[OPE-L:2083] Re: Gold (questions)

From: Gerald Levy (glevy@PRATT.EDU)
Date: Tue Jan 11 2000 - 08:02:02 EST

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Re John's [OPE-L:2082]:

> One captures absolute rent when the worst
> producer earns a rent. He manages to do so when the composition of
> his capital is less than the average.
> <snip> Note that all capitals in a given industry
> would earn absolute rent given that the worst producer earns an
> absolute rent.

In the case of gold, I don't think that a good case can be made for the
*worst producers* receiving rent. Historically (e.g. in the cases of
California in the 1840's and Alaska in the 1890's, [in partial answer to
Duncan]) this condition has not held. In the Californian and Alaskan "gold
rushes", there was "mining" (put in quotes, because in some cases it was
merely pan-handling) by many (thousands?) of producers whose mines were so
inefficient that they were not able to cover the living expenses of the
sole proprietor. Indeed, that was why many of the claims were ultimately
abandoned and even the land in most cases had no exchange-value at that
time. It's also why many of those thousands of gold producers lived in
greater poverty than if they were wage-earners.

Where are the worst producers of gold today? Tough question. There are
some "rugged individualists" who are attempting to mine gold in Bolivia,
the "outback" in Australia and even still in Alaska. Some of them never
find *any* gold, or just a few dollars worth of dust, yet labor on in the
hope that one day they will find the fabled "mother-load" or at least a
huge nugget. *Speculation*, rather than rent, seems to be the major
principle at work for the worst gold producers.
> It is worth noting that to get absolute rent Marx assumes that the
> natural monopolies have a lower composition of capital than the average.

If, on the other hand, one examined the ratio of investment in constant
capital to variable capital for the *major* gold producers (e.g. in South
Africa) then one might very well find that that ratio is higher than the
average in industry.

In solidarity, Jerry

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