[OPE-L:7328] [OPE-L:857] Re: Re: Re: abstract labour

Rakesh Bhandari (bhandari@phoenix.Princeton.EDU)
Thu, 8 Apr 1999 11:53:19 -0400 (EDT)

Ajit, for an expert, I don't think you are acting in good faith. Why do you
have to turn to Foley to comment on how the contradiction between use
value vs. unit value fits into your interpretation of part one and how it
undergirds the later theory of the falling profit rate. Turn to Ricardo's
critique of Say in the chapter "Value and Riches". Labor saving machinery
can increase the use values available to society while decreasing the
exchange value produced (on the assumption of a labor expended theory of
value of course). "As soon as by the aid of machinery, or by the knowledge
of natural philosophy, you oblige natural agents to do the work which was
before done by man, the exchangeable value of such work falls accordingly."
(Sraffa's ed, 285) Note that *Capital* I (footnote 48 on p. 755) Marx then
defends Ricardo here against Say's rebuttal in Capital I. see fn 48
beginning on page 755.

Now as for your other points, you don't clarify why the consumption of
labor power being determined by class struggle doesn't mean that the
capitalist won't purchase it unless through its use he can extract more
value than its exchange value.

I do not understand your elaboration of the implications of Geras'
argument, esp as a critique of Marx. This is a good faith failure; if
people think I am being purposefully obtuse, I welcome their defense of

>Again my main argument is that Marx does not have any theory of
>supply adjustment in the case of labor-power, which is contrary to
>what a commodity is supposed to be.

You mean commodities are not ever generally overproduced? You must know
that generalised crises, where all branches of production suffer from a
shortage of demand simultaneously, are indeed possible. Ricardo and Say
were blind to this. Marx chapter on money is an attempt to get at the
fundamentals of why they got is so wrong in light of the crises that shook
Britain. Confined at this point to simple circulation, Marx tries to show
how money creates the possibility for a general glut.

> Classical economists did have a
>supply mechanism for labor-power through their Malthusian theory of
>population, which Marx had rejected.

A related point: as for whether Ricardo accepted a biological subsistence
theory of the wage that was later taken over by Lasalle and finally
rejected by Marx, there is an important discussion to be had here.

I have made mistakes in this discussion: I agree that a uniform profit rate
is not an unreasonable assumption in a Sraffian model of a totally
automated economy; and I agree that I should have not conflated technical
progress with viable technical change in the discussions of the falling
profit rate theory.

Now let me pose some questions, instead of arguments:

What is the argument Marx is making about why Ricardo's money theory
undergirded his acceptance of Say's Law and belief generally in the
impossibility of general gluts?

How does Marx develop a rival theory of money on the basis of the duality
of labor and its externalisation in commodities to one side and money to
the other? Why does this theory of money allow for the possibility of a
general glut while not explaining why it does actually obtain with periodic
force in capitalist development?

Or to put the question differently: what is it about money that it can be
so panted after that it leaves an overproduction of all the other
commodities to the other side of it? How do we explain its fetish power?

This is the most complicated of arguments. You are right that I have not
answered these questions in my own words--I think Blake made the successful
attempt in the textbooks I have read. Sweezy is not even in the running; he
doesn't analyze the derivation of the money form. The problem is the above
questions can't even arise given your interpretation of part I. This is
what I am criticizing.

I am reminding you that you say nothing about these questions in your
analysis of part one, just as Steedman seems not to recognize the critique
of money and partial glut theory in Marx's treatment of Ricardo.

Our argument is about whether part one is crucial to understanding the
theory of surplus, reproduction and crisis developed later on--this is the
argument you have suggested. The quote from Volume III shows that the
money theory developed in part I is used to understand the monetary aspects
of a universal glut even after the use of credit has become widespread.