Date: 	Sat, 25 Nov 1995 14:54:52 -0300
From: jinigo-AT-inscri.org.ar (Juan Inigo)
Subject: Value: Organic determinations vs. tautological relations


John Ernst writes:

>For Marx, if we
>view the accumulation process in material terms,
>the inputs do not grow as fast as outputs for
>a given labor force.  Yet, when Marx views that
>same process in value terms, he sees inputs growing
>faster than outputs.  Hence, the tendency of the
>falling rate of profit.

Commodity-production, and therefore, capitalist-production, is a historical
specific form in which the process of social metabolism autonomously
regulates itself by making the process of material production to be, at the
same time, the process that produces the general social relation, i.e.,
value relations. The tendency of the rate of profit to fall is a specific
value relation, that is, a form inherent in the regulation itself of the
process of social life, not a relation that inheres in the materiality
itself of this process.

But John starts by mistaking material relations for value relations, by
emptying value itself from its historical specificity. Then, he tries to
place those material relations into a model as if they were the direct
determinants of a historically specific value (i.e., social) relation such
as the falling rate of profit. On doing so, John clashes against the
concrete quantitative determination of those material relations. Let's
consider the technical composition of capital. This composition lacks in
the real world an immediate quantitative expression that can be placed into
an equation, and therefore, into a model. Its evolution can only be
apprehended in a very rough way, after it has gone through a quite
substantial change, and even then, in a non quantifiable unit.

In the real world, nobody bothers about this capricious quantitative
behavior of the technical composition. And nobody bothers about it because
it is meaningless in itself, both from the material point of view of
production and from the point of view of the social regulation of
production. From the former, it is all about the proper combination of
different use-values, including concrete living labor. From the latter, it
is all about how the material change fits into the necessity of capital to
valorize itself. So the technical composition will change in a certain
direction as long as the social regulation of production demands from it
this change and, only then, this change will be reflected in the production
of the social relation, since this relation is produced through the
material process of production itself.

What makes the rate of profit fall is not the evolution of the technical
composition as such, but the evolution of the organic composition of
capital, i.e., the evolution in the value composition of capital as this
composition is determined by the technical composition of capital it itself
rules. And the necessary unity between the technical composition and the
organic composition can only be discovered by reproducing in thought the
development of the value-form that the products of labor take in
present-day society. To do so, it is necessary to start from the more
abstract determinations of the value-form: an increase in productivity
leaves the amount of the value created by a given amount of labor
untouched, thus making the unitary value of the use-values produced fall in
the inverse proportion.

John hates this starting point, since it shows how inverted his mental
representation of the real-world is. To construct this representation, John
needs to assert that a rise in productivity does not make the unitary value
fall, hence moral depreciation does not exist, etc.. But although John
finds inspiration in Keen, he is not a Keen himself. The inversion that
John achieves through his "ideal" method (his words) is of another sort.
What John does is to face the determinations of capital accumulation
through what I exemplified at the very beginning of our discussion as the
"what had I been, were I not what I am" point of view. Once concrete real
forms are inverted by abstracting them from their determinations, a never
ending apparent debate can follow concerning if, what actually makes those
concrete real forms be what they are, has been "postulated" by Marx and has
to be postulated or not as a condition for the theoretical confirmation of
their actual existence through models. These debates need to start by
turning every concrete real form into an abstraction, but they are not an
abstract form in themselves: they are one of the stuffs vulgar economy is
made of.

Let us consider again John's initial assertion and the remarks whith wich
he completes it:

>For Marx, if we
>view the accumulation process in material terms,
>the inputs do not grow as fast as outputs for
>a given labor force.  Yet, when Marx views that
>same process in value terms, he sees inputs growing
>faster than outputs.  Hence, the tendency of the
>falling rate of profit.  This makes Marx's concept
>of value crucial to an understanding of accumulation.
>Neo-Ricardians who view value as redundant are
>thus unable to agree with Marx on the falling rate
>of profit or they see it only in cases where the
>material inputs increase faster than the outputs.
>Marx, to them, does, indeed, thus become a "minor
>post-Ricardian."

Notice how John is illustrating here what I said above: an apparent
discussion with Neo-Ricardians that has no substance other than abstracting
commodities from their historical specificity, so the concrete private
labor that produces them becomes directly placed in a model as its
opposite, the socially necessary abstract labor that produces them. From
this starting point on, it is clear that Neo-Ricardians are not dealing
with capital accumulation as such, but with its ideological mystification.
Consequently, they are not talking about any real evolution in the anyway
abstractly labeled "inputs" and "outputs."

But John is not interested in criticizing Neo-Ricardians from their very
base; he only wants to oppose to them yet another abstraction, of course,
in the name of "Marx's views," of "Marx's concept of value." What value is
as a real form, something that Marx discovered by reproducing the
development of its determinations in thought, has been already expelled
from this kingdom of models. So John sees no way to deal with
Neo-Ricardians other than by opposing to them, not the historical
specificity of the social form of the product itself, but the apparent
materiality itself of this product (so-called material inputs and outputs).
Is this such an abstract relation that it even cannot be measured? Who
cares! Once he has opposed his material abstraction to the Neo-Ricardians',
he just asserts "when Marx views that same process in value terms, he sees
inputs growing faster than outputs. Hence, the tendency of the falling rate
of profit."

Behind its pomposity, John's assertion is nothing but an empty construction
that abstracts both from Marx and the rate of profit. Let's assume that
there is only circulating capital. Let us consider in the first place the
absolute increase in value. The increase in the "input" constant capital
will be exactly the same as the increase in the "output" that corresponds
to the reappearance of the value of the means of production in the value of
the product produced with them. So, according to John's claim, we are left
with the following condition for the rate of profit to fall: that the
variable capital itself increases. But, considered in itself, an increase
in variable capital leaves the amount of value produced in a given time
unchanged. Therefore, the rate of surplus-value should be falling. Adding
to something John has to say about "blaming laborers for crisis," such an
evolution is just an incoherence: the increase in productivity that
underlies the supposed evolution in variable capital and surplus-value has
no determination other than the production of relative surplus-value and,
therefore, the increase in the rate of surplus-value. I am positive that
John will not claim that the problem arises here from the exclussion of
fixed capital. Such a claim would mean that the fall in the rate of profit
depends on the way capital is composed from the point of view of its
turnover (fixed and circulating capital) and not from the point of view of
its composition as an organ that produces surplus-value (variable and
constant capital).

In fact, John himself places the problem in terms of rates of increase. So
let us consider now the relative increase in value. Let's take the relation

c + v + s = C'

and assume that "c" increases in "dc", so

c + dc + v + s = C' + dc

with (v + s) remaining unchanged, since they correspond to the value
produced in an unchanged given labor-time. Now, according to John, Marx
discovered that

s / (c + dc + v) < s / (c + v)

because

(c + dc + v) / (c + v) >  (c + dc + v + s) / (c + v + s)

Now, let us replace c, v, s with the quantities p, q, z of things that have
some commensurable substance; any sort of things, apples, horses, vulgar
economists, accountants, etc.. When is the relation

z / (p + dp + q) < z / (p + q)

with

(q + z) = constant

verified? Of course, only when

(p + dp + q) / (p + q) > (p + dp + q + z) / (p + q + z)

This is a purely formal relation that mechanically inherits in the
structure of the mathematical system itself, since the inclusion of z in
the numerator and in the denominator of the second term makes the increased
element lose relative weight, unless q falls and z consequently rises in an
amount sufficient to invert the relation, which immediately implies it has
inverted the first relation too.

Is John telling us that Marx discoveries concerning the falling rate of
profit come down to the discovery of a tautological relation inherent in a
given mathematical system whichever its content? Well, John would not be
the first one to make such a crude sort of inversion: Morishima did it
already when he claimed that the prices of production are not determined as
the developed form that value takes since capital needs that each
individual capital appropriates an aliquot part of the total surplus-value
(given the differences in the organic composition and in the turnover rates
of individual capitals), but as the eigenvalues of the system of
simultaneous equations that formaly represents the real quantitative
relations inherent in a certain step in the development of surplus-value
into average profit.

No, the true fact, discovered by Marx, is that the rate of profit does not
tend to fall because "in value terms, he sees inputs growing faster than
outputs." It tends to fall because, on developing the production of
relative surplus-value, an increasing mass of dead labor is needed to put
into action a given amount of living labor, thus making the organic
composition of capital grow, and therefore, lowering the relation between
the surplus-value produced and the total capital placed into action to
produce it, with the increase in the rate of surplus-value counteracting
this effect.

The only way of aprehending this concrete fact beyond any appearance to
consciously act upon it, is by reproducing in thought the complete
development of its determinations, starting from their simplest form. This
is exactly what Marx does and what the production of the proletariat's
capacity for consciously ruling its revolutionary action dayly demands to
be done on facing each concrete real form in its day by day renewal. On the
contrary and according to his own words, John wants to start by immediately
placing himself at the end of this development, (in his conception, "start
at the other end of Marx") "with accumulation." On doing so, he can't go
beyond turning every material and value relation into an ideal abstraction
emptied of any real content other than the one mechanically forced into it
by the tautological structure of the model itself. And this is exactly what
vulgar economy expects him to do.

Juan Inigo
jinigo-AT-inscri.org.ar



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