1. We all now seem to agree (me, Gil, Mike, Tony, etc.) that the subject of
Capital from the beginning is capitalism. This in itself is an advance. At
least it rules out the standard Engels-Meek-Sweezy-Mandel interpretation of
"simple commodity production".
2. However, I now realize that we have different interpretations of what
Marx meant by "capitalism" - at least Gil and I have different
interpretations. I argue that Marx defined capitalism to include the
purchase and consumption of labor-power, and Gil argues that Marx defined
capitalism as "the appropriation of surplus-value based on some circuit of
capital" (1586), which may or may not include labor-power. I think Mike
agrees with my interpretation and I am not sure about Tony. Gil interprets
Tony as agreeing with him, but I am not sure. Tony can speak for himself.
Marx's prior specification of his theory as a theory of the capitalist mode
of production (including labor-power) means that his theory of surplus-value
tries to explain surplus-value within this capitalist mode of production;
his theory of surplus-value does not try to determine whether surplus-value
is possible in non-capitalist modes of production. The latter question is
Gil's question, not Marx's question. In other words, Marx's prior
specification of the subject of his theory determines the nature of the
questions which his theory is intended to answer.
Marx's prior specification of the subject of his theory also affects the
logic of the theory at key points. One important example of this effect,
that is relevant t the current discussion of Chapters 5 and 6, is given
below in #6 (in connection with Marx's argument that "the capitalist class
as a whole cannot defraud itself").
3. At the same time, I agree with Tony that, even if capitalism is defined
to include labor-power (as I argue Marx did), Marx still tried to derive the
NECESSITY of labor-power in capitalism, in the sense that labor-power is
necessary to explain surplus-value in the capitalist mode of production.
This is in keeping with Marx's general logical method (heavily influenced by
Hegel) of trying the explain the NECESSARY CONNECTIONS between the various
aspects of capitalism.
Therefore, the crucial issue in this debate is the adequacy of Marx's
derivation of the necessity of labor-power in Chapters 5 and 6 of Capital.
4. Gil argues that Marx's derivation of the necessity of labor-power
depends on the assumption that the prices of individual commodities are
equal to their values, i.e. depends on Marx's conclusion at the end of
Chapter 5 that surplus-value must be explained on the basis of the
assumption that the prices of individual commodities are equal to their
values.
"The analytical significance of the purchase and subsumption of labor-
power for the logic of capitalist exploitation derives from the analytical
significance or centrality of the case of price-value equivalence. (1228)
Gil argues further that, since there are historical circumstances in which
the prices of individual commodities are not equal to their values, Marx's
derivation is invalid, and we must seek other "historical-strategic"
explanations for the necessity of labor-power in capitalism.
5. This interpretation of Marx' theory of surplus-value, as requiring that
the price of individual commodities must be equal to their values, makes no
sense from the perspective of the macro "capital in general" interpretation
of Volume 1 (which I have presented in several posts, and which is presented
more thoroughly in my article in Marx's Method in Capital). According to
this "capital in general" interpretation, the prices of individual
commodities are not analyzed or determined at all in Volume 1. The
variables determined in Volume 1 are: the aggregate price of the total
commodity product and the aggregate surplus-value. Individual prices are
then determined for the first time in the micro "many capitals" analysis in
Volume 3, as an aspect of the distribution of the total amount of
surplus-value.
6. Gil's argument rests primarily on Marx's statement at the end of Chapter
5 that:
The transformation of money into capital has to be developed on the basis
of the immanent laws of the exchange of commodities, in such a way that
the starting-point is the exchange of equivalents. The money-owner ...
must buy his commodities at their value, sell them at their value, and yet
at the end of the process withdraw more value from circulation than he
threw into it in the beginning.
However, I have argued in (1223) (to which Gil has not responded) that this
assumption that individual prices are equal to their values is only a
provisional and inessential assumption, and means only that: (1) this is the
only assumption regarding the prices of individual commodities that is
consistent with the labor theory of value at this abstract, aggregate level
of analysis; (2) since the aggregate amount of surplus-value cannot be
explained on the basis of divergences of individual prices from their
values, this aggregate surplus-value must be explainable on the assumption
that individual prices are equal to their value. (Please see 1223 for
further details)
Point (2) is made clear by the first sentence to the footnote to the above
passage:
The reader will see from the foregoing discussion that the meaning of this
statement is only as follows: the formation of capital must be possible
even though the price and value of a commodity be the same, for it cannot
be explained by referring to any divergence between value and price.
Marx's argument regarding point (2) in Chapter 5 is one of the key points at
which the logic of his theory depends on the prior specification that his
theory is a theory specifically and solely of the capitalist mode of
production. Gil has argued that this argument is fallacious because it
ignores the possibility of capitalists appropriating surplus-value from
other classes, i.e. from other modes of production. However, Marx's prior
specification of the subject of his theory ruled out by assumption the
possibility of appropriating surplus-value from non-capitalist modes of
production. His theory is concerned solely with surplus-value produced and
appropriated within the capitalist mode of production. Therefore, under
this specification, Marx's argument that "the capitalist class as a whole
cannot defraud itself" is valid. Individual divergences of prices from
values do not affect the total amount of surplus-value produced and appropriated
within capitalism and hence can be ignored in an analysis of this total
amount of surplus-value.
Finally, the provisional nature of this assumption that individual prices
are equal to their values is made clear in the final sentence of this
footnote:
If therefore he were at all interested in disinterested thinking, he would
formulate the problem of the formation of capital as follows:
How can we account for the origin of capital on the assumption that prices
are regulated by average price, i.e. ultimately by the value of
commodities? I say "ultimately" because average prices do not directly
coincide with the values of commodities, as Adam Smith, Ricardo, and
others believe.
Here Marx explicitly acknowledged that individual prices are in fact not
equal to their values. But the divergences of individual prices from their
values due to the equalization of profit rates, like the divergences
discussed in Chapter 5 due to cheating, etc., do not affect the total amount
of surplus-value and therefore can be ignored in the analysis of this total
amount of surplus-value. These divergences affect only the distribution of
this total amount of surplus-value across individual industries.
I wonder: does Mike agree with this key point of Gil's interpretation that
Marx's theory of surplus-value depends on the assumption that the prices of
individual commodities are equal to their values?
7. I argue instead that Marx's argument for the necessity of labor-power is
based on the conclusion derived in Chapter 5 that NO VALUE IN PRODUCED IN
EXCHANGE. On the basis of this conclusion, Marx explicitly ruled out in
Chapter 5 the possibility of explaining surplus-value solely by the buying
and selling of commodities (merchant capital) or by lending money
(interest-bearing capital). According to Marx's method of abstraction,
merchant profit and interest are parts of the total amount of surplus-value,
which can be explained (in Volume 3) only after this total amount has been
determined.
8. I wonder if this aspect of Marx's theory of abstraction - that merchant
profit or interest cannot be explained without the prior explanation of the
total amount of surplus-value, based on the exploitation of labor-power in
production - is an example of what Tony meant by "regressive" derivations?
9. After this abstraction from merchant capital and interest-bearing
capital, based on the conclusion that no value is produced in exchange, it
follows directly from the labor theory of value that, in order to explain
surplus-value, capitalists must be able to purchase a commodity whose
consumption, outside the sphere of circulation, results in additional labor
and thus in additional value produced. This special commodity can only be
labor-power. Hence, the necessity of labor-power follows from the labor
theory of value and the assumption that no value in produced in exchange.
10. Gil agrees with the conclusion that "the source of surplus-value must
be additional labor". But he argues that:
*Of course* the source of surplus value must be additional labor.
This is a consequence of Marx's definition of surplus value as
self-valorizing value (rather than redistribution of existing value),
not the labor theory of value.
And later:
The stipulation that surplus-value must be derived from additional labor
stems from Marx's definition of surplus-value, not from the labor theory
of value.
To borrow a little of Gil's bravado: surely this is wrong. Marx's
definition of surplus-value as self-valorizing value requires a prior
definition of value. Marx's prior definition of value, presented in Chapter
1, is abstract labor. Therefore, Marx's definition of surplus-value as
self-valorizing value depends on the prior definition of value as abstract
labor. That is why Chapter 1 comes before Chapter 4, etc. Marx's argument
is: if value is labor, then surplus-value can only arise from additional
labor. Does Gil suggest that Marx defined value as abstract labor in
Chapter 1 and then ignored this definition of value in his analysis of
surplus-value as self-valorizing value? That would be a strange procedure.
11. Gil has referred several times to the "obscure authorities" to which
Marx referred in Chapter 5 (Le Trosne, de la Meciere, etc.). These writers
were cited by Marx, not to support the provisional and inessential
assumption that individual prices are equal to their values (as Gil
suggests), but rather to support the fundamental and essential assumption
that no value is produced in exchange (as argued in #7 above). These
writers were Physiocrats, who were the first to argue that no value is
produced in exchange, as against the Mercantilists who argued that exchange
is the source of surplus-value. Therefore, although these writers are
obscure to us today, they were important predecessors of Marx's key point
that no value is produced in exchange.
12. I conclude from the above that Marx's derivation of the necessity of
labor-power to explain surplus-value in the capitalist mode of production is
straight-forward and logically valid. The necessity of labor-power in this
specific sense follows from the labor theory of value and the assumption
that no value is produced in exchange. It does not depend in any essential
way on the assumption that individual prices are equal to their values.
P.S. Unfortunately, this will be my last post for a week or so, because I
will be traveling in the Michoachan region of Mexico next week (Easter week
vacation week here) with my family (unfortunately for my participation in
this discussion, but happily for obvious personal reasons; perhaps not
unfortunately for those of you who have to read my posts).
I wish I had the time to comment on the current discussion concerning the
definition of capital in the denominator of the rate of profit, but that
will have to wait.
I look forward to rejoining the discussion when I return.
Cheers,
Fred