Re: [OPE-L] SV: [OPE-L] what is irrational in the functioning of capitalism?

From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Thu Nov 30 2006 - 08:53:21 EST

--- Ian Wright <wrighti@ACM.ORG> wrote:

> Hi Ajit
> I'm looking forward to your book.
> > Now, follow Marx's logic to the
> > extreme. Allow technical change to continuously
> > displace labor to the extent that the live labor's
> > role in the production process becomes negligible.
> OK.
> > At this limiting case, if you apply Marx's
> exercise then
> > either you have to argue that the value of all the
> > commodities must tend to zero and the rate of
> surplus
> > value must tend to infinity;
> As the direct labour coefficients approach the zero
> vector the value
> vector of all commodities will also tend to the zero
> vector. Hence
> both the value of the surplus (S) tends to zero, and
> the value of
> variable capital (V) tends to zero. The rate of
> surplus-value is S/V.
> But you cannot immediately conclude, as both
> numerator and denominator
> tend to zero, their ratio tends to infinity. Limits
> don't work like
> this. So I echo Paul's warning.
> From the point of view of economic definition, it
> seems to me that,
> without labour, the rate of surplus-value must be
> undefined.
Ian, the point I'm making has very little to do with
differential calculus. Again the point is simple.
Imagine a large capitalist economy which produces a
huge amount of surplus however employs just a few
thousand workers (since you guys are not ready to
accept zero worker situation). Now, if you apply
Marx's calculation here, then the labor-values of
commodities would be close to zero and if wages are
what is necessary to reproduce the labor-power, then
the rate of profits would be quite high, and this high
rate of profits (within Marx's calculations) could
only be explained by a very high rate of surplus
value. That's why I said in the limiting case the rate
of surplus value will tend to infiniti. I know that
0/0 is mathematically undefined, and if you put value
= 0, then surplus value will also be 0.
> I like your thought experiment. But Introducing the
> concept of taking
> limits I think confuses the issue. You state your
> point more clearly
> when you say:
> > That is why for Marx when surplus labor in the
> whole economy tends
> > to zero, the rate of profits must also tend to
> zero.
> > But, my argument is that, it is simply not true.
> The
> > physical surplus in the whole economy may not tend
> to
> > zero, and thus you can have an healthy positive
> rate
> > of profits even when the values and surplus value
> tend
> > to zero. In other words, the secret of surplus
> does
> > not reside in surplus labor.
> You ask us to imagine the logical possibility of an
> economy without
> labour that produces a surplus. It also has prices.
> And a capitalist
> class enjoying profits. Hence, profits cannot be a
> value form of
> surplus labour. This is the argument in a nutshell,
> no?
> I think your thought experiment takes us too far
> from economic reality
> to tell us anything crucial. First, there's no
> necessity for the
> value-form unless there is a necessity to allocate
> social labour in
> response to changes in technique and changes in
> consumption in a
> distributed and unplanned manner. Without human
> labour (or something
> like it with its causal powers) then no prices and
> hence no profits.
This is where you go wrong. An economy can be divided
into various sectors simply for technical reasons and
also private property is not contingent upon
wage-labor or labor of any kind. You can have private
property with sectoral division of the economy, where
market would exist with supply and demand for
commodities and competition among the producers.
Nothing of the market mechanics is contingent on the
existence of wage-labor. That's why the paradigmatic
explanation of the market in the general equilibrium
framework, assumes no wage labor or even production.
You just begin with given endowments (that is the law
of private property).
> Second, I don't think your example is a state that
> can conceivably be
> attained under capitalism. Capitalists compete with
> each other. To do
> that they need to employ the creative power of
> labour. Any capital
> that reduced labour to zero will eventually have its
> constant capital
> rendered obsolete. So the "end state" of fully
> realised
> labour-displacing technical change cannot be on any
> feasible
> trajectory of capitalist dynamics.
This makes no sense to me. Capitalists are in business
to make profits (M-M'), if a capitalist finds that
s/he can increase her/his profit by introducing a
technique that displaces labor, then why wouln't s/he
do it? As a matter of fact Marx's argument is that
actually the dynamics of capitalism is such that this
will keep happening--that's why my limiting case of
this dynamics is something Marxists cannot close their
eyes to.

Again, I do not understand why constant capita (by
which I understand you mean machines and raw
materials) will be rendered obsolete if there is no
wage-labor in the system?
> But putting the unreality aside for the sake of
> logical possibilities
> I think your example does highlight an issue: In
> static models, of the
> Sraffian/Leontief kind, it's simply not possible to
> theorise the
> production of new surplus-value, i.e. labour-power
> as the cause of
> surplus-value. At your "end state" we have
> capitalists enjoying a
> physical surplus, who continue to use money despite
> the unchanging
> nature of production, having quite forgotten who it
> was that built up
> all that constant capital that outputs a physical
> surplus. I'd say
> there's a physical surplus with a vestigial
> value-form. But no
> production of surplus-value.
The point is: can there be surplus production without
surplus labor? You seem to say, yes. And that's what
is my point. It becomes important because in the
history of political economy Marx is the first major
political economists who explicitly argues for a
causal relationship of surplus with (surplus)labor.
This is nothing but metaphysical. A lot of Marxist
intellectual energy has been stuck in the mud for a
long time simply because it confuses a metaphysical
notion with a scientific one. And Sraffa shows you a
way out of the mud. Cheers, ajit sinha

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