Date: Wed, 6 Mar 1996 12:11:08 +0100
From: m-14970-AT-mailbox.swipnet.se (Hugh Rodwell)
Subject: Re: "Value Pump"


Chris writes:

>I was sorry there was not more comment on Hugh Rodwell's post
>of 29th Feb on what he calls the Value Pump.

>In terms of Hugh's argument, I endorse the point that a commodity is
>not just a thing. For example Marx makes clear that a private
>teacher is exploited: he/she produces a commodity (an hour, a term
>of education).

(Chapter and verse on the teacher please Chris)

and:

>But in order to get the hang of the posited Value Pump, can you say Hugh
>why you use the metaphor "pump". What is the pressure, what/who is
>applying it? I tend to assume that the different patterns we see are part
>of an emergent system. The word pump sounds a bit too much like
>an external cause to me.

The pressure comes from competition - the social force behind the
equalization of the rates of profit in different sectors of the economy.
Marx explains the mechanisms involved in Capital III, part 2, chs 9 & 10
('Formation of general rate of profit' and 'Equalization of general rate of
profit'). For each sector of the economy, competition is in fact an
external cause, even though it's internal to capitalism as a system.

Marx writes, for instance, a couple of pages from the end of ch 10 (Prog
Pub 1966 p 195):

        Now, if the commodities are sold at their values, then, as we
        have shown, very different rates of profit arise in the various
        spheres of production, depending on the different organic
        composition of the masses of capital invested in them. But
        capital withdraws from a sphere with a low rate of profit and
        invades others, which yield a higher profit. Through this
        incessant outflow and influx, or, briefly, through its
        distribution among the various spheres, which depends on how
        the rate of profit falls here and rises there, it creates such
        a ratio of supply to demand that the average profit in the
        various spheres of production becomes the same, and values are,
        therefore, converted into prices of production. Capital
        succeeds in this equalization, to a greater or lesser degree,
        depending on the extent of capitalist development in the given
        nation; i.e., on the extent the conditions in the country in
        question are adapted for the capitalist mode of production. ...

It must be remembered that value, as congealed (objectified) labour, is
material and that it is expressed in terms of the general equivalent
commodity, money. Once it is realized that society cannot distribute more
value than is actually produced, and that value is related to socially
necessary labour-time, then it becomes obvious that an equalized general
rate of profit must cover up very unequal rates of surplus value in
individual spheres of production.

The process of drawing off value from low-tech, high labour sectors (low
composition of capital) to technologically advanced sectors (high
composition of capital) in order to equalize the respective rates of
profit, then becomes clearer. The differences between the prices of
production (including the general rate of profit) and the values (including
surplus value) of a society's products, even though they can be enormous in
individual spheres of production, vanish when social production as a whole
is considered.

The process could be described as a slopping over of 'excess' value to
sectors deficient in value, or it could be described as a siphoning off of
'excess' value - or you could see it as a 'pump', as I like to. Since it's
a process of vital importance to capitalism, since it operates
automatically and unconsciously, and since it permeates every nook and
cranny of capitalist society, I think the parallel with the heart and the
circulation of the blood suggested by Value Pump isn't too far-fetched.

There are two very important consequences of this relationship between
value and profit. One is the fact that it completely conceals the
significance of value in production and in society. As Marx says in ch 9
(Prog Pub pp 167-68):

        At a given degree of exploitation, the mass of surplus-value
        produced in a particular sphere of production is then more
        important for the aggregate average profit of social capital,
        and thus for the capitalist class in general, than for the
        individual capitalist in any specific branch of production. It is
        of importance to the latter only in so far as the quantity of
        surplus-value produced in his branch helps to regulate the average
        profit. But this is a process which occurs behind his back, one he
        does not see, nor understand, and which indeed does not interest
        him. The actual difference of magnitude between profit and surplus-
        value - not merely between the rate of profit and the rate of
        surplus value - in the various spheres of production now completely
        conceals the true nature and origin of profit not only from the
        capitalist, who has a special interest in deceiving himself on this
        score,  but also from the labourer. The transformation of values
        into prices of production serves to obscure the basis for
        determining value itself.

The other is that it completely confuses the relationship between
industrial workers in large-scale modern industry and other workers in
agriculture and services. In as far as all labour tends towards the average
for unskilled (perhaps these days it would be better to say 'basically
skilled') labour power, each worker will produce the same value by his
daily exertions. But the amount of value produced in each sector will vary
enormously with its productivity. The more machinery, the less value
produced. The lower the degree of automation etc, the more value. Linked to
this is the question of the expansion or contraction of the working class.
If we don't take the value production of the agricultural and service
sectors into account, it's easy to draw the empiricist conclusion that the
working class is shrinking and that the subjective preconditions for
socialism are ebbing fast.

I made my original comments because Doug H's observations indicated to him
that the working class (even the industrial working class) was growing in
an international perspective. I wanted to see if we could get some more
Marx into the discussion.

Cheers,

Hugh




     --- from list marxism-AT-lists.village.virginia.edu ---

     ------------------