Re: [OPE-L] The Use-Value & SNLT Question

From: Jerry Levy (Gerald_A_Levy@MSN.COM)
Date: Tue Apr 10 2007 - 09:28:58 EDT

> Yes, both Ricardo and Marx said, "no use-value, no value".  And it
> seems fair enough to say that if a capitalist produces something
> totally useless (for which the there's no demand even at a price
> of zero) then the labour applied is just wasted, and created no
> value.
> But this is not a common occurrence, not an economically
> significant phenomenon.

Hi Allin:

Since you've conceded the theoretical point,  all that remains is
the historical and empirical question concerning how frequently
this happens.

> Jerry, you talk about commodities "not
> being sold" but it's very rare that a commodity couldn't be sold
> _at any price_.

I think it's more common than you recognize.

To begin with, there are entire categories of products (especially
agricultural products) where the use-value degrades over time to
the point where the entire product can  "spoil".  Of course, Marx
(and classical political economy) was quite aware of this type of
situation.   What has to remembered is that commodities typically
have a  *specific material form* and the value (and use-value and
exchange-value) of those commodities  can depend on the preservation
of that material form.

The use-value of a product also depends on whether the commodity
is _currently_  socially viewed as being useful and this can change.

There is also moral depreciation.  If a product can not be sold for what
it was designed to be and is instead sold as scrap, then there is value
lost.  Yes, it would have use-value _as scrap_ but there would be a loss of
use-value and value and this would be reflected in a lower exchange

> What is fairly common is that either demand falls
> short of expectation, or supply on the part of competitors exceeds
> expectation, so that a given capitalist's output can't be sold at
> a price that yields the expected profit (or perhaps, any profit at
> all).  Marx's analysis of this situation is that the commodity
> sells below its value (or price of production), not that the value
> of the commodity itself is reduced ex post by the shortfall of
> demand or excess of supply.
> Furthermore, even some commodities that really "can't be sold" (at
> least, for fear of "spoiling the market") play a definite economic
> role, and it's a dubious exercise to read back from their
> non-saleability to the conclusion that the labour applied was not
> socially necessary.  I have two sorts of cases in mind.
> 1. In manufacturing.  For example, a proportion of computer memory
> chips don't pass quality control and are discarded.  Does that
> mean the labour that went into them was not socially necessary?


In the passage I cited earlier (Vol. 1, Penguin ed., p. 303) Marx
recognizes this:

"... all wasteful consumption of raw material or instruments of labour
is strictly forbidden, because what is wasted in this way represents a
superfluous expenditure of quantities of objectified labour, labour that
does not count in the product or enter into its value".

It may have been the case, though, that Marx underestimated the
extent to which this occurs in practice.  The "penal code" that he refers
to is often violated.

> No, because we don't know in advance which chips will fail.  I
> suppose that in principle one could set up a production process
> that would have no failures, but if the labour-time per chip of
> such a process would exceed the labour-time per chip of a process
> with some wastage, then (with only apparent paradox) it's the
> no-failure process that wastes labour.
> 2. Sectors that are expected to produce novelties and have to
> deal with relatively unpredictable consumer demand.  Example: the
> fashion trade.  A fashion house comes up with range of styles and
> fabrics for the current season.  Some sell well, some do not.
> Towards the end of the season they can try selling the left-overs
> at deeply discounted prices, sell them as rags, or just discard
> them.

Yes, there is a loss of value and SNLT if the cloths are sold as
rags or discarded  The loss in value was due to the loss of use-

> Or a quality restaurant: they offer maybe a dozen dishes
> each night.  They have to prepare enough of each so that not too
> many diners will be told they can't have what they want.  But
> inevitably this means that some food will be unsold at the end of
> the night.  In both of these case a measure of "waste" is
> predictable, but precisely which items will go to waste is
> unknown.

This is an interesting example, best conceived in the following
way: the meals are sold above their value in an effort to ensure
that there is an average or higher individual rate of profit.  That
is, the restaurant assumes (based on past experience) that a certain
quantity of materials will indeed be wasted and takes this cost
into account in their pricing.

> Like the manufacturing example, a degree of waste is part of the
> normal cost.  It's silly to say, ex post, that the seamstresses
> who sewed the unsold dresses, or the chefs who prepared the unsold
> dishes, "didn't create any value" -- their labour was a necessary
> part of the enterprise as a whole, without which the fashion house
> or restaurant could not have presented an adequate range of
> offerings, in a market that expects choice.

Why is it "silly" to say that -- because of market conditions -- the
labour of the seamstress who sewed unsold dresses has been
wasted?  In _actual fact_ that labour has been shown to be

> If you like, there's a "socially necessary" degree of wastage in
> many sectors of the economy.
> A restaurant that wastes _too much_
> food, a fashion house that produces _too many_ non-selling lines,
> a chip plant that produces _too many_ dud chips, relative to the
> social average, will go out of business.

You are making some assumptions here about the character of
competition.   Where there is product differentiation and oligopolistic
markets, then what you are suggesting will often not occur.  Thus,
a restaurant can waste tons of food but if they have the ability to
mark-up price over costs to a great enough degree then that
waste won't run them out of business.   Ditto for the fashion industry
(where the degree of mark-up is typically very high -- *well*
above the average rate of profit).  Ditto the chip producer, depending
on whether there are substitute chips of the same use-value being
sold by other firms (which may or may not be the case).   Moreover,
a  long-term trend under late capitalism has been an increasing extent to
which markets have come to be dominated by oligopolies: thus, what
you see as being rare is ever more commonplace.

In solidarity, Jerry

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