Tuesday, November 13, 2007

... at least I am not a marxist

& I read this on Leninushka's blog, as an explanation of Karl Marx's notion of surplus value:

"Let us recall the gist of Marx's notion of exploitation: exploitation is not simply opposed to justice - Marx's point is not that workers are exploited because they are not paid the full value of their work. The central thesis of Marx's notion of 'surplus-value' is that a worker is exploited even when he is 'fully paid'; exploitation is thus not opposed to the 'just' equivalent exchange; it functions, rather, as its point of inherent exception - there is one commodity (the workforce) which is exploited precisely when it is 'paid its full value'. (The further point not to be missed is that the production of this excess is strictly equivalent to the universalization of the exchange-function: the moment the exchange-function is universalized - that is, the moment it becomes the structuring principle of the whole of economic life - the exception emerges, since at this point the workforce itself becomes a commodity exchanged on the market. Marx in effect announces here the Lacanian notion of the Universal which involves a constitutive exception.) The basic premise of symptomal reading is thus that every ideological universality necessarily gives rise to a particular 'extimate' element, to an element which - precisely as an inherent, necessary product of the process designated by the universality - simultaneously undermines it: the symptom is an example which subverts the Universal whose example it is."

(from Dr Žižek's Ticklish Subject)

According to Marx's theory, as laid out in Capital, the remuneration of the predominant form of labour, disqualified or undifferentiated labour, sold on the open market and so remunerated its "true" market value will tend to a conventional minimum, just enough to reproduce the worker as worker. The product of labour will likewise be remunerated its value as realised on the open market, which according to Marx, following the example of Ricardo, will be equivalent to the value of the labour of which it is comprised. Surplus value, which accrues to the capitalist, represents the difference of these amounts.

According to Baran and Sweezy's definition, surplus value is "the difference between total social output and the socially necessary costs of producing it", theoretically this could apply to situations other than that described by Marx.

This theory is eminently criticiseable, (though professional economists tend to prefer to ignore it altogether). Nitzan and Bichler describe the labour theory of value, where labour produces its value but is paid the value of its own production as "a dangerously circular notion". Certainly one wonders why the value of each commodity isn't bid down by "competitive markets" to the value of reproducing productive labour, so value added by labour equals the remuneration of labour and the neoclassical model holds*.

Karl Korsch supposed that the laws of motion of the capitalist system disclosed by Marx's model were evidently correct but that the presupposition underlying it should realistically be conditions of monopoly rather than pure competition (Sweezy concurred with this view). The tendency of capitalists to not compete on price would be a consequence of (a high degree of) monopoly, all other conditions would hold.

The crucial advance of Marx's theory over that of the economists of his time, and which their successors have conspicuously failed to make good, is to describe a dynamic economy in which both the remuneration of labour and capital are "real" outputs.

Žižek's reading of Marx, which to be fair to its context, is surely meant to be an "against the grain" piece of belle-lettrism, sets up an integral ambiguity on the phrase:

"the full value of their work"

which could mean either:

"the full value of the remuneration of their work"

or "the full value of the product of their work"

and "justice" could mean

"the most equitable"

or "according to the law"

...hence there's a number of meanings suggested here that seem more exciting than the only one that can be reconciled with what Marx writes in Capital: that workers are paid the going rate and that this is in accordance with the law of the land. This contrivance of ambiguity where none is necessary compliments and reinforces what one supposes to be the background impression of Marx and his work as evoked through the wider cultural and educational apparatus, as fundamentally ambivalent, both validated and discredited. This ambivalence seems to be often indicated, where our ideology "crystallises" into the form of the individual. And it is surely in this respect that Marx announces Lacan.

*The objection to neoclassical economics here seems to run something like this: while one business or one business sector could reduce its prices to merely cover inputs, this behaviour can't be aggregated to the level of the whole economy since price cuts are only relative price cuts (some players gain, some lose) and don't have the effect of lowering total output, while neoclassical economics considers the lowering of prices to be consistant with output being added to.

54 comments:

Le Colonel Chabert said...

Nitzan and Bichler describe the labour theory of value, where labour produces its value but is paid the value of its own production as "a dangerously circular notion".

...trying to read a materialist explanation in an idealist manner, be the model psychoanalysis or classic econ, is always a bad idea.

It's not a "circular notion" at all.

(But the reproduction of the material world has a "circular" feature, as unpleasant as this may be to those favouring the convenient qualities of theological abstractions.)

Le Colonel Chabert said...

classic=classical

Le Colonel Chabert said...

i suspect the compulsive "paradox" production, concocting with some simple techniques made possible by the qualities of vernacular language the appearances of paradoxes where there is no paradox, is nothing but the daily war on rationality, and the effort to sustain the illusion of a metaphysical supernatural plane which is the object of the occult wisdom of this priesthood and its raison d'être.

Le Colonel Chabert said...

"Certainly one wonders why the value of each commodity isn't bid down by "competitive markets" to the value of reproducing productive labour, so value added by labour equals the remuneration of labour and the Ricardian model holds."

well it is; this is part of the reason the rate of profit has a tendency to fall (prices of goods to decline toward actual costs of production) and to equalise (due to capital running around seeking better returns since this is happening). then action has to be taken against the first tendency, consequently: the imperative to increase productivity (mechanisation, further wage depressions by force) and drivers of other behaviours of capital, including the periodic support for state subsidising of buying power of consumer markets....

catmint said...

Certainly one wonders why the value of each commodity isn't bid down by "competitive markets" to the value of reproducing productive labour

Hello Chabert

yes, I think you could legitimately object to the "competitive market" theory, (even admitting for the sake of argument that capitalists do compete so violently on price), insofar as profits are a "real" output of the capitalist system and that capitalists seek investment opportunities for them at least as vociferously as they seek to cut prices. So the whole system keeps expanding even as it seeks to correct itself. And from this point of view the idea of the neoclassical economists of capitalism simply bidding away its surplus certainly does appear a theological abstraction.

This is all covered by Marx quite adequately. But it seems to me that his equation of the exchange value of a commodity with the value of the labour of which it is composed isn't meant as a tautology: this is just what the value of labour is. And from this point of view the difference between the value of labour and the remuneration of labour power would be the result of monopolistic practices or "grit" in the machine.

Now, if these conditions are accepted as the basis of surplus value rather than surplus value being "endemic" it opens the door slightly to the bourgeois economists with their model of a capitalism without surplus value. I've just said "rather than surplus value being endemic" but of course surplus value is absolutely endemic to capitalism. Capitalism has never existed without it. I'm reminded here of the status of "nature" and "natural" civillisations in anthropology.

catmint said...

i suspect the compulsive "paradox" production, concocting with some simple techniques made possible by the qualities of vernacular language the appearances of paradoxes where there is no paradox, is nothing but the daily war on rationality, and the effort to sustain the illusion of a metaphysical supernatural plane which is the object of the occult wisdom of this priesthood and its raison d'être.

of course I agree about our illustrious author. I've expressed my misgivings about Marx's theory as I understand it. But it isn't hard to understand what Marx meant by surplus value, it's very simple.

catmint said...

this is the quotation from Nitzan & Bichler's Global Political Economy of Israel:

"Marx never tried to reason profit by the productivity of capital. On the contrary, profit, he argued, came through capitalist exploitation., which forced workers, the sole creators of the product, to accept only a portion of what they made. Yet, although Marx properly placed capitalist power at the very centre of his theory, his treatment of such power was incomplete, and ultimately inconsistant. Indeed, while he was the first to emphasise broader power processes, such as the concentration and centralisation of capital and the growing role of the state, these never found their way into the analytical formulation of his Labour Theory of Value - and nor could they; the latter theory depended crucially on the assumptions of fee competition and the unfettered flow of capital and labour, and these assumptions would be quickly violated if power were allowed in the picture. In the final analysis, profit (or "surplus value") in Marx's scheme was determined as a residual between the total output of labour and the "socially necessary" cost of reproducing its labour power - an ingenious but dangerously circular concept."

Le Colonel Chabert said...

" equation of the exchange value of a commodity with the value of the labour of which it is composed isn't meant as a tautology: this is just what the value of labour is."

yeah it's the marginal cost of reproducing a person for one working day.

its not a tautology. a lioness can kill a zebra in half an hour. she doesn't eat a zebra every half hour. she feeds the babies and the king, with plenty of time for lounging.

Le Colonel Chabert said...

"In the final analysis, profit (or "surplus value") in Marx's scheme was determined as a residual between the total output of labour and the "socially necessary" cost of reproducing its labour power - an ingenious but dangerously circular concept"

this is just wrong; labour power the commodity is valued as a marginal cost, the reproduction of a socially produced, existing labourer for one day, or 24 hours. Marginal costs of people production are low. That's the exchange value of labour power.

The use value of labour power to the capitalist is something else. It is the capabilities of people to create use values - to labour productively and transform nature and the products of previous labour. These capacities are not derived from 2000 calaories and some clothes. You can feed 2000 calories to a cat and give it some clothes, it doesn't make it capable of doing human labour.

Surplus value is the difference between the exchange value of labour power - marginal costs of one day survival of human being, given social standards - and the use value of labour. The use value of labour is a material given. Like the lioness' ability to kill more than she can eat, the human being can cook more than she can eat, or make more than she can wear, etc. In no area of nature are mammals limited to producing or procuring only enough for their own survival, if working all waking hours on this. Were this so, species would die, since young cannot feed themselves. And people have even more capacities for surplus production than other animals, and for accumulating it. In the society in which capitalism initially grew, peasants reproduced themselves and kept the lords in luxury on a three to four hour work day. There's no paradox of the difference between the exchange value of labour power - its labour value (subject to manipulation by force and other matters, a very volatile commodity) - and its use value to the capitalist.

Le Colonel Chabert said...

" I think you could legitimately object to the "competitive market" theory, (even admitting for the sake of argument that capitalists do compete so violently on price), insofar as profits are a "real" output of the capitalist system and that capitalists seek investment opportunities for them at least as vociferously as they seek to cut prices. So the whole system keeps expanding even as it seeks to correct itself. "

yeah. the competition at the whilesale retail stage - the competition of consumler goods in markets - is not really significant, though it does exist; its an obsession for some economists, because its a kind of nifty anecdote; the really significant competition between capitalists is for capital, for finance.

catmint said...

Chabert, I notice actually that the argument I put forward about the hypothetical "bidding away" of surplus value has another flaw in it since it deals adequately with what might happen in one business run in this way but it's not transferable to the whole economy. So it seems reasonable (theoretically) for a business to be bid down to just the value of labour it employs (considering just this factor). But if you consider output of tangible commodities these aren't going to be "bid down".

So if society employs 100 people and produces 400,000 "calories" and the conventional minimum pay, which equals remuneration is 2000 calories per worker, the hypothetical competitive market can't "bid away" the surplus 200,000 calories.

On this basis each commodity would have a price expressible in labour greater than its cost of production and the whole of Marx's theory would hold. And in an "elegant" form rather than the "inelegant" form put forward by Karl Korsch and Paul Sweezy.

Le Colonel Chabert said...

"On this basis each commodity would have a price expressible in labour greater than its cost of production and the whole of Marx's theory would hold."

right, because value is the social relation between commodities as "crystallised social labour". You start with the total product; the relative values are the relations between discrete elements. the value of a shirt is measured in rice, etc. It's not "circular" but contextual and social:

The value of a single commodity, the linen, for example, is now expressed in terms of numberless other elements of the world of commodities. Every other commodity now becomes a mirror of the linen’s value.[25] It is thus, that for the first time, this value shows itself in its true light as a congelation of undifferentiated human labour. For the labour that creates it, now stands expressly revealed, as labour that ranks equally with every other sort of human labour, no matter what its form, whether tailoring, ploughing, mining, &c., and no matter, therefore, whether it is realised in coats, corn, iron, or gold. The linen, by virtue of the form of its value, now stands in a social relation, no longer with only one other kind of commodity, but with the whole world of commodities. As a commodity, it is a citizen of that world. At the same time, the interminable series of value equations implies, that as regards the value of a commodity, it is a matter of indifference under what particular form, or kind, of use value it appears. (capital vol 1)

Le Colonel Chabert said...

elegant and simple and accurate, really.

Le Colonel Chabert said...

the chief ideological effect of all these bogus critiques of the LTOV is the absolute prohibition they instill of the concept of leisure. Leisure or idleness, unproductive time, is so unnatural an idea, so taboo, it is unimaginagble in the calculations. Therefore we begin with the idea of a human being who must obviously spend his entire waking existence working just to reproduce himself. That is the given. Then obviously there can be no surplus, no difference between what he needs and what he can make, from him. It must therefore be authority, the ruling class, capital, and their magic that creates the surplus. Because the idea of a paradox or circularity presupposes and implies just this alternative - the human being whose entire existence and ever moment of consciuosness must be devoted simply to the labour of self sustainment. Without this assumption there is no puzzle at all, no "confusion" about Marx' account. It is a curious achievement, how deeply embedded this assumptin is without it ever being articulated explicitly. But it goes along with individualism, too, which provides all the anecdotes, a worker, what he earns, what he produces, as if this is even imaginable individually, as if all workers, work and product is not inescapably social and in nature as well.

catmint said...

"Then obviously there can be no surplus, no difference between what he needs and what he can make, from him."

yes, this is "Gladstonian penny-wisdom"

on the other hand accepting the legitimacy of the this formula, or something like it, that surplus value is

"the difference between total social output and the socially necessary costs of producing it"

means making a critical decision as to the social necessity of rents, profits etc - that all activity isn't equally necessary social activity.

The individualism of neoclassical economics seems to have an unfortunate tendency to progress from being a useful but flawed methodological tool to serving as the basis of a whole worldview, a whole cosmology. The consequences and reasons for this are clear enough if anyone cares to look into it objectively.

catmint said...

thanks for your input, I found this discussion useful

I hope things are OK with you

my links have been wiped out from messing with the template though I'll sort it out at some point

Le Colonel Chabert said...

I'm good, how are you? The new digs here disoriented me! it's like a flashforward, or like something from that jane campion portrait of a lady. I hear the Austin Powers theme with these dots!

"means making a critical decision as to the social necessity of rents, profits etc - that all activity isn't equally necessary social activity. "

the "socially necessary" refers just to the making of a commodity, that is, if you make a commodity in some unusually abour intensive way, it does not make your commodity more valuable than those made in the normal way, with the socially necessary - minimum - amount of labour in production of that commodity. Say envelopes. Paper envelopes - in this industry, there is a way these are made, a certain mechanisation, which means that in general One Doodlet of labour per envelope. If you happen to make envelopes at home by hand, in some more labour intensive way, cutting down the trees and making the paper, so every envelope takes you a yea(r to make, your envelope is not more valuable than the envelope made in the normal way, just because more concrete labour went into it. Thye value of the envelope is the socially necessary abstract labour for this commodity across the whole industry which it produces it. You are doing socially unnecessary labour - you are doing things in an eccentric and difficult way, and this extra labour you put in over and above the labour typically required to make the envelope doesn't produce more value in the envelope.

that's all that the "socially necessary labour" means - the amount typically needed per commodity in the given state of technology and industrial conditions.

Le Colonel Chabert said...

its not a moral judgement or about what people need in society, its just about the labour value of commodities, how it is determined - you can make a Thing by hand, but if normally across the whole of thing production the same thing is made with a certain mechanisation, your particular thing is not more valuable than the thing with fewer hours of living labour in it. The values are determined abstract labour, socially necessary quanta of abstract labour per commodity, not how much actual concrete labour time was spent on something. not so many years ago there were copy centers with copymachines you had to load every page, and others which took the stack of paper and fed it and made the copy. But the value of the copy was the same: the proliferation of the machines with the autofeed of the stack of paper set the "socially necessary" labour involved in making a copy of a two hundred page document. If someone in the copyshop has to insert each page face down on the scanner by hand today, the copy is no more valuable than had it been made on the faster machine. that's all that's meant there.

catmint said...

"I hear the Austin Powers theme with these dots!"

yes, well this is BLOGGER. The William Morris "rabbit" design was starting to make me feel like I was waking up in a victorian bedsit, where I'd just sat and smoked 40 Superkings. The historical 00s style is Werckmeister Harmonies or Murakami's Norwegian Wood, by my reckoning. They maybe don't want to give away this stuff for free.

catmint said...

"the difference between total social output and the socially necessary costs of producing it"

my understanding of this is that Baran & Sweezy are arguing that surplus value is socially unneccesary, and from this that everything that's paid out of surplus value is socially unnecessary.

They are arguing against a perspective you could take up that the surplus a business generates: interest, rent, and profit, really represents a compound of socially necessary labour costs, hence there isn't any real surplus and we're back in the world of neoclassical econ.

It's this sort of argument that concerns whether the "labour" of the village priest is "socially necessary productive labour". In this respect you have to make a critical decision that it might be necessary for this particular society but not for its technical basis per se.

catmint said...

I mean, you could have a Spinozist economics or a Zen economics where everything is equally necessary for everything else etc

Le Colonel Chabert said...

Baran and Sweezy see the social surplus as just the capital with noplace to go, with no opportunity for reinvestment; then in the 80s wiith the beginning of the explosion of the financial sector, and the explosion of telecom/entertainment, that's the solution to the surplus absorption problem they detect.

I think there is good stuff in Monopoly Capital but I'm not persuaded it really grasps everything. But that's another discussion. But as to their concept of the social surplus, in this sense I think one could describe it as just everything that's here today that wasn't here yesterday - the increase of total undestroyed, unconsumed stuff. So if yesterday there were 100 people, 10 doodlets of man made stuff including capital, and a forest with sixc trees, the the labour over above the replacement/matinenance/reproduction of this, the labour involved in seeing to it that today there are 101 people, 11 doodlets and seven trees in the forest, is the labour above that socially necessary to reproduction. They basically mean the labour involved in the creation of new wealth, the surplus which in their view in monopoly capitalism is in danger of lying idle, since there isn't enough luxury goods consumption, advertising and other distribution costs, to burn it up basically. But then by the 80s, there is - it goes to the hugely expanded financial sector. There's an immense amount of capital just swirling around in the casinos for capitalists.

catmint said...

"But then by the 80s, there is - it goes to the hugely expanded financial sector. There's an immense amount of capital just swirling around in the casinos for capitalists."

yes, I think that's right. This is in the Nitzan/Bichler book - the world economy tipped over from the "depth" cycle of the 70s consistant with stagflaction and the entrenchment of big capital to a relatively more competitive "breadth" phase of green field growth: finance, telecoms, the service industries. I think your disagreement with both these books is exactly their adherence to a left wing version of classical econ. rather than "orthodox marxism". As trained bourgeois economists they seem to have developed an almost visceral aversion to LTOV.

It occurs to me that if the point of this is to be able to consider neoliberalism in its historical context then it shouldn't be considered as a "master narrative" or something like that, a global zeitgeist. Rather its an ideology built around longer term political/business practices and consistant with:

1. second rank powers (e.g. France today)

2. the global economy in a phase of green field growth

catmint said...

"neoliberalism in its historical context"

...or it's not, I'll reconsider this

Le Colonel Chabert said...

i think baran and sweezy, and other left keynesians, did a lot of good analysis, as indeed keynes himself surely understood a lot about capitalism. but the tendency is to give capital not enough credit for having political force and class consciousness, the ability to understand the problems very well indeed & act in concert when necessary, politically, to adjust. but as you say they are economists and working on a model and then going back to the history to see the model's forces doing their thing. still with sweezy it effected his account of the transition to capitalism as well; a little too much clockworkiness if you know what i mean, not enough people acting in their perceived self interest (in any class), not enough assumption that different people having different levels of understanding, different perspicacity, and different powers to further their interests and make compromises, etc. His account sort of depends on commercial capital, merchants profiting by arbitrage and doing politics with monarchs, sort of knowing one day it will be industrial and finance capital. It's a bit fabulous.

dejan said...

Catmit I will try to bite my lip and NOT poke the Cobra while she's feeding off the blood of her followers, so that I may actually contribute to this interesting discussion.

Meanwhile, if you want a logo or a style for your blog I'd be more happy to contribute - free of charge! This one is too 101 Dalmatians for your profile and besides it's a standard format.

catmint said...

"but the tendency is to give capital not enough credit for having political force and class consciousness"

yes, I think it's carried through from from the training and its methodology, it isn't lack of habituation with capital as it works in practice or bad faith. I was reading Nicos Poulantzas' Crisis of the Dictatorships before Monopoly Capital and it's striking how much they differ in approach. Poulantzas very much considers the bourgeoisie he deals with to operate as a "ruling class" rather than considering the operative social force to be "capitalism" with a more incidental "ruling class". Baran and Sweezy are really in line with the line of "economism" in the introductory section of their book but veer back toward the ruling class as a ruling class later on.

I think you're basically right, everyone who really looks into capitalism critically more or less concurs with this. We had this discussion a while ago with the "Daleks" post, where I was mildly critical, though not critical enough, of grad students and copy writers feeling apologetic about themselves being "the ruling class". The problem seems to be that ordinary cynicism + media discourse doesn't result in this sort of position (by my reckoning, and obviously this is context specific) but a kind of left wing neoliberalism.

catmint said...

...since I'm unfortunately averse to reading the business pages and statistical digests, from which you could derive a clearer picture of what's going on. I think this probably applies more generally.

catmint said...

"Meanwhile, if you want a logo or a style for your blog I'd be more happy to contribute - free of charge! This one is too 101 Dalmatians for your profile and besides it's a standard format."

that's very kind of you, but I don't think I've got much else I want to urgently inform the world about.

catmint said...

"I will try to bite my lip and NOT poke the Cobra while she's feeding off the blood of her followers"

you make me want to say in a Group Therapy Voice, with a kind of routinised concern "Dejan, do you think you may be projecting a bit here?"

traxus4420 said...

this is a really helpful and coincidentally timely (for me) post/discussion -- thanks.

"its not a moral judgement or about what people need in society, its just about the labour value of commodities, how it is determined - you can make a Thing by hand, but if normally across the whole of thing production the same thing is made with a certain mechanisation, your particular thing is not more valuable than the thing with fewer hours of living labour in it."

if someone doesn't mind, i have questions about exactly this point. where does expertise/training fit in to this cost of reproduction? or resources that are necessary for that work to be completed, like the cost of the car and gas you need to drive to work? isn't the setting of this price political and ridden with moral value judgments -- like wages necessary to support a family, send kids to school, etc.?

dejan said...

and luke ''leninushka''is last season, this season it's

leninuni-nuni-nini

Le Colonel Chabert said...

" i have questions about exactly this point. where does expertise/training fit in to this cost of reproduction? or resources that are necessary for that work to be completed, like the cost of the car and gas you need to drive to work? isn't the setting of this price political and ridden with moral value judgments -- like wages necessary to support a family, send kids to school, etc.?
"

The value of the commodity labour power is the marginal cost of reproducing the labourer for a day. So this is socially variable - standards are socially determined. (Some labourers have to show up in stockings, or a dry cleaned shirt, shaven, educated, etc.) But the value of labour power is manipulable politically. So the bare reproduction costs of a person is the floor.

That is labour power, the commodity. In situations where capital controls the state and has the upper hand, the wage tends toward zero (one dollar a day in Haiti). It can be forced, then, even below the actual costs to reproduce a person for a day. One dollar a day in Haiti provides less nutrition that the Code Noir of the 1690s issued by Louis XIV required planters to feed their slaves.

The surplus value, however, is what the person at work produces minus his wage. So, in this - in the use value of labour to the capitalist - all these costs and expenditures and labours you speak of (education, commodities consumed, housework) constributes to the labourers ability to do the labour, to make the values, to produce at work. These values then are exploited and capitalised as profit. That is where profit cmes from - taking a surplus from the total social production.

So one must remember that unlike renting say an expensive machine, an HD camera say, renting a labourer, the capitalist only the marginal cost of the labourer for that day. Only the cost of keeping an already produced, educated existing person alive for a day. With a machine, the costs of its creation are reflected in price of the rental. In human labour power, not necessarily (hierarchy of wages, wage aristocracy, clearly in the real world rather than the model, there are labourers who are expensive to rent - but i think its best to think about this as their sharing in the surplus value). So this is where exploitation happens; where the human being who is the product of lots of labour, of the whole social production, is put to work for a day for the capitalist.

Use value and exchange value are different. You can't eat the coins that you pay for the bread; you can't eat the paperclips that exchange for the bread. The bread has a use value that is different from its exchange value. Labour power as a commodity also has a use value and an exchange value. Labour power costs something for the capitalist (the marginal cost of reproducing a person); but the capitalist can do somehting with it that can be done with no other commodity. The use value of capital derives from society and nature, the entire social order and its arrangements and the biological, intellectual and material qualities of people.

Computer programmes and software are an interesting addition to the world described by Marx because it is the first machinery or technology that increases the productivity of labour whose own marginal costs are that low, can tend to zero. It is fixed capital, but almost free to reproduce. The huge amount of social labour that went into the initial necessary production was mostly, like that of of the social knowledge, communicative, and intellectual qualities of labour power, contributed free to capital, mainly through the state. This technology allows for the increased productivity of different capacities of human beings than those whose productivity were specifically increased before. (the model you have on your website shows what the priorities are - it's a perfectly adequate model for a worker at work, from the point of view of someone trying to maximise the productivity of that work. what shortcommings it has as a model of a person are not very important if one is looking at people as workers, at work all their waking hours producing commodities of some sort.)

that the wage is (in principle, with great oscillations) the labour value - the market value - of a human day, is political; its possible because people are dispossesed by private property. They have no other way to get the means to reproduce themselves for a day. It took a long time for the entire world to be so enclosed in property so completely that this really was a normal state. For this reason commodity production initially required slavery, and requires it periodically, because "the market" and "laissez faire" is not enough to guarantee a labour supply on these terms which involve the total social production subjected to surplus extraction by capital.

So "moral and political judgements" are aspects of course of the entire social order, its arrangements, its reproduction, which capital exploits and extracts surplus labour product from, which is capitalism is surplus value, accumulated in private property as wealth. The LTOV is however just a description of one part of the specific method of surplus labour product extraction, that is, the particular manner of its extraction and circulation and distribution (among the appropriator class) in capitalism. "socially necessary" and other terms that may seem to be making moral judgements aren't making moral judgements - its a morally neutral description of how the real wealth produced by the total social production is exploited and a surplus extracted, enclosed in a particular form of private property and divided up by the internally competitive capitalist class, through the market mechanism.

Le Colonel Chabert said...

"The use value of capital derives from society and nature, the entire social order and its arrangements and the biological, intellectual and material qualities of people.
"

Oops, that should be of course "the use value of labour to capital"

catmint said...

"if someone doesn't mind, i have questions about exactly this point. where does expertise/training fit in to this cost of reproduction? or resources that are necessary for that work to be completed, like the cost of the car and gas you need to drive to work? isn't the setting of this price political and ridden with moral value judgments -- like wages necessary to support a family, send kids to school, etc.?"

from the point of view of why the price of labour isn't bid down below its cost of reproduction, or similarly why workers in the US orEurope are apparently paid much more than a necessary minimum?

Marx argues in the chapter on the commodity that capitalists can't depress wages indefinitely because if workers are paid too little their productivity drops through sickness, defection, passive resistance etc. Organised labour could also push up the price of labour.

In the chapter on America at the end of Capital he treats a situation where workers are under less compulsion to sell their labour while capitalists are under greater compulsion to buy labour power because the market is growing and they are obliged to compete on market penetration. In this case the remuneration of labour rises.

Baran and Sweezy argue that in a globalised economy the decision facing capitalists concerning the remuneration of workers in the corporate centre is based on the maximisation of total surplus, so these workers could be paid more in order to prevent haulage workers' strikes at home, say, interfereing with profits from overseas markets. This appears not to have applied in Marx's time.

I would suggest that working class car ownership comes from the ability of workers in a growing market to resist wage decreases coupled with the decline in the relative price of cars through greater efficiency and excessive capacity.

These are "dynamic economy" arguments that aren't really covered in Capital 1 because Marx is in effect announcing the basic presuppositions of the dynamic economy, meaning to get back to it in the later books.

With respect to the subsidisation of schools or even highways, governments can quite well subsidise these on the basis of seeking to maximise surplus accruing to capital.

In effect the goals of capitalists acting as a joint stock company via the legislature and the aggregate of the effective goals of individual capitalists engaged in some degree of competition could be quite different with regard to the desirability of cheap labour, strong markets, low unemployment etc. The situation is complex.

Marx isn't though, from 150 years ago, necessarily predicting the endless extension of Dickensian poverty.

Le Colonel Chabert said...

The problem seems to be that ordinary cynicism + media discourse doesn't result in this sort of position (by my reckoning, and obviously this is context specific) but a kind of left wing neoliberalism.

Yeah or variants of fascism.

Le Colonel Chabert said...

"Marx isn't though, from 150 years ago, necessarily predicting the endless extension of Dickensian poverty."

right, in the Critique of the Gotha Program he takes aim at just this, the "iron law of wages".

One of capital's contradictions is that capital's labour are capital's consumers. And increasingly so. In Marx' era the working class consumed about 20% of total output in commodities. The bourgeoisie was consuming the rest. Later the "middle class" lifestyle in consumption terms in the imperial core spread to a pretty large group, the biggest group, including labour aristocracy. Capital favoured gov subsidies to the consumer markets - food stamps are the ideal example. You can't spend them anywhere but in chain supermarkets really; they include profits; they are a direct subsidy to capital, churning through the hands of labour. The state as end user of commodities is very significant.

In Marx' era, capitals are all concerned that the population reproduce itself, that there is the "reserve army" and expanding consumer markets. Today the leading global capital is not concerned about this anymore. It's okay for them if the population doesn't reproduce itself. Globally. But local capitals are still constrained. Not everyone can organise slave labour or equivalent, and profits have to be realised somewhere. The imperial core working class is sort of arbitraging labour power in consumer goods, selling labour power dear and buying it cheap in cheap food, clothes and other shit. Thus the soft landing (the immiseration is visible mainly in the relations of wages to housing and servies, local things.) Thus a not entire harmony between global finance and local industry and enterprise.

Here by the way is Mandel on Baran and Sweezy.

Le Colonel Chabert said...

i try again

catmint said...

"At a certain stage of capital concentration there occurs a decisive change in the way the market operates. Under monopoly capitalism, the dominant corporations are so strong that they can practically suppress price competition and price cutting."

as much as this is registering a historical change, this represents Baran & Sweezy retaining the concept of surplus from Marx i.e. the difference between the value of labour and the value realised by labour but explaining it differently. Because they dissent from LTOV the difference between these values is seen as being the result of monopolistic practices rather than being "endemic" as is suggested by LTOV.

also Baran & Sweezy regard the extension of advertising and the "sales effort" to be the result of competition between capitalists, with the status of rational investments for these capitalists though they are not rational from the point of view of the capitalist class as a whole (exceptions could possibly be made for the general propaganda function of advertising). It's not meant as a socially agreed sink for excess surplus like pyramid building, something like that.

I don't have an immediate sense of what Mandel means with regard to his distinction of types of suplus the treatment of which is supposingly mishandled in Monopoly Capital. I'll consider this.

Le Colonel Chabert said...

i think there is an underlying assumption when people start to examine capitalism and reject observations that capitalism is somehow designed, as if it were like one of the socialist utopias which sprung from the imagination of bourgeois in the 18th and 19th century, except from the mind of the god of capitalists, or something. So that obvious reality - the realty of human society and history - is taken as a flaw in the descriptions which do actually describe capitalism. Because the description should be the description of a designed machine, and not of human history, with material givens and historical inheritance etc. It's all part of this bogus way of thinking, then the model individual as component of this machine, etc, everything is presumed to reflect some design. So when you have a description liike Marx, which doesn't impose this fantasy, and which proceeds from what is, using conceptual abstraction only to clarify what is, it's very materialism and acknowledgement of human social and natural material reality is looked on as a flaw.

Le Colonel Chabert said...

"I don't have an immediate sense of what Mandel means with regard to his distinction of types of suplus "

its just surplus labour product on the one hand which is enclosed as private property and capital, so, the wealth and capital resources in the hands of capital. that is: profits, rents, interest, the surplus labour product expropriated by capital, the total. then the second concept of surplus, the important one for them they introduce, is the amount of this total which can't be "absorbed" - which is lying idle, which isn't burned up içn luxury goods, distribution or churned back into investment. So the second idea of surplus is a subset of the first, - kind of "neecessary surplus" (in capitalism) and "surplus surplus", which they call “economic surplus” - except that really the first in the US includes some surplus labour that's not in the hands of the bourgeoisie, that's distributed more widely.

Le Colonel Chabert said...

oh sorry, i misread, you mean the difference between "surplus product" (the stuff of overproduction) and surplus capital? Mandel accuses Baran and Sweezy of adding them together for their calculation of "economic surplus" (the surplus surplus). That is, of treating the unsold commodities as capital.

Le Colonel Chabert said...

it seems that nitzan and bichler kind of create a straw man out of sections of capital in order to reintroduce and reemphasise the political feature of exploitation. That's good except the marxist account class struggle and competition between capitals is still better than their notion of "power", which just crosses the line from a useful abstraction to an obfuscatory one, in spots. they leave out class struggle basically, preferring to look principally at kind of generalised leverage/force wielded by big blocks of capital on capital markets. but is not an account of value creation; its an account of price oscillations especially of securities. another kind of overshooting, i think due to this real fascinating and stumping caused by developments of new kinds of property, in telecom, licenses and IP and the virtual real estate, generating something like rents, that networks of different kinds have become.

Le Colonel Chabert said...

they have a category of "hype" and they claim to be reintroducing a proper attention to politics, but big features of "hype" like player knowledge of political leverage to guarantee taxpayer bailouts of risky investments, or treasury intervention in markets, or central bank help, etc, are no secret; this has nothing to do with value creation; the capital that will bail out the loan sharks of the subprime market is capital that comes from exploitation as any other. Marx' notion of capital is already contextual, and values are obviously not for marx, as n and b contend, "intrinsic to commodities" - on the contrary, they are "social relations between commodities". Which seems to be what n and b put forward as their big point. I don't think n and b are really adding anything here, but they make good observations about the current powers and customs affecting these relations. But obviously its a given that securities and "immaterial" commodities like IP - claims on future profits - are determined politically (will you be able to make those profits, what is the risk); that's a given for any marxist economist. What the value of an insider right of a rental building going co-op is worth depends on the lease and the political situation - a guess about whether laws of rent control and rent stabilisation will change and when. That's obvious. Are they advancing something more than that? I don't think so, though they are scrupulously reading current conditions and players for these features, which is good.

catmint said...

“But the authors do not stick consistently to that definition. Surely, depreciation costs – abstractions made of excess allowances which are just hidden profit, i.e. surplus value – are not part of surplus value but reproduction of constant capital.”

what Baran & Sweezy mean to treat is excessive depreciation costs beyond the reproduction of constant capital

“ Equally to take sales costs en bloc as part of the surplus is to indicate that this notion encompasses something more than surplus value. Evidently, the part of sales costs which is just reproduction of capital invested in the service sector is part of social capital.”

in this respect, I think, Baran & Sweezy really do assert that the sales industry, if such a thing can be logically disconnected from distribution, represents a sterile form of capital insofar as it works only to transfer consumer demand between businesses and does not contribute to value creation. Evidently it is part of social capital but it does not add value to social capital overall.

“So one gets the impression that the authors have mixed together surplus capital and surplus product, and that they would need at least to disentangle these two categories before they could prove convincingly that the “surplus” (and the rate of profit) has been constantly increasing since 1929.”

but the sales industry wouldn't be an instance of surplus productivity itself since it is bought and paid for, and on the rational basis of profit maximisation*. I can only suppose Mandel associates aggressive selling with overproduction, which isn't an irrational inference, but I don't think this occurs to Baran & Sweezy. The problem of overproduction, which Mandel treats here as “surplus product” doesn't really occur to them. The monopolistic basis of industry mitigates against this.

“These are not just semantic niceties. In a market economy “surplus product” can be disposed of only through exchange; it assumes the physical form of commodities for which there are no customers. “Surplus capital,” on the contrary, is potential purchasing power which, for the moment, finds nothing to buy. One now sees the logical inconsistency of adding surplus product to surplus capital, where indeed an operation of subtraction would be more to the point.“

so I don't believe in this respect they are “double counting”.

catmint said...

*Nitzan & Bichler consider their real advance to be the replacement of the concept of "profit maximisation" as being the motivation of capitalists with their concept of "differential growth". While I accept their arguments here I found the distinction a bit semantic. This was really already well known and is only a striking change with respect to versions of apologetic liberal economics.

I found their treatment of the political ramifications of inflation most relevant, but they aren't quite able to explain the whole process.

Le Colonel Chabert said...

"in this respect, I think, Baran & Sweezy really do assert that the sales industry, if such a thing can be logically disconnected from distribution, represents a sterile form of capital insofar as it works only to transfer consumer demand between businesses and does not contribute to value creation. Evidently it is part of social capital but it does not add value to social capital overall.

“So one gets the impression that the authors have mixed together surplus capital and surplus product, and that they would need at least to disentangle these two categories before they could prove convincingly that the “surplus” (and the rate of profit) has been constantly increasing since 1929.”"



i think he mandel is objecting to baran and sweezy saying the total "economic surplus" includes the amount "absorbed" in advertising and sales (prior to that absorption). That is, that they are designating that part of the "surplus surplus" in the first place, before then showing how the areas to get rid of it are inadequate.

catmint said...

In effect I think it's Mandel who confuses the two arguments in Monopoly Capital: that US capital had developed a vast infrastructure of socially unnecessary institutions* (from the point of view of the technical reproduction of the economic base), either through happenstance or through deliberate policy, and the "Keynesian" type argument that capital reproduction was yet being held back for want of further such spending. Both arguments are open to criticism. But they don't necessarily imply one another. Keynes himself argued the second without the first. The measurement of surplus in Monopoly Capital is straightforward accounting and can't disclose this sort of thing of investments not made because of insufficient consumer demand. This only shows up indirectly through unemployment and I suppose, inflation.

*from Baran and Sweezy's point of view, and their definition really is loose, things like hospitals are paid for out of the total surplus. All I know of Ernest Mandel is his introduction to Capital and I think he defrays these sorts of cost into the "conventional minimum". To some extent the disagreement comes out of this.

Le Colonel Chabert said...

Mn; I think Mandel's objection is that this is an effort to assign a single cause tyo a crisis, which finds a single solution (military spending); its an analysis without an appreciation for the contradictory nature of capitalist economies and societies. Thus, an accounting, but not so straightforward - the point is to take a lot of diverse and often contradictory phenomena under the name economic surplus, giving the impression we have a machine making too much surplus, coherently seeking means of absorption, finding it in the arms industry...I think Blackburn gave a good account of Mandel's polemics against all the stagnationist accounts somewhere but don't remember where it was. I will seek.

Le Colonel Chabert said...

(Late Capitalism is good, and prescient.)

Le Colonel Chabert said...

this is good

dejan said...

you make me want to say in a Group Therapy Voice, with a kind of routinised concern "Dejan, do you think you may be projecting a bit here?"

Luke, that you can say this after your embarrassment at Dr. Sinthome's, whose abrupt and clinically precise brushoff of your attack on psychoanalysis secured me of my favorite narcissistic kitten's talents, only bespeaks a good kind of insolence; this is the attitude I like.

I wanted to contribute something by way of alien Capital to the discussion, but Lawrence of Sherbertia stopped me dead in my tracks when she said that the reproduction of the material world has a circular feature. I knew there's no escaping hard matter from this point onwards.

Now excuse me as I have to go and pray at Shri David Lynch's Gnostic-Kabbalistic shrine.

catmint said...

embarrassed for what? wanting to win the spelling bee?

catmint said...

re the article about Ernest Mandel, N & B also find the rate of surplus to have risen within a core power bloc. Like B & S's earlier work they also don't treat the world economy as a whole. The rate of profit of the world economy is a simple empirical question though, or ought to be...