[OPE-L] the "unequal exchange" controversy

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Sun Jan 01 2006 - 08:45:11 EST

Incidentally, Anwar Shaikh has a useful comment on unequal exchange:

"Like Steuart, Marx was perfectly well aware that unequal exchange gives
rise to what he called profit-on-alienation, which was the foundation of
merchant capitalism... It is for this very reason that he begins his
analysis of industrial capitalism on the initial assumption that all
exchange is equal, which he takes to mean exchange at prices proportional to
labor values. This allows him to show that industrial profit is grounded in
the extraction of surplus labor, not in the transfer of wealth via unequal
exchange. But then, when we move on to a consideration of prices which are
no longer proportional to labour values (e.g. prices of production), unequal
exchange is once again part of the issue, and aggregate profit now reflects
both profit-upon-alienation as well as profit-on-surplus value. It is
possible on this basis to explain the famous 'transformation problem' puzzle
in which aggregate surplus value and profit differ when we move from labor
values to prices of production, holding the value of money (sum of prices)
constant. It can be shown that this difference is strictly limited, and
arises from transfers into or out of the circuit of capital flows."

I assume that with "the circuit of capital flows" Shaikh means the the
circuits applying to the sphere of production, i.e. purchase of inputs and
sales of outputs.

In a similar vein, Friedrich Engels commented:

"Whence comes this surplus-value? It cannot come either from the buyer
buying the commodities under their value, or from the seller selling them
above their value. For in both cases the gains and the losses of each
individual cancel each other, as each individual is in turn buyer and
seller. Nor can it come from cheating, for though cheating can enrich one
person at the expense of another, it cannot increase the total sum possessed
by both, and therefore cannot augment the sum of the values in circulation.
(...) This problem must be solved, and it must be solved in a purely
economic way, excluding all cheating and the intervention of any force-the
problem being: how is it possible constantly to sell dearer than one has
bought, even on the hypothesis that equal values are always exchanged for
equal values? "


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