Date: Mon, 20 Oct 1997 19:40:24 +1000
From: Rob Schaap <rws-AT-comserver.canberra.edu.au>
Subject: Re: M-TH: The Next Thinker: The Return of Karl Marx (The New


G'day Justin,

A helpful post.  Ta.  If anyone's interested, I'll try to outline a
beginner's take on the LTV posts so far (both so that they might be
corrected by the patient, and implications suggested to the curious).

>we should ask, what do we want a theory of value for? Marx developed the
>LTV, his LTV, because value theory was the way one did political economy
>from Petty (late 17th C, maybe the inventor of the LTV) through Marx
>himself, before the marginalists invented marginalism, or formalized it
>anyway, in the work of Walras, Jevons, and Marshall. Marginalism offers a
>way to do economics without a theory of value, or with a wholly subjective
>one.

I dare say we should not underestimate the centrality of at least the
qualitative aspects of the Labour Theory of Value - it is, I suppose, what
you get when you apply the tenets of historical materialism to the
capitalist mode of production.  The absolute denial of the logic of the LTV
would then constitute a rejection of Marx, both as philosopher and
political economist.  I tend to agree, at my remedial level anyway, that
one need not engage with the maths to subscribe to the logic and enjoy its
analytical benefits.

>But what Marx thought the LTV was important for was, among other
>things, the following:

>1. Showing that labor could be exploited without cheating, in the normal
>operation of capitalism. In short, explaining where profit comes from.

In may get two guest lectures (to first-year communication students) on
Marx next semester, I shall have a chance to talk about exploitation.  I'm
toying with the following 'ten-point plan'.  I include it here because
parts of it may need correction - but also because it may serve as a
starting point (along the lines introduced by Doug and Justin) for
determining how detailed an account of the LTV is necessary for Marxian
political economy to maintain its coherence, its relationship to HM, and
its political import.

At this early stage then, I contend the following ten points are
*absolutely required* if capitalism, exploitation, profit and crisis are to
be explained (and the contradictions of capitalism brought to the surface
for beginners to see).  What, incidentally, does LTV have to say that I
have not incorporated here?

                   *Marxian Political Economy in Ten Points*

(1) That more is produced than is necessary for all to survive;
(2) That the surplus is neither evenly distributed nor distributed
according to concrete labour ratios (not in themselves central issues
perhaps, but something we might want to explain);
(3) That the salient determinant of where that surplus goes is the social
acceptance of private ownership of society's productive assets and the
distribution of that ownership.  And that this is because;
(4) those who do not own these assets, must work to live;
(5) any contract between a private owner and a worker is therefore at once
     (a) a function of two agentic individuals, who while contract they
ultimately must, can each choose with whom and on what terms to contract;
and
     (b) reproductive of a class relationship whereby workers receive for
their labour the survival (and, if circumstances allow, which they cannot
forever, also the security and comfort) of themselves and their families;
and owners receive for that part of their material wealth spent on workers
a realisable equivalent to material wealth exceeding the quantity spent.
(6) the latter class ends up with society's surplus.  The former class
cannot accumulate because surplus comes only from buying the labour power
of others at roughly the exchange value, a magnitude which ever tends to be
less than the use value, because no competing employer can long afford to
offer workers remuneration approaching their labour powers' use value.
(7) as owners must compete for their own survival - they must utilise their
singular (class-based) capacity to accumulate, in order to reinvest as
competition requires.
(8) Competitive reinvestment is guided by the requirement to cut costs.  An
employer has the power to vary only what s/he pays workers.  Machinery
costs what it costs, and depreciates at a fixed rate.  Therefore, the
exchange rate for labour power diminishes across the board.  This allows
each employer to pay workers less, approaching, inexorably, subsistence
levels.
(9) But competition demands also that employers have as few workers as
possible.  Technological adoption is centrally guided by the imperative to
compete.  By this process, the employer is effectively depleting that
component of his/her capital that affords him/her the surplus basic to the
whole accumulation process under capitalism.
(10) Competition requires that all employers act thusly.  Therefore the
aggregate of extracted surplus diminishes while those employed get more
volatile and those unemployed, and thus most desperate, also become more
numerous.  The interests of the employed and the unemployed are the same
and they are revolutionary.

>2. Revealing the long term dynamics of capitalism, in particular, its
>inevitable fall via the tendency of the rate of profit to fall.

Maybe the inevitable fall of capitalism (due to the above explication), but
you'd have to satisfy yourself with the *possible* ascendance of socialism.
You gotta say 'possible' because the link between the objective and the
subjective (if you'll pardon my innocent positing of an unfashionably
modernist dichotomy) is demonstrably not causal.  Humans show a formidable
capacity to choose surprising options from the menu of conceivable actions
each objective moment affords them.  In my view, many marxists show an
equally formidable capacity for representing historical materialism as the
implicit definition of humans as creatures with no identity other than that
applicable to all organisms: that they must eat and that work must be done
so that they can eat.  HM can explain structure and tendency but it can not
predict a socialist revolution per se, just a traumatic demise of the
current order - which leads us to ...

>3. Explaining medium term dynamics of capitalism, in particular, crisis
>theory.

Crisis seems to me to take one of the following forms - immiseration of the
proletariat (underconsumption) or so high an organic composition that
insufficient surplus-extraction capacity is left to the bourgeoisie.  These
are logical endpoints, but so far hitherto unappropriated parts/populations
of the world and formerly uncommodified social goods (esp. 'information')
have been available for capitalist predation.  It's impossible to timetable
the dissolution of capitalism.  Given the only partially raped seas and the
hardly fondled outer space, the whole idea of inevitable dissolution may
yet be moot (a political message for those socialists who think the theory
demands nought but patience and an eye for the revolutionary moment, ie.
obviates praxis).

>4. De-reifying and de-fetishizing various aspects of capitalism by showing
>that labor alone is productive and interest-bearing capital, etc.  are
>not, not really.

Well, I guess we've established that labour alone is productive under
capitalism (and not just an objectified 'factor of production').  Interest,
for instance, must logically be paid out of surplus provided by workers
somewhere.

>5. As a theory of price, to explain why commodities exchange in stable
>ratios for certain monetary amounts.

Do commodities exchange in stable ratios?  How is this established?
Because the LTV (even in its innocently bastardised form here) allows no
other possibility?  If so, is that enough?

I'm still wrestling with the ever increasing role of commodified
information in this respect - I think it's soluble (value must be generated
somewhere in the world to support the exchange value information is
demonstrably exacting at the moment) - but I think we have to think on that
yet.

I have a feeling I'm writing this last sentence to a very small and patient
readership.  Thanks comrades.  A reply from any of you would be most
gratefully accepted and fondly remembered.

Cheers,
Rob.





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Rob Schaap, Lecturer in Communication, University of Canberra, Australia.

Phone:  02-6201 2194  (BH)
Fax:    02-6201 5119

************************************************************************

'It is questionable if all the mechanical inventions yet made have
lightened the day's toil of any human being.'    (John Stuart Mill)

"The separation of public works from the state, and their migration
into the domain of the works undertaken by capital itself, indicates
the degree to which the real community has constituted itself in
the form of capital."                                    (Karl Marx)

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