Marx out of 5?

5 - Orthodox Marxist
9% (7 votes)
4 - Marx has a strong influence on your philosophy
51% (40 votes)
3 - Marx did some good
31% (24 votes)
2 - Marx is irrelevant
3% (2 votes)
1 - It would be better if he’d never existed
6% (5 votes)
Total votes: 78

Posted By

Lazy Riser
Aug 24 2005 18:44

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redtwister
Oct 3 2005 16:27
afraser wrote:
redtwister wrote:
supply of labor may not increase fast enough, which will increase the value of labor and all other things being equal, probably raise wages.

Yes. But that disagrees with:

Marx wrote:
But the past labour that is embodied in the labour-power, and the living labour that it can call into action; the daily cost of maintaining it, and its daily expenditure in work, are two totally different things. The former [the daily cost of maintaining it] determines the exchange-value of the labour-power, the latter is its use-value.

[Capital, Volume 1, Chapter 7 http://www.marxists.org/archive/marx/works/1867-c1/ch07.htm]

I say - Redtwister says - that the daily cost of maintenance does not determine the exchange-value of labor power. Marx says otherwise. Who is right?

Where do I argue against Marx on this? You simply ignore what Marx already addresses under diffeent conditions, that there is a historical and moral component to the wage, ie what is neessary for the reproduction of labor is not a matter of mere sustenance, and that the actual wage may change under specific conditions, such as a change in the availability of labor power, as with any commodity, that under such dconditions it may be sold more dearly.

afraser, you have reproduced here the iron law of wages (by taking a quote out of context, where Marx is having a dicussion of the production of surplus-value, in which wages must be assumed to be stable, because adding a fluctuating wage does not in the least illuminate the relation between the use value and the exchange value of labor nor the relation of surplus value to value in its first pass, it could only alter its quantity), neither Marx nor myself. Please note the intent of the section from the paragraph above:

"Our capitalist, who is at home in his vulgar economy, exclaims: "Oh! but I advanced my money for the express purpose of making more money." The way to Hell is paved with good intentions, and he might just as easily have intended to make money, without producing at all. [14] He threatens all sorts of things. He won’t be caught napping again. In future he will buy the commodities in the market, instead of manufacturing them himself. But if all his brother capitalists were to do the same, where would he find his commodities in the market? And his money he cannot eat. He tries persuasion. "Consider my abstinence; I might have played ducks and drakes with the 15 shillings; but instead of that I consumed it productively, and made yarn with it." Very well, and by way of reward he is now in possession of good yarn instead of a bad conscience; and as for playing the part of a miser, it would never do for him to relapse into such bad ways as that; we have seen before to what results such asceticism leads. Besides, where nothing is, the king has lost his rights; whatever may be the merit of his abstinence, there is nothing wherewith specially to remunerate it, because the value of the product is merely the sum of the values of the commodities that were thrown into the process of production. Let him therefore console’ himself with the reflection that virtue is its own reward, But no, he becomes importunate. He says: “The yarn is of no use to me: I produced it for sale.” In that case let him sell it, or, still better, let him for the future produce only things for satisfying his personal wants, a remedy that his physician MacCulloch has already prescribed as infallible against an epidemic of over-production. He now gets obstinate. "Can the labourer,” he asks, “merely with his arms and legs, produce commodities out of nothing? Did I not supply him with the materials, by means of which, and in which alone, his labour could be embodied? And as the greater part of society consists of such ne’er-do-wells, have I not rendered society incalculable service by my instruments of production, my cotton and my spindle, and not only society, but the labourer also, whom in addition I have provided with the necessaries of life? And am I to be allowed nothing in return for all this service?" Well, but has not the labourer rendered him the equivalent service of changing his cotton and spindle into yarn? Moreover, there is here no question of service. [15] A service is nothing more than the useful effect of a use-value, be it of a commodity, or be it of labour. [16] But here we are dealing with exchange-value. The capitalist paid to the labourer a value of 3 shillings, and the labourer gave him back an exact equivalent in the value of 3 shillings, added by him to the cotton: he gave him value for value. Our friend, up to this time so purse-proud, suddenly assumes the modest demeanour of his own workman, and exclaims: "Have I myself not worked? Have I not performed the labour of superintendence and of overlooking the spinner? And does not this labour, too, create value?" His overlooker and his manager try to hide their smiles. Meanwhile, after a hearty laugh, he re-assumes his usual mien. Though he chanted to us the whole creed of the economists, in reality, he says, he would not give a brass farthing for it. He leaves this and all such like subterfuges and juggling tricks to the professors of Political Economy, who are paid for it. He himself is a practical man; and though he does not always consider what he says outside his business, yet in his business he knows what he is about."

Marx is discussing whether or not value is 'produced' in the exchange (it is not) or by the capitalist (it is not.) so what is the character of the commodity (labor) the capitalist has bought with the intent on making a profit? From whence value over and above the initial raw materials, labor and machinery purchased? In the expenditure of labor for a time over and above that required to reproduce the laborer.

Do you often excel in taking quotes utterly out of context with everything you read?

http://en.wikipedia.org/wiki/Analytical_Marxism

Analytical Marxism is beneath my contempt. Happily it is a dead tendency, having gone the way of Eurocommunism.

chris

redtwister
Oct 3 2005 16:30
Anarchoneilist wrote:
In terms of building a genuine libertarian society,

the more you go into Marx the lower the marks.

(no pun intended tongue ) red n black star

Based on what?

chris

Lazy Riser
Oct 3 2005 16:30

Hi

Quote:
Do you often excel in taking quotes utterly out of context with everything you read?

He does, yes. It grows on you with time though.

Love

LR

Lazy Riser
Oct 3 2005 16:42

Hi redtwister

Quote:
Analytical Marxism is beneath my contempt

So, are you saying you disagree that a rational choice/game theoretic analysis of markets shows they're necessarily exploitative?

I'd have thought you'd have bought that to be honest.

Love

Chris

afraser
Oct 3 2005 20:10
redtwister wrote:
Do you often excel in taking quotes utterly out of context with everything you read?

I know this is very naughty, but I can't resist:

redtwister (utterly out of context) immediately after wrote:
...Marxism is beneath my contempt. Happily it is a dead tendency, having gone the way of Eurocommunism.
afraser
Oct 3 2005 20:37

Has been a genuine and instructive pleasure to debate with Redtwister, a man with a great knowledge of Marx - but perhaps too great a knowledge, so great as to obscure a clear vision of Marx's errors? G. A. Cohen is far from beneath my contempt. Even Marx is, much as I disgree with his theories.

Redtwister wrote:
You simply ignore what Marx already addresses under different conditions, that there is a historical and moral component to the wage, ie what is neessary for the reproduction of labor is not a matter of mere sustenance,

That address I accept (I ignored it only because I always accepted it and did not want to restate the obvious).

Redtwister wrote:
and that the actual wage may change under specific conditions, such as a change in the availability of labor power, as with any commodity, that under such dconditions it may be sold more dearly.

That also I accept. But I think Marx does not, in the sense of long term wages. Why? Because Marx says things like:

Marx wrote:
From whence value over and above the..labor..purchased? In the expenditure of labor for a time over and above that required to reproduce the laborer.

Marx is wrong: the labor time required to reproduce the laborer is of no relevance to value, nor to exchange-value, nor to use-value, nor to any other kind of value; nor to price, long-term or short-run; nor to wages; nor to any thing. No relevance. None. Marx is wrong.

Can anyone defend Marx's assertion that value is related to the labor time required to reproduce the laborer?

redtwister
Oct 3 2005 20:58
afraser wrote:

Marx is wrong: the labor time required to reproduce the laborer is of no relevance to value, nor to exchange-value, nor to use-value, nor to any other kind of value; nor to price, long-term or short-run; nor to wages; nor to any thing. No relevance. None. Marx is wrong.

Can anyone defend Marx's assertion that value is related to the labor time required to reproduce the laborer?

afraser,

Ok, that 'misquote' was kinda funny.

But on to substance...

We are sort of walking backwards into the actual problem: Whence comes value (which Marx referes to as Exchange-value for shorthand, but to the two concepts are in fact different)?

This question was the one which animated political economy from Petty to Ricardo, Say, Mill and eventually Marx's critique of political economy, in which he takes on the assertion of about two hundred years of political economy that labor is the source of value, but asserting that the question political economy never asks is why labor and its products take the form of value. In doing so, Marx nonetheless must answer the technical issues raised by political economy, he must remain imminent within political economy as a valid attempt at a scientific explication of capital and how it functions (something that post-Marx, in fact largely post-Say 'economics', or vulgar economics', has no interest in, even more so after Keynes and the Great Depression.)

1. Do you think that there is such a thing as value? Because we should clarify that briefly.

2. Assuming yes, then what is the standard of value? In marginalism, an after, there is no longer an interest in the question of 'value'. It is merely discussion of prices, with no question of what those prices revolve around or why one price is not as good as another. Price becomes subjective: what the buyer is willing to pay; marginal utility; the relation of supply and demand, etc.

But what is it that causes a commodity to reap a profit or a loss by being sold at a certain price?

On the scale of the whole economy, is profit derived from some buying low and selling high, while others sell low and buy high? This produces no new wealth, it is robbing Peter to pay Paul.

Does marginal utility increase the value of the product? This can only be sustained, and in the classical marginalist works, was only able to be sustained in the discussion of luxury goods, because food has no marginal utility, nor do many other items, taken on the scale of global production. In fact, marginalism opened the false divide between macro and micro economics, evading the social character of money, wealth, etc.

Does the value come from the capitalist? Well, that joke is obvious enough.

And yet companies most certainly reckon in terms of profit and loss. At the bare minimum, a capital must make back at least the cost of raw materials, equipment and its wear and tear, and the cost of the labor employed. This is a minimum, excluding other items like rent, interest on loans, etc, that do not immediately concern us as they cannot possibly be the source of profits for the producer, but only for the rentier an the lender.

Now, raw materials certainly add value, but only as much as they are worth. They do not become more 'valuable' just for being there, but only for being worked up, ie by the addition of labor.

Machines certainly add value, but only as much as went into producing them (which takes us backward to the extraction of raw materials and the addition of labor), plus the labor expended on their maintenance. A machine, having rather specific tolerances, can only produce what it is designed to, and can only transfer as much as it is worth before breaking down.

That pretty much leaves human beings as the source of surplus.

But I have to go, so more tomorrow.

chris

afraser
Oct 3 2005 21:36

Already I have written on value: http://afraser.com/value.htm. It's a very short and simplified article, have no fears on clicking on it to read, I urge everyone to take a look.

But is maybe too short and simplified. It leaves out my own beliefs, which, such as they are, are: value is long term cost, that which, once market fluctuations have been ironed out, a commodity will trade for, which is what its labor and land (natural resource) input is. So, a land and labor theory of value. In my belief, no value derives to capitalists. And the division of value between laborer and owners of natural resource (=community) is a matter for political decision.

But I am happy to accept other, wiser, minds' definitions of value. It is only a word, after all, provided we are clear and agreed on definitions, all are equaly good.

redtwister
Oct 4 2005 14:56
afraser wrote:
Already I have written on value: http://afraser.com/value.htm. It's a very short and simplified article, have no fears on clicking on it to read, I urge everyone to take a look.

But is maybe too short and simplified. It leaves out my own beliefs, which, such as they are, are: value is long term cost, that which, once market fluctuations have been ironed out, a commodity will trade for, which is what its labor and land (natural resource) input is. So, a land and labor theory of value. In my belief, no value derives to capitalists. And the division of value between laborer and owners of natural resource (=community) is a matter for political decision.

But I am happy to accept other, wiser, minds' definitions of value. It is only a word, after all, provided we are clear and agreed on definitions, all are equaly good.

Thanks for the link. A few things popped out at me.

Not surprisingly, Value is not treated as a form of social relation (a form of labor), even though that is Marx's intent in the use of the term (and why it goes beyond political economy, which could never grapple with it as such), and you use the term in a way that confuses price, Value and exchange-value. Also the difference between cost and price seems arbitrary.

In confusing price and value, you confuse the center around which price fluctuates (commodities almost never sell at their 'value') with its monetary denomination on the market at a much more complex level. "Marxist political economy" (a lot of drivel predicated on a mis-reading of Marx, who's contestation has often been driven underground by the Orthodox Marxist mainstream) has been arguing over the 'transformation problem' for over a century in trying to figure how values become prices. Then again, MPE tends to assume that labor is the content of value, but Marx was asking why labor takes the form of value, when in other societies it did not take the form of value.

As for 'land' and 'labor', land does not produce exchange value or Value. Land and nature as a whole (why restrict it to land??) produce use-values which still cannot be appropriated without labor. the air I breathe has no exchange value, but if I tank it and sell it at an Oxygen Bar, only then is it a commodity or an excahnge-value. many peoples took what they needed from the land without ever treating them as 'Values', but merely as useful objects appropriated for their consumption (or for barter, potlatch, etc., but none of those had in mind the accumulation of a universal equivlent that they could use later to purchase any other object, ie there was no money.)

cheers,

chris

redtwister
Oct 4 2005 15:51
afraser wrote:
But is maybe too short and simplified. It leaves out my own beliefs, which, such as they are, are: value is long term cost, that which, once market fluctuations have been ironed out, a commodity will trade for, which is what its labor and land (natural resource) input is. So, a land and labor theory of value. In my belief, no value derives to capitalists. And the division of value between laborer and owners of natural resource (=community) is a matter for political decision.

But I am happy to accept other, wiser, minds' definitions of value. It is only a word, after all, provided we are clear and agreed on definitions, all are equaly good.

Ok, so a few more thoughts, as I lost my train of thought from yesterday, interrupted as i was by my flight from wage labor as I punched the clock.

"Value is long-term cost." Cost of what?

The cost of raw materials and machinery? I have already addressed how these do not have value until they are worked up by human labor (and properly speaking, until they are appropriated as exchange-values to be bought and sold, as non-commodified labor can work up and appropriate nature without them ever becoming "Values" or exchange-values.)

The cost of land? Land only has a 'cost', a price, where property is private and land can be monetized, where there is ownership of land as a commodity. Feudalism did not have rent proper, monetary rent, but the direct interchange of access to the land for either goods or services (e.g. corvee labor.) That is, not for money, not for accumulation of values, but for use-values (and of course in feudalism there is relatively little reason to specifically denote a use-value as distinct from exchange-value.) That a "collective" can charge rent only means that it acts like a form of company, a collective capitalist.

What does 'long-term' matter? Time is irrelevant here, unless one is already outside of the process of production. The long-term cost of a piece of machinery is the combined cost of its purchase and maintenance, for example. It does not tell us anything more than talking about 'the cost' unless one is trying to determine the amount of value produced over time, a point which we are not even at (the reproduction of capital, which begins in Vol. 2 of Capital, which we have not even broached.)

"that which, once market fluctuations have been ironed out, a commodity will trade for" Well, this is closer to the idea I have put forward, that value is the center (a moment of social activity frozen fast) around which price fluctuates. But market fluctuations are not ironed out, at least not in relation to the price of any given commodity. We can only iron out the fluctuations, even nominally, at the level of total social capital, which is the only possible level at which prices would equal values, as a whole. And even then, since everything is bought and sold and not all activity purchased produces value, it is well nigh impossible to make such a calculation. If you want to see some painful attempts, you can always read Tonak and Shaikh's work or Angus Maddion's work, but it is deadly fuckin' dull.

And yes, you put land (natural resource), I missed that in my first post. Of course, you leave out constant capital or machinery/equipment, which to me is odd. This seems vaguely like the Physiocrats, who had a definite influence on Proudhon.

As for the last phrase, that you assume that all definitions are equally good as long as we all agree leaves me non-plussed. Are we working with a consensus notion of truth? Also, I do not want to confuse definitions with categories. What we are working with is the viability of specific categories.

chris

afraser
Oct 5 2005 20:44

The central claim of Marx’s value theory is that the magnitude of value is determined by socially necessary labor time. To be more precise: the exchange-value of a commodity varies directly and uniformly with the quantity of labor time required to produce it under standard conditions of productivity, and inversely and uniformly with the quantity of labor time standardly required to produce other commodities, and with no further circumstances.

That is two propositions:

1) Socially necessary labor time determines value;

2) Value determines equilibrium price.

The conjunction of (1) and (2) entails that:

3) Socially necessary labor time determines equilibrium price.

But statement (3) is false, demonstrably false, and much of the second and third volumes of Capital is an attempt to cope with that fact. It is especially false as regards the price of labor power (the wage) – and that is entirely what Marx’s theory of surplus value depends upon.

redtwister
Oct 6 2005 20:59
Quote:
The central claim of Marx’s value theory is that the magnitude of value is determined by socially necessary labor time. To be more precise: the exchange-value of a commodity varies directly and uniformly with the quantity of labor time required to produce it under standard conditions of productivity, and inversely and uniformly with the quantity of labor time standardly required to produce other commodities, and with no further circumstances.

As I have taken great care to explain, this is not the central claim of Marx’s analysis (critique is a better word) of value. If it was, it is likely he would have said so, but for him his two greatest advances on classical political economy were his distinctions between abstract and concrete labour and between labour and labour power, and that he is the first to ask why labour should take this form, as abstract labour, as value, as money, etc.

As such, Marx, while he works from within Smith and Ricardo and Quesnay’s “labor theory of value”, is about showing how it is that labor takes this form. But as with any properly immanent critique, he has to work from within the categories of that which he is critiquing, otherwise he merely imposes his own external standard to it. As such, he must take classical political economy at face value, which is where one first finds the ‘labor theory of value’ (it is not unique to Marx.) So your first sentence is incorrect, although you will no doubt object to the use of immanent critique. That is something of another discussion, but not unrelated.

The second sentence is correct from within the context of a labor theory of value, at a general level. This is however a very abstract level which you take as applicable to capitalist firms or markets. This is predicated on a common mistake of readers of volume 1 of Capital. Marx, even where he uses individual capitals as an example, as simply a representation of total social capital.

This is a mistake shared by most Marxists, as by many others, almost all of whom share the common misconception that Marx’s work is a work of economics (in which Marx is just a hyper-consistent Ricardian), and not a critique of political economy. Many fail to recognize that Marx is moving from the abstract to increasingly concrete levels of presentation or as Aufheben put the matter…

“Thus while Volume I grasps each individual capital only insofar as it is itself an expression of the self-expansion of alienated labour, Volume II considers the particular material and temporal forms that both individual and social capital must assume in the course of its circulation. Then in Volume III Marx seeks to grasp the singularity of each 'individual capitalist enterprise' insofar as it has a distinct particular function of capital as a whole. Hence it is only in Volume III, where Marx can talk about price and profits etc as differentiated and mediated forms of value and surplus value, that the vantage point of the individual capitalist enterprise emerges as something distinct from that of capital as a whole!”

Even to that, however, I must object that from the beginning Marx recognizes that price and Value do not correspond because

Magnitude of value expresses a relation of social production, it expresses the connexion that necessarily exists between a certain article and the portion of the total labour-time of society required to produce it. As soon as magnitude of value is converted into price, the above necessary relation takes the shape of a more or less accidental exchange-ratio between a single commodity and another, the money-commodity. But this exchange-ratio may express either the real magnitude of that commodity’s value, or the quantity of gold deviating from that value, for which, according to circumstances, it may be parted with. The possibility, therefore, of quantitative incongruity between price and magnitude of value, or the deviation of the former from the latter, is inherent in the price-form itself. This is no defect, but, on the contrary, admirably adapts the price-form to a mode of production whose inherent laws impose themselves only as the mean of apparently lawless irregularities that compensate one another.” (italics mine)

Quote:
That is two propositions:

1) Socially necessary labor time determines value;

2) Value determines equilibrium price.

The conjunction of (1) and (2) entails that:

3) Socially necessary labor time determines equilibrium price.

But statement (3) is false, demonstrably false, and much of the second and third volumes of Capital is an attempt to cope with that fact. It is especially false as regards the price of labor power (the wage) – and that is entirely what Marx’s theory of surplus value depends upon.

1) In Ch. 1, vol. I (p. 129 of Vintage): “What exclusively determines the magnitude of the value of any article is therefore the amount of labour socially necessary, or the labour time necessary for its production”. Or Vol. I (p. 340): “Its (labor power’s) value, like that of all other commodities, is determined by the labor-time necessary to produce it.” Opening Ricardo’s Principles of Political Economy and Taxation (London 1977) we read at the head of Chapter One: “The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labor for which is necessary for its production…”

2) Sort of. Marx is more concerned with how value appears, as a form of social relations…

“Price is the money-name of the labour realised in a commodity.” (Capital, ch. 3)

“The price or money-form of commodities is, like their form of value generally, a form quite distinct from their palpable bodily form; it is, therefore, a purely ideal or mental form. Although invisible, the value of iron, linen and corn has actual existence in these very articles: it is ideally made perceptible by their equality with gold, a relation that, so to say, exists only in their own heads. Their owner must, therefore, lend them his tongue, or hang a ticket on them, before their prices can be communicated to the outside world.” (Capital, ch. 3)

Anyway, while you assert that this is false, you do not explain or prove it. Demonstrably false is not a demonstration.

In turn, I shall offer a few words from I.I. Rubin, Chapter 16, Socially Necessary Labor…

“The magnitude of socially necessary labor-time is determined by the level of development of productive forces, which is understood in a broad sense as the totality of material and human factors of production. Socially-necessary labor-time changes in relation not only to changes in the "conditions of production," i.e., of material-technical and organizational factors, but also in relation to changes in the labor force, in the "ability and intensity of labor."

In the first stage of his analysis, Marx assumed that all exemplars of a given sort of product were produced in equal, normal, average conditions. The individual labor expended on every exemplar quantitatively coincides with the socially-necessary labor, and the individual value with the social or market value. Here the difference between individual labor and socially-necessary labor, between individual value and social (market) value, is not yet taken into account. Thus Marx speaks simply of "value," and not of "market value," in these passages (market value is not mentioned in the first volume of Capital).

In later stages of his analysis, Marx assumed that different exemplars of a given sort of commodity are produced in different technical conditions. Here the opposition between individual and social (market) value appears. In other words, the concept of value is developed further and is defined more accurately as social or market value. In the same way, socially necessary labor-time opposes individual labor-time which differs in enterprises of the same branch of production. Thus we express the property of the commodity economy that the same price is established for all commodities of a given type and quality which are exchanged on the market. This is independent of the individual technical conditions in which these commodities are produced, and independent of the quantity of individual labor expended on their production in different enterprises. A society based on a commodity economy does not directly regulate the working activity of people but regulates it through the value of the products of labor, through commodities. The market does not take into account the individual properties and deviations in the working activity of individual commodity producers in individual economic units. "Each individual commodity, in this connection, is to be considered as an average sample of its class" (C., I, p. 39). Every individual commodity is not sold according to its individual value, but according to the average social value, which Marx calls market value in Volume III of Capital.”

Waiting…

chris

redtwister
Oct 7 2005 14:02

By the way, I have been meaning to thank afraser for a very thorough-going discussion and for sticking to it. We disagree vehemently, but I appreciate the effort he has put forward in having a substantive discussion.

Cheers,

Chris

Lazy Riser
Oct 7 2005 17:16

Hi

You should pay him a bit for his trouble. He doesn't work for free you know.

Love

LR

redtwister
Oct 7 2005 18:15
Lazy Riser wrote:
Hi

You should pay him a bit for his trouble. He doesn't work for free you know.

Love

LR

Damn farmers' market socialism twisted

Mike Harman
Oct 7 2005 19:01

afraser:

Could you outline what you think determines wages?

I think my previous post describes how the supply of labour can and does fluctuate with demand like most other commodities, so please take that into account.

afraser
Oct 7 2005 22:04
Catch wrote:
Could you outline what you think determines wages?

I think that the unemployment rate is most important in determining wages. And unemployment is in large part a creation of government, controlled with the aid of government's base lending rate/reserve rate of interest.

Catch wrote:
I think my previous post describes how the supply of labour can and does fluctuate with demand like most other commodities, so please take that [The enclosures of the commons, colonialism, the American Civil War, the current attacks on welfare, the raising of the retirement age, child care, immigration, outsourcing] into account.

So:

Most other commodities: Imagine, for example, a sudden surge in fashion for banjos:

t1: demand for banjos increases as a banjo fashion craze sweeps the world;

t2: price of banjos rises;

t3: supply of banjos increases as new banjo factories appear, their owners greedy to take advantage of the high banjo prices;

t4: price of banjos drops back to its original level.

Labour: Compare that to a sudden surge in demand for workers:

t1: demand for workers increases;

t2: wages increase;

t3: supply of workers...oops...doesn't increase. No new factories appear that can manufacture people for shipment to the labor market;

t4: wages stay at their new high level.

It is true that capitalists and their states engage in practices, such as those Catch lists, designed to increase the supply of labour. But note that they would engage in those practices regardless of whether or not demand for labour is increasing. Outsourcing to lower wage workforces, for example, would happen regardless of whether or not demand for labour was increasing. And, in reality, outsourcing from the United States has been at its highest in the last two decades when wages there have actually fallen in real terms. Capitalists will, of course, take advantage of any opportunity to reduce wages, but will do so regardless of whether or not demand for labour is rising, falling, or staying the same. The supply of labour does not fluctuate with demand like most other commodities.

Which is a shame for Marx. Unless, that is, I was just excelling in taking him out of context, in which case: that's alright then.

Bodach gun bhrigh
Oct 8 2005 11:23

I think I found the coolest sentence in any Marxist book ever.

Quote:
In the drawing rooms of the rich bourgeois, machines pay visits on one another and manifest their temporary concord

The kind of thing that drove me crazy. I wonder if too much determinism can lead to schizophrenia. If you don't believe people have wills of their own, then you can fall into the trap of believing you don't have a will of your own, and therefore attribute your will to outside influences. Leading to psychosis. Good ol Sartre, obviously reading too much sci-fi that week. black bloc

afraser
Oct 10 2005 22:43
Redtwister wrote:
While you assert that this [(3) Socially necessary labor time determines equilibrium price] is false, you do not explain or prove it. Demonstrably false is not a demonstration.

Socially necessary labour time differs from equilibrium price when the production processes of different goods have different organic compositions of capital (simply: have different proportions of capital input) – which is, all the time. This is called the transformation problem: http://en.wikipedia.org/wiki/Transformation_problem and, I think, a better treatment at: http://www.simons-rock.edu/~eatonak/LTV-FAQ.html#Transformation.

redtwister
Oct 12 2005 13:56
afraser wrote:
Redtwister wrote:
While you assert that this [(3) Socially necessary labor time determines equilibrium price] is false, you do not explain or prove it. Demonstrably false is not a demonstration.

Socially necessary labour time differs from equilibrium price when the production processes of different goods have different organic compositions of capital (simply: have different proportions of capital input) – which is, all the time. This is called the transformation problem: http://en.wikipedia.org/wiki/Transformation_problem and, I think, a better treatment at: http://www.simons-rock.edu/~eatonak/LTV-FAQ.html#Transformation.

Yes, this is back to one of those long-argued technical questions (the transformation problem.) There is a long history of this discussion and to the extent I find it interesting or relevant , I am largely of the mind that the work around the books Marx and Non-Equilibrium Economics and The New Value Controversey by Andrew Kliman, et al is very solid work. On the other hand, I find the math quite daunting.

I am still not quite sure why, and I haven't had the time to figure out why, but the phrasing "Socially necessary labor time determines equilibrium price" is an incorrect representation of Marx's take on the matter.

Do you have a reference to where this formulation is used by Marx or is this an extrapolation on your part?

cheers,

chris

redtwister
Oct 12 2005 15:42
afraser wrote:
Labour: Compare that to a sudden surge in demand for workers:

t1: demand for workers increases;

t2: wages increase;

t3: supply of workers...oops...doesn't increase. No new factories appear that can manufacture people for shipment to the labor market;

t4: wages stay at their new high level.

It is true that capitalists and their states engage in practices, such as those Catch lists, designed to increase the supply of labour. But note that they would engage in those practices regardless of whether or not demand for labour is increasing. Outsourcing to lower wage workforces, for example, would happen regardless of whether or not demand for labour was increasing. And, in reality, outsourcing from the United States has been at its highest in the last two decades when wages there have actually fallen in real terms. Capitalists will, of course, take advantage of any opportunity to reduce wages, but will do so regardless of whether or not demand for labour is rising, falling, or staying the same. The supply of labour does not fluctuate with demand like most other commodities.

I am not sure how you imagine that this is in contradiction to Marx except that it is incomplete.

Of course capital is always looking for ways to reduce wages. Class struggle also takes the form of looking for ways to cheapen labor cost and that is constant. It takes the form of competition because companies look at market share, access to resources and labor, etc. in relation ot other capitals.

For your example, however, declining wages are not the only matter involved. Real wages may not be able to decline enough and so capital will look abroad. However, if producitivity is increasing faster than wages and productivity differential beteen the US and another location is high enough, lower wages may not themselves be a good enough reason to move (you can also include in that available communications and transportation infrstructure, R&D facilities, government support of R&D, access to universities as sources of R&D, etc.) So not all industries are leaving the U.S., evidenced by the fact that the majority of the world's production still happens in the 10-12 most powerful economies.

As such, demand for labor is one aspect of that process. However, since you said that demand for labor does not drive capital to seek new sources of labor, Catch pointed out quite correctly that you were wrong. Neither he nor I claimed it was the only factor, but that it is one of them.

Also, in your example, it is as if class struggle is utterly absent. quite the contrary, capital will do its best to find a way to lower those wages, most notably, the introduction of new technology to reduce th amount of labor used and to reduce the cost of the reproduction of labor, as well as gutting things like state programs that mitigate the pressure of unemployment and underemployment, like public aid, public medical care, public child care, etc., attemtpting to force those either back onto families as private services or through the introduction of private, for-a-fee services, like private or for-cost day care.

But because all of this happens in time, there is a disconnect between a tight labor market causing an increase in wages and the response of capital to lower those wages via machinery, relocation of production facilities, cutting of public services, etc. and they often cannot do these things without risking open conflict in the form of protests, strikes, boycotts, riots, political upheval, etc.

You also cannot extrapolate from the current period where capital is often avoiding massive new investment in favor of speculation. Capital does not behave the same in all conditions, as if there were an automatic, pre-determined set of responses. Capital will flow where it thinks it can with the least interference. If production is not promising, if labor is too resistant, it will seek out speculation and credit-debt schemes, which it uses to both fleece the weaker capitals and to discipline labor, social services will be cut while the state is fleeced as a reservoir of cash, etc. all of these done very effectively in the US over the last 30 years.

chris

redtwister
Oct 12 2005 15:44
revol68 wrote:
the problem with all this is that it takes economic concepts and categories as actual reality.

capitalism is a social relationship that has to be continually reproduced based on conflict and compromise, as such economics as a method of predicting things is very little than alchemistry. It attempts to freeze and compartmentalise life in to formula.

What i take from Marx is his critique of political economy, i do not see him as a political economist.

Yep, but afraser doesn't quite get that. For him, economic categories are clearly defined, objective and about measuring, and capital is not insane, but rational, apparently. Only the state is irrational.

chris

redtwister
Oct 12 2005 15:50
Bodach gun bhrigh wrote:
I think I found the coolest sentence in any Marxist book ever.
Quote:
In the drawing rooms of the rich bourgeois, machines pay visits on one another and manifest their temporary concord

The kind of thing that drove me crazy. I wonder if too much determinism can lead to schizophrenia. If you don't believe people have wills of their own, then you can fall into the trap of believing you don't have a will of your own, and therefore attribute your will to outside influences. Leading to psychosis. Good ol Sartre, obviously reading too much sci-fi that week. black bloc

I'm curious as to what you think is wrong with this statement? You think that capitalists have free will? Do you think that capitalists can remain capitalists except by trying their best to follow the dictates of capital? They are chits on a golf green and capital moves and expands irrespective of this or that capitalist or whether it is prive capitals or states. Capitalists can only make a very limited range of choices if they wish to remain capitalists, and that their whole range of choices boil down to "How do I exploit better, more efficiently, than the next capitalist? How do I expand my profits and increase my rate of profit?"

I'm not even defending Sartre, who is quite over-rated, but curious what you think the relation of free will todetermination is?

chris

Bodach gun bhrigh
Oct 12 2005 17:07

Hmm, I think I found the sentence, and most of the book it's from, a bit heavy on the old determination thing. In my paranoid state I tend to view all capitalism as a conspiracy, not that I go into conspiracy theory or anything like that, but that the capitalists are perpetually in a class war against us, so everything they do will be done to increase their power while reducing that of the working class. So, therefore, power will be a motivation for it's own sake, with all that goes with it. I don't feel that all human actions are unconscious, and I feel that people at the top of industries must act out of some form of motivation other than just profit, whether that's the delight in riches and debauchery or the delight in screwing other people over. I get the feeling that most capitalists would laugh at Sartre's sentence. Now I'm not saying that determinism doesn't play a big part in human life, psychosis being a good example of it, but that perhaps the emphasis is wrong. I can see the point Sartre is making, but, I feel that a lot of human actions are based around simple greed and lust for power, and it is only the rise of Protestant capitalism that has created the illusion that men are determined by their situation, in a society where there is no industrial capitalism then there wouldn't be the mass urge for profit and indoctrination that profit is the only goal. If men were entirely determined by economics then there would have been some amelioration of the capitalist situation, as profiteers could have made more money in the past and improved the economic lot of the workers at the same time, but didn't because of the need for control over the workforce. I remember reading somewhere that continuing with the workshop model of industry would have led to more profits, but that early industrialists brought in factories so they could have more control over their workers. This is not to deny that determinism plays a big part, but that there are factors other than the economic. You could say the entire ruling class are determined, like Godwin did, i.e. their social environment is so reduced that they become idiotic and reactionary, but if that were so then simple conversation would persuade them to reverse their position, leaving no room for the delight in power that distinguishes them. Strict determinism is as blind as saying that everyone's free. This also brings me on to a point about Marx, if Socialism's inevitable, then why act to bring it about? Determinism not only removes the ill-will of the bosses, but also the revolutionary volition of the workers. And if Socialism is inevitable, then why hasn't it come about, and why have a minority of the population spent so much time destroying movements intended to bring it about? People do make choices about their lives, maybe not without a lot of influence from their social situation, but in the end those choices are made. I'm not saying determinism doesn't exist, but that free-will exists in tandem with it. Adorno said both theses are false but that both exist.

There endeth the ramble. eek

redtwister
Oct 12 2005 18:42
Bodach gun bhrigh wrote:
Hmm, I think I found the sentence, and most of the book it's from, a bit heavy on the old determination thing. In my paranoid state I tend to view all capitalism as a conspiracy, not that I go into conspiracy theory or anything like that, but that the capitalists are perpetually in a class war against us, so everything they do will be done to increase their power while reducing that of the working class. So, therefore, power will be a motivation for it's own sake, with all that goes with it. I don't feel that all human actions are unconscious, and I feel that people at the top of industries must act out of some form of motivation other than just profit, whether that's the delight in riches and debauchery or the delight in screwing other people over. I get the feeling that most capitalists would laugh at Sartre's sentence. Now I'm not saying that determinism doesn't play a big part in human life, psychosis being a good example of it, but that perhaps the emphasis is wrong. I can see the point Sartre is making, but, I feel that a lot of human actions are based around simple greed and lust for power, and it is only the rise of Protestant capitalism that has created the illusion that men are determined by their situation, in a society where there is no industrial capitalism then there wouldn't be the mass urge for profit and indoctrination that profit is the only goal. If men were entirely determined by economics then there would have been some amelioration of the capitalist situation, as profiteers could have made more money in the past and improved the economic lot of the workers at the same time, but didn't because of the need for control over the workforce. I remember reading somewhere that continuing with the workshop model of industry would have led to more profits, but that early industrialists brought in factories so they could have more control over their workers. This is not to deny that determinism plays a big part, but that there are factors other than the economic. You could say the entire ruling class are determined, like Godwin did, i.e. their social environment is so reduced that they become idiotic and reactionary, but if that were so then simple conversation would persuade them to reverse their position, leaving no room for the delight in power that distinguishes them. Strict determinism is as blind as saying that everyone's free. This also brings me on to a point about Marx, if Socialism's inevitable, then why act to bring it about? Determinism not only removes the ill-will of the bosses, but also the revolutionary volition of the workers. And if Socialism is inevitable, then why hasn't it come about, and why have a minority of the population spent so much time destroying movements intended to bring it about? People do make choices about their lives, maybe not without a lot of influence from their social situation, but in the end those choices are made. I'm not saying determinism doesn't exist, but that free-will exists in tandem with it. Adorno said both theses are false but that both exist.

There endeth the ramble. eek

Wow, too much to work with. Just a few quick points...

Marx isn't on about 'economic determinism', but more about the relation between human beings and the world they produce, and their conscious and unconscious relation to it. Capital creates 'homo economicus', not Marx and he is trying to show how that happens and why.

Marx never argued that socialism/communism is inevitable. Not only that, workers becoming conscious of the meaning of their actions, that their struggle is communism, is central to his work.

I think Adorno is basically correct, but I don't think he at all would think he was saying something that would shock Marx (or Hegel for that matter, as the whole Unhappy Consciousness section of the Phenomenology of Spirit is involved with that, among other places.)

cheers,

chris

redtwister
Oct 12 2005 18:48

Some notes for afraser, very long but I think directly to the point of my problems with afraser’s post:

"In his earliest work on political economy, in a formulation repeated and expanded throughout his life, Marx (1975:260) offers a root-and-branch critique of the Ricardian concept of ‘economic law’:

Both on the question of relations of money to the value of metal and in his demonstration that the cost of production is the sole factor in the determination of value Mill succumbs to the error, made by the whole Ricardo school, of defining an abstract law without mentioning the fluctuations or the continual suspension through which it comes into being.

If e.g. it is an invariable law that in the last analysis – or rather in the sporadic (accidental) coincidence of supply and demand – the cost of production determines price (value), then it is no less an invariable law that these relations do not obtain, i.e. that value and the cost of production do not stand in any necessary relation.

Indeed, supply and demand only ever coincide momentarily thanks to a previous fluctuation in supply and demand, to the disparity between the cost of production and the exchange value. This is the real movement, then, and the above-mentioned law is no more than an abstract, contingent as one-sided moment in it.

This counterposes two radically different treatments of the same issue: since value does not appear openly but in the form of price, and since value is unaffected by supply and demand whereas price itself fluctuates with their movement, what possible relation can there be between value and price?

The Ricardian answer, from which Marx demarcated himself for the rest of his life, is to enquire in what ratio goods must exchange in order to equalise demand to supply. Value then reduces to a special kind of price. Marx’s answer, the polar opposite, is to ask what relations make exchange possible, regardless of supply and demand. Price is then explained as a form of appearance of value.

The two conceptions stand opposed as the imaginary to the real. The Ricardian abstract law, supposing a relation that never happens, imposes ideal prices and values on reality. Marx’s ‘no less invariable law’, insisting on a motion which always happens, imposes real prices and values on the imagination.

Economic theory bifurcates with this critique...

… I will show that Marx’s difference with Ricardo goes beyond this qualitative distinction once the economy departs from stasis, that is, in any real economy. Any equilibrium approach then necessarily determines both price and value in the neoclassical manner, by quantity of use-value, and not in Marx’s manner, by quantity of labour time.

This is because neither equilibrium values, nor equilibrium prices, can actually function as prices: they cannot serve as the basis of any actual exchange. Claims that such ‘prices’ are concrete or empirically-accessible are false: equilibrium prices are a concealed value-concept, attempting to explain what is observed in terms of something not directly observed. However unlike Marx’s non-equilibrium values, whose point of departure is an actual market which exists through its motion, equilibrium prices presuppose an ideal market which cannot exist because has no motion. Whereas Marx’s values do exist and do underlie what is observed, equilibrium prices do not exist and cannot underlie what is observed.

This defines their ideological function, since market failure cannot be derived from a theory which assumes a priori that the market works. But it also renders them incapable of performing a scientific function, that is, representing reality.

The ‘transformation problem’ does not cease to exist. The relation between such prices and actual market prices must still be explained and measured. It is wished away by a dogmatic assumption, asserted without proof, that equilibrium prices approximate the behaviour of real prices. I will show this is necessarily false because no real prices could be approximated in this way. If, abandoning this dogma, we transform comparative static prices so that goods can exchange at these ratios, the amount of money for which they exchange is determined not by the labour expended in producing them, but by the magnitude of their use-value, directly contrary to Marx’s value-concept.

This problem simply does not arise with either Marx’s values or Marx’s prices of production which, when determined without assuming equilibrium, are perfectly capable of functioning as the basis of exchange and do not violate the determination of value by the magnitude of labour time…

… Marx’s mature work is a systematic critique of Ricardo’s exclusive concentration on the quantitative aspect of value at the expense of the qualitative:

Ricardo’s mistake is that he is concerned only with the magnitude of value. Consequently his attention is concentrated on the relative quantities of labour which the different commodities represent, or which the commodities as values embody. But the labour embodied in them must be represented as social labour, as alienated individual labour. In the price this representation is nominal; it becomes reality only in the sale. This transformation of the labour of private individuals contained in the commodities into uniform social labour, consequently into labour which can be expressed in all use-values and can be exchanged for them, this qualitative aspect of the matter which is contained in the representation of exchange-value as money, is not elaborated by Ricardo. This circumstance – the necessity of presenting the labour contained in commodities as uniform social labour, i.e. as money – is overlooked by Ricardo. (Marx 1972: 131)

A key formulation in Capital Volume I connects these two critiques:

In order to find out how the simple expression of the value of a commodity lies hidden in the value-relation between two commodities, we must, first of all, consider the value-relation quite independently of its quantitative aspect. The usual procedure is the precise opposite of this: nothing is seen in the value-relation but the proportion in which definite quantities of two sorts of commodity count as equal to each other. It is overlooked that the magnitudes of different things only become comparable in quantitative terms when they have been reduced to the same unit. Only as expressions of the same unit do they have a common denominator, and are therefore commensurable magnitudes.(Marx 1979:141)

Marx’s concern to reduce incommensurate magnitudes to a common denominator is often portrayed as metaphysical. And indeed, if supply did equal demand, the qualitative aspect could be safely ignored. When the scales balance, does it matter why? The measurement itself connects the measured objects: what they have in common is ‘being weighed’. We can build scales without a concept of mass, which is why they existed long before Newton.

The problem is what happens when they don’t balance. With any piece of machinery; you only really need the manual when it breaks. Awkward questions then arise like: how fast does it move? What force does the imbalance exert? What impact does the motion have on the requirements of balance in any case? We then have to connect its components to the rest of nature. Only when Galileo, Newton and their followers asked such ‘metaphysical’ questions could physics formulate general laws of nature with the general concepts of mass, energy and force.

Economics, when it worries about such matters, resorts to the metaphor of a pendulum, oscillating about a static position. But there is a vital difference. The pendulum can survive without moving, but the market cannot. Because it must move to exist, its existence can only be explained by its movement. So rast ich, so rost ich. A tornado in stasis is no longer a tornado. Like a tornado, an avalanche or indeed a living being, the market exists as a self-sustaining entity only in and through movement;

It is not just that markets fail: the point is that this is how they work. Only when supply differs from demand do the mechanisms which equate them come into play; moreover the very process of equalisation in one sphere disequilibriates all others, whereon eternally restless capital disrupts all balance as it scrambles for gains and stampedes from losses in its thirst for surplus profit, the life force of the market.

There is no economic pair of scales. A market is never in a state which permits exchange at equilibrium prices. From the very outset we have to follow Newton and Galileo, and study its motion with general concepts, the equivalent of mass and energy, which can express all possible exchange relations in terms of unifying concepts, so that we can compare them and say things about them which apply to all of them.

We need, in short, a way of talking about price which does not depend on the relation between supply and demand. We need to enquire qualitatively what the value of a commodity consists of, external to and independent of any subsequent exchange relations it enters into, before and in order to study the quantitative phenomenon of real market prices."

(from The Limits of Ricardian Value: Law, Contingency and Motion in Economics) by Alan Freeman, University of Greenwich , 1 November 1998, http://www.iwgvt.org/iwg_sessions.php?year=1999

chris

Bodach gun bhrigh
Oct 12 2005 19:18
redtwister wrote:

Marx isn't on about 'economic determinism', but more about the relation between human beings and the world they produce, and their conscious and unconscious relation to it. Capital creates 'homo economicus', not Marx and he is trying to show how that happens and why.

Good point, I think I'd agree that there is determinism, just not entirely economic

Quote:

Marx never argued that socialism/communism is inevitable. Not only that, workers becoming conscious of the meaning of their actions, that their struggle is communism, is central to his work.

Fair enough

Quote:
I think Adorno is basically correct, but I don't think he at all would think he was saying something that would shock Marx (or Hegel for that matter, as the whole Unhappy Consciousness section of the Phenomenology of Spirit is involved with that, among other places.)

Please don't make me read Hegel, my brain boils. Sorry I'm not more communicative, I've been on the computer too long.

bgbh

redtwister
Oct 12 2005 20:52
Bodach gun bhrigh wrote:

Please don't make me read Hegel, my brain boils. Sorry I'm not more communicative, I've been on the computer too long.

bgbh

I would never consider forcing anyone to read Hegel. Just like spankings, bondage, and S&M, its not cool if it isn't consensual, and if it is, well, then you're freaky.

Chris

Bodach gun bhrigh
Oct 12 2005 21:46
redtwister wrote:

I would never consider forcing anyone to read Hegel. Just like spankings, bondage, and S&M, its not cool if it isn't consensual, and if it is, well, then you're freaky.

Chris

That's a relief, in one sense at least, I am not freaky grin

afraser
Oct 25 2005 22:35
Redtwister wrote:
I am still not quite sure why, and I haven't had the time to figure out why, but the phrasing "Socially necessary labor time determines equilibrium price" is an incorrect representation of Marx's take on the matter. Do you have a reference to where this formulation is used by Marx or is this an extrapolation on your part?

Extrapolation on the part of G A Cohen, who continues:

G. A. Cohen wrote:
I want to expose, in some detail, how Marx arrived at the popular and strict doctrines [of his theory of value] in the opening pages of Capital.

Capital begins with what Marx rightly regards as the elementary phenomenon of capitalism, which is the commodity. A commodity is an object which ‘satisfies human wants’ [Capital, 1, ch1] (and is therefore, in Marxian language, a use-value), and which undergoes market exchange with other such objects, the ratios with which it exchanges with them constituting its exchange-value. So a commodity is a use-value which is a ‘bearer of exchange-value’.[ Capital, 1, ch1]

Focus on the commodity leads to the first explanandum of Capital which is the fact that commodities exchange against one another not haphazardly but, within given limits of time and place, in definite proportions.[Capital, 1, ch1] It is required to explain why they exchange in the ratios they do, or, in more modern terms, their equilibrium prices. Why for example, is one quarter of corn worth x hundredweight of iron?

Marx replies that if, as he puts it, ‘1 quarter corn = x cwt. iron’, then in each ‘there exists in equal quantities something common to both ... Each of them, so far as it is exchange-value, must therefore be reducible to this third’, which is its value, and of which exchange-value is but ‘the mode of expression.[Capital, 1, ch1] Value, then, is the absolute magnitude which the relative magnitude exchange-value reflects: the value of a given commodity is that property of it, whatever it may be, which, together with the value of other commodities, determines the given commodity’s exchange-value. Note that the way in which Marx introduces the concept of value ensures that it is true by definition that value determines equilibrium price.

The point [immediately following in Capital, 1, ch1 - AF] about inefficient labor leads Marx to the conclusion that value is determined not, as the popular doctrine says, by the amount of labor time spent producing the commodity, but by the amount of time required to produce it under average conditions of productivity, which Marx calls ‘socially necessary labor time’. [Capital, 1, ch1]

G. A. Cohen, History, Labor, and Freedom: Themes from Marx, Chapter 11: The Labor Theory of Value and the concept of Exploitation.

It is possible to read Marx differently, to deny any connection between Marx’s ‘value’ and equilibrium price. Alan Freeman does that. It saves the day in avoiding any failures, such as the transformation problem, in relating socially necessary labor time and equilibrium price, but comes with the disadvantage of eliminating all useful meaning from Marx’s ‘value’, from his surplus ‘value’, from his economic writings generally. Quite a disadvantage.

What Rubin is saying on this point (and he says a lot on it) is lost to me. I’ve read his book several times now, and am none the wiser. It is possible that he was in agreement with neoclassical economics but was attempting to hide that fact from the Cheka (Or he may have been pre-empting Alan Freeman, and attempting to hide that from the Cheka). At any rate, if he was attempting to hide his meaning, he did a good job. Perhaps someone could summarise Rubin’s (or, better, their own) view on the relationship (or lack thereof) between Marx’s value and equilibrium (production) price.

Redtwister wrote:
Marx never argued that socialism/communism is inevitable.

But

Marx and Engels wrote:
Its [the bourgeoisie's] fall and the victory of the proletariat are equally inevitable. [http://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch01.htm and http://www.marxists.org/archive/marx/works/1867-c1/ch32.htm#n2]