RE: Kliman's Draft EEA paper

andrew kliman (Andrew_Kliman@CLASSIC.MSN.COM)
Tue, 20 Jan 98 15:44:41 UT

A response to the PIAF, and to Chris's follow-up post that replied to Gil on
the designation "quasi-rent."

From: on behalf of C. J. Arthur
Sent: Friday, January 16, 1998 4:07 PM
Subject: Re: Kliman's Draft EEA paper

Chris: "Andrew might like to look at Ian Steedman's paper in New Left Review
151 in which he argues that in a totally automated economy there could be
positive profits."

I certainly would. Thanks.

Chris: "The numbers are fine. What is at issue is what they MEAN."

Although I haven't yet seen Steedman's piece, I strongly doubt that the
numbers are fine. I suspect that Steedman gives us a variation of some
example by Ricardo or Dmitriev or Frank Knight or Paul Samuelson (I thank
Rakesh for putting me on to the latter). These examples all go something like
the following: 100 units of a good (corn in Ricardo's case, a machine in
Dmitriev's, rice in Samuelson's) yield 110 units of the same good without use
of human labor (or scarce land). The "rate of profit" is the ratio of
physical surplus (10 units) to the amount advanced (100 units), i.e., 10%.

Nope. Under simultaneous valuation, profit is not 10 units of the "machine"
(or whatever). It is the PRICE of 10 units of the machine (as Dmitriev
recognized). If the price is zero, then there is no profit (also no capital
in value terms). And, of course, this is precisely what is at issue -- if no
human labor is used, are the machines or rice or corn WORTH anything? What is
the *substance* of value?

So it is necessary to prove that prices won't be zero. But they can't prove
this. It is important to realize that, among the solutions to the
simultaneous price/profit rate systems (of what Chris calls
"neo-Ricardianism," but *equally* of all the simultaneist Marxists), one
solution is ALWAYS that all prices are zero and the profit rate is undefined
(a ratio of zeroes).

As for the quasi-rent issue, I do not understand the point about production
and circulation times. Moreover, Chris's explanation presupposes the
existence of capital without alienated labor, which I question.

Finally, I think the quasi-rent response really fails to get at the heart of
the issue. All of the examples are really intended to prove that *non-labor
income* can be generated without human labor. Dmitriev and presumably
Steedman call this non-labor income "profit." Samuelson calls it "interest"
and "net income." Call it quasi-rent if you will. *If* it can exist without
exploitation of other people, *then*, whatever you call it, surplus-labor is
not necessary for the existence of non-labor income. Therefore, it is NOT the
sole source of non-labor income. There is at least one other, independent,
source: technology, the level of which allows a machine or a bushel of corn
or rice to yield more than is used up.

The claim that technology is an independent source of profit is (supposedly)
*demonstrated* by assuming that human labor isn't exploited. But if the
demonstrations are correct, then technology is *also* an independent source of
profit in the real world, in which human labor is exploited. Surplus-labor is
therefore, at most, only one source of profit (or interest or net income or

The logic of the simultaneist interpretations of Marx's value theory is that
positive prices together with a physical surplus or "net product" are
necessary and sufficient for positive profit. The extraction of surplus-labor
is relevant *only if* surplus-labor is necessary for prices to be positive
(and/or for physical surplus or "net product" to be positive, but we know that
this is false, since animals and plants can reproduce on an expanded scale
without the intervention of human labor).

Thus, to claim that surplus-labor is necessary for the existence of profit (or
whatever) under these interpretations, their advocates would have to stipulate
that prices (suitably defined) must be zero when human labor is not used in
production. This has not been done, to my knowledge. And, in any case, even
were this stipulation made, it is still the case, as I showed in my paper,
that the simultaneist interpretations imply that surplus-labor is not
*sufficient* for the existence of profit.

Andrew Kliman