Re: [OPE-L] Proposition #4

From: Jerry Levy (Gerald_A_Levy@MSN.COM)
Date: Fri Mar 09 2007 - 12:08:08 EST

> I'm okay with most of what you say, but some problems
> have begun to appear.

Hi Ajit:

OK, we'll discuss those problems in turn.  Some  of the
problems arose, I think, because I  am trying to have a
cross-paradigm discussion with you and I selected certain
terms and made certain claims in a particular sequence that
I wouldn't have made had I had this dialogue with someone
who had another perspective than yours.  But, at least one
of the differences also appears to be procedural/methodological
(see below).

> You write:
> "i) because all production takes the form of commodity
> production and all goods sold are commodities, this requires
> that both labor time and means of production take the form
> of commodities.  Define the amount of money which is used
> to purchase means of production as *constant capital* and
> the amount of money used to hire wage-workers  as
> *variable capital*."
> __________________________
> Two problems: First of all, if labor-time ia a
> commodity then labor-power is not a commodity. Taking
> labor-time as a commodity would create severe problem
> in developing the notion of surplus value to you. So
> you should clarify whether you mean that it is the
> labor-power that is a commodity, and if so, then
> define labor-power or maintain that labor-time is a
> commodity, but then explain how.

Yes, I think that labor power should be conceived of as a
commodity.   I was putting-off making the claim that labor
power is a commodity, though,  because I haven't defined
value yet.

So, for purposes of discussion (so that I don't get ahead of
myself) let's define labor power in the following way (as
per our agreement, not attributing the source to anyone
even though it was written by someone else):

* the physical and/or mental capacity to work which the
worker sells to capitalists in exchange for money wages
or a salary.

The *employment contract*, however,  specifies that in
exchange for the wage or salary capitalists have the right
to *control the labor* of the wage-worker during working
hours.  So, in that sense there is a necessary connection
between the purchase and sale of labor power and the
expenditure and control of  labor time.

> Secondly, and much more importantly, you cannot define
> constant capital in terms of money because it presumes
> that prices (or exchange ratios) of commodities are
> already known. But actually they are the unknown of
> your system. You cannot begin by presuming your
> unknown to be already known. In other words, the
> amount of capital cannot be defined prior to the
> knowledge of prices (or exchange ratios).

I think this reflects a different understanding on our parts of
what I am trying to do.  I am not trying to solve a mathematical
problem and the issue of the quantity of unknowns in "my"
system is not my concern now.  In other words, I am not
going to be presenting a formal mathematical model.  Rather,
I am simply going to be explaining from my perspective the
relation between different characteristics of  the subject.
In other words, I am trying to explain how certain characteristics
are inter-related and associated with each other. In so doing,
I  expect in due course that  you will be able to identify what you
believe are problems with the propositions that I advance
and I can address what you see as problems and we can take it
from there.  What I am particularly curious about is how far we
will  be able to proceed before irreconcilable differences emerge.

> You further say:
> "k) since commodities are produced with the intention
> of being sold,
> they
> must also have an *exchange-value*.  Although the
> exchange-value of
> commodities is  *presumed* (by the seller) before sale
> based on past
> transactions,  it is only *known*  once it has been
> sold on the market."
> ______________________
> Since you have already defined *exchange ratios*, the
> meaning of the new term *exchange value* is not clear.

There can be exchange-ratios even without commodity
production and money.  E.g. exchange ratios can develop
in a barter economy.  But, we are discussing a system in
which there are commodities, including a money commodity
in the form of gold.  So, I  am saying that *exchange-value*
is a quantitative measure of the relative value of commodities
expressed in money.

> It is also not clear what is the relevance of "presumptions"
> of sellers etc.

It is a consequence of the definition which was cited for
commodities: recall that commodities are produced with
the *intention* of being sold.   Simply because capitalists
intend to sell commodities does not mean that they will be
able to.  Furthermore, simply because they intend to sell
commodities at a certain time, place, and price does not
mean that they will be able to.

This *uncertainty* and *risk* is a consequence of the
inherent nature of commodities and markets.  If you require
further explanation for why there is uncertainty associated with
markets (for all buyers and sellers, assuming competitive conditions)
then I will elaborate.

In solidarity, Jerry

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