in the production of wage goods, and surplus labour the
>labour embodied in the goods which are not made available to workers?
> The important points here are two: (i) bank finance to production
>allows firms to decide the composition of output; (ii) the monetary nature
>of capitalism means also that there are subjects (firms, the State) who
>can define their demand in real terms, while that's not true for workers
>as a class.

The question is why should composition of output determine the rate of
exploitation? Unless, we make the claim that the composition of output
determines the real wages. But that begs the basic question I have raised
in my response to Duncan in my previous post. I think that the monetary
point of view implicitly makes the argument that class struggle is about
the sharing of the given net output between the working class and the
capitalist class, and this struggle takes place at the level of price
determination, one way or the other. My position is that relative price
determination is not the cite of class struggle in the long term sense. it
is the length of the working day, week, or year that is the true cite of
class struggle. And if you look at the history of capitalism, then I think
my position comes out to be much stronger.

Good to see you back on ope-l. I had intended to respond to your earlier
message. But since you were gone, I thought I would do that when you come
back. But it's been too long and now I can't find your earlier post. But I
guess we are discussing the same issues anyway. Cheers, ajit sinha
> As the French F. Simiand said long ago: the money wage is a fact,
>the real wage is an opinion. I think that this view, which is the same as
>the New Interpretation, is the same behind what I am suggesting - though
>of course I would argue that in my way it is more consistently maintained
>8-). So I don't see what I am saying as clashing with Foley's argument.
>Simply, my argument points towards the idea that we must distinguish the
>rate of exploitation (in 'value' terms) from the profit/wage ratio (in
>labour represented terms). What I reproach to Aijt is that he seems not to
>see that this is exactly the consequence of the monetary nature of
>capitalism. Indeed, Marx's was a Monetary Theory of Production. The stress
>must be both on Monetary and on Production.
> I confess that I am uneasy with Duncan's stressing the ex post vs.
>ex ante view. How can we distinguish, ex post, production from
>circulation? And as I urged some time ago on the list, does not an ex-post
>view reduces itself to the value-form approac? I think that for Marx
>though value was eventually actualized in exchange, value was in a
>meaningful sense a potential magnitude before the selling of products; and
>that Marx also thought that in the capitalist totality there was a
>dominance of production. The whole of vol. 1 is the demonstration that
>value is the result of a specific kind of activity: abstract labour as
>actually really subsumed by capital in production. Of course this nuances
>have to disappear ex post, where what you see is only private
>labours turned out social when bought by money . Now, is not Capital, the
>three volumes, nothing but
>the *construction* of this ex post?
>Riccardo Bellofiore e-mail: bellofio@cisi.unito.it
>Department of Economics Tel: (39) -35- 277505 (direct)
>University of Bergamo (39) -35- 277501 (dept.)
>Piazza Rosate, 2 (39) -11- 5819619 (home)
>I-24129 Bergamo Fax: (39) -35- 249975