Date: Mon, 17 Feb 1997 23:05:42 +0100
Subject: M-G: Public ownership, landlords & transformation


Justin writes:

>Hugh discerns no principled objection in my view to the existence of a
>lanaded gentry or the private ownership of land, apart from my own
>psersonal distaste for such arrangements. Frankly, I'm puzzled. My
>objection to private ownership of productive assets derives from the fact
>that I'm a socialist, and for this reason think that the productive assets
>should be publicaly owned. That's bottom line for me, along with worher
>control of production and investment.

Perhaps our disagreement is more over *who* or *what* should own publicly
owned assets. Also, I see a contradiction between Justin's welcome will to
socialism and his apparent inability to move beyond specifically bourgeois
principles of social and economic analysis. His problems with the labour
theory of value illustrate this very well.

Justin continues:

>I will remark that I haven't given a great deal of thought to the landed
>gentry. In America we got rid of it in our Civil War, and haven't had to
>worry about it since. I would of course as a socialist oppose any attempt
>to reconstitute this antiquiated class,which you still have hanging in
>England.

Forget the "gentry" bit -- that's a red (he-he) herring. Landowners still
cream off rent, in America and throughout capitalist civilization ><. Does
Justin consider landlords to be a class (antiquated or not)?

And then this:

>High also thinks that Marx solved the transformation problem. (To those of
>you who complained about _my_ bringing this up: I didn't: Mark did; though
>perhaps I am culpable for responding.) It's manifest that MArx did nop
>such thing. The T-problem was solved, under very special conditions, by
>Bortkewiesz and later by others, other special conditions also. The fact
>is, Marx's silution is mathematically fallicious, as is well known. He
>lacked the mathematical apparatus to do the job.


In the first place, there is no transformation problem. It's an invention,
the same way as the equilibrium problem of Book II is an invention. Book
II, equilibrium, Book III, transformation -- there you have the straw men
created by vulgar economists in Marxist clothing.

The thing about the transformation of values into prices of production is
that it is an *automatic* consequence of the equalization of the rate of
profit throughout the capitalist economy. Instead of the profit realized by
the individual capitalist reflecting the surplus value extracted from his
workers, it reflects the surplus value accruing to him as his share of the
aggregate surplus value of society on the basis of the size of his capital
and the average rate of profit. Marx makes this as plain as anyone can wish
in the early chapters of Book III.

It only becomes a problem if you fetishize prices into the primary
phenomenon, and treat value as some kind of ideological mirage. To the
Marxist theory of commodity-producing society, value is as tangible as
gravity is to physics. Nothing escapes its thrall. Labour produces value,
and this value is what is available to be distributed among the members of
society. All the rest follows from this, and prices are among the
mechanisms developed to facilitate this distribution. Start pretending
there is more (or less) to be distributed than the value produced and you
run into brick walls of various kinds (the different brick walls depending
mainly on who is trying to treat what fetish as a reality and on behalf of
which class), also known as crises.

The equilibrium palaver treats the crises in capitalism as unnecessary
disturbances of a basically balanced or at least balanceable system. It is
notable that its "solutions" have the same tell-tale mark of Cain as the
solutions to the transformation palaver -- they are complicated and they
are rife with special conditions.

Now the equilibrium problem of Book II is no problem because capitalism is
not a system in which equilibrium is a normal or typical state. Marx's
tables demonstrate the possibility of equilibrium on stringent conditions
(and always ascertainable only after the event, which is always fleeting),
but much more they demonstrate the inherent instability of capitalism,
which no wise management, not even that of willing Austro-Marxist
class-collaborators, can cure.

Likewise, the transformation problem of Book III is no problem, because it
is something that happens all day every day in the capitalist mode of
production. Sie tun es, aber sie wissen es nicht -- they do it, but they
are not aware of it. The value is there, as the product of aggregate social
labour. It is distributed by way of market prices, which reflect production
costs and an additional factor representing the average rate of profit.
Labour-intensive sectors (producers of much labour value) get less than
their share of the surplus value socially available, while
capital-intensive sectors (producers of little labour value) get more than
their share. All day every day. So a "solution" of the problem that relies
on special conditions is useless. Either this transformation is an
absolutely central part of the everyday process of capitalist production
and distribution, or it is nothing.


I really don't know why people who don't accept the labour theory of value

a) insist on calling themselves Marxists

or

b) insist on retaining bits and pieces of Marx's work even though the
foundation is missing.

It's a bit like praising Einstein to the skies, but refusing to accept the
reality of gravity.

Anyway the net effect is to have people crawling round the legs of Great
Individuals (such as Marx and Einstein, for instance) and hiding in their
skirts instead of standing on the shoulders of outstanding theorists and
synthesizers and getting a better view for it.

Cheers,

Hugh




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