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This is a response to Gil's recent posts. Gil, thanks for your helpful
posts. I think we are inching forward and maybe on the verge of making
significant progress.
1. I am glad that Gil agrees with Marx's argument in Chapter 5 - that
surplus-value cannot be created on the basis of exchange alone, either the
exchange of equivalents or the exchange of non-equivalents. The creation
of surplus-value is possible only with additional labor.
2. But Gil says that this point is obvious and "not worth an entire
chapter."
3. However, although that point may be obvious to Gil, it was not obvious
to many classical economists of Marx's day (including Malthus and
Torrens), who continued to present theories of "profit through exchange",
as I argued in my previous post. So it was certainly worthwhile for Marx
to devote at least a short chapter to critique these still-influential
theories.
Also, one of the big unresolved puzzles of classical economics had been
precisely how to reconcile the existence of profit in capitalism with the
exchange of equivalents (which many of them assumed, including Smith and
Ricardo). Some of them sensed that somehow the exchange between capital
and labor was not an exchange of equivalents, but they just accepted this
contradiction as an "exception". So, another of Marx's objectives in
Chapter 5 was to highlight this unresolved puzzle of classical economics -
as an introduction to Marx's solution to this puzzle by the distinction
between labor and labor-power.
Also, another of Marx's objectives in Chapter 5 was to explain how he
intended to explain merchant profit and interest. Since no value is
created in exchange, merchant profit and interest appear to be an
impossibility. Marx says that merchant profit and interest will be
explained later as parts of the total surplus-value produced by industrial
capital.
These were Marx's main concerns in Chapter 5, which, from his perspective,
were certainly worth a short chapter.
4. Gil main critique is that Marx's argument in Chapter 5 proves only
that SOME KIND OF LABOR is necessary for the production of surplus-value,
but it does not prove that this labor must be wage-labor within
capitalism. It could be the labor of independent producers in simple
commodity production, related to merchant capital or usury capital.
According to Gil, Marx failed to prove that capitalist production with
wage-labor is the necessary or superior from of the extraction of
surplus-value, compared to these other modes of production.
5. I argue, to the contrary, that Marx's theory is about capitalist
production (specifically and solely) from the very beginning in Chapter 1
(as the first sentence tells us). This was my entry point into this
latest round of discussion. We have discussed many passages in previous
posts that support this interpretation.
In addition, Marx states explicitly in Chapter 5 that his theory is about
"the primary form of capital, the form in which it determines the economic
organization of modern society" (p. 266); i.e. industrial or productive
capital.
Plus, as already noted, Marx also states in Chapter 5 that he will later
analyze merchant capital and interest-bearing capital as
"derivative" forms of this "primary" form of capital; in other words, he
will analyze merchant capital and interest-bearing capital as they
function in relation to capitalist production, and not in relation to
other non-capitalist modes of production.
Therefore, Marx's theory is about capitalist production from the very
beginning and Marx is not trying to derive capitalist production in
Chapter 5 as the necessary from of extraction of surplus-value. The
latter is Gil's question, not Marx's question. Paul Z. is correct - Gil
has changed the question.
6. Gil then says, OK, if you assume that Marx's theory assumes capitalist
production, then his argument on the first page of Chapter 6 about the
necessity of labor-power as a commodity is CIRCULAR. Since
labor-power as a commodity is "essentially synonymous with capitalist
production," then Fred's statement that Marx was trying to prove that
labor-power in capitalism is the only source of surplus-value in
capitalist production amounts to: Marx was trying to prove that capitalist
production is the only source of surplus-value in capitalist production.
7. But Gil's argument is fallacious. Capitalist production is NOT
SYNONYMOUS with labor-power as a commodity. Capitalist production
INCLUDES MANY OTHER FEATURES besides labor-power as a commodity (including
the marginal productivity of capital, the scarcity of capital, the
abstinence of capitalists, etc). Marx's theory (and Marx's theory
alone) concludes that the one feature of capitalist production, among all
these other features, that is responsible for surplus-value is the
purchase and utilization of labor-power. This conclusion follows from
Marx's assumption that labor is the source of all value (derived in
Chapter 1). In this way, Marx's conclusion that labor-power is the one
feature in capitalist production that produces surplus-value is NOT
CIRCULAR, but rather follows as a straightforward logical deduction from
his assumption of the labor theory of value:
IF LABOR IS THE ONLY SOURCE OF VALUE.
THEN LABOR IS THE ONLY SOURCE OF SURPLUS-VALUE.
Marx's argument would be circular if he were trying to answer Gil's
question - that capitalist production is the superior from of extraction
of surplus-value, compared to other modes of production. If Marx assumed
capitalist production and then tried to derive capitalist production, then
this would indeed be circular reasoning. But this is Gil's question, not
Marx's question. This is not Marx's reasoning. Marx's argument is not
circular with respect to his own question - to derive the specific source
of surplus-value in capitalist production from his labor theory of value.
8. Gil also says that this conclusion of Marx's - that labor-power is the
source of surplus-value in capitalist production - is "completely beside
the point" and "not the issue" in his critique of Marx's argument. Gil
accepts that labor-power is the source of surplus-value in capitalist
production, but argues that Marx failed to prove capitalist production is
the superior source of surplus-value, compared to other modes of
production.
But, Gil, maybe this conclusion is beside the point FOR YOU and your
critique, but it was not beside the point FOR MARX. It was THE POINT for
Marx. And the vast majority of economists - in Marx's day and ours -
would disagree with Marx's unique conclusion that labor-power is the sole
source of surplus-value in capitalism. This is a very big deal.
And Marx's innovation of the concept of labor-power enabled him to solve
the long-standing unresolved problem in classical economics - this is not
beside the point, but a significant accomplishment. This distinction
between labor and labor-power enabled Marx to explain that, although the
purchase of labor-power by capitalists on the market is an exchange of
equivalents, this exchange is not the end of the relationship between
capitalists and workers. The purchase of labor-power is followed by the
performance of labor by workers in production, which results in additional
value, and which therefore is the ultimate source of the capitalist's
surplus-value. What appears as an exchange of equivalents on the market
is now revealed to be exploitation in production. I think this is a
brilliant theoretical achievement, and one which still today captures the
essential truth about capitalist economies.
9. In general, Gil seems to belittle Marx's own concerns in Chapter 5 and
6 (that no surplus-value is created in circulation, the critique of
classical economics, that labor-power is the sole source of surplus-value
in capitalism, the distinction between labor and labor-power, etc.) as
"beside the point" and "not the issue". Then Gil attributes to Marx a
concern that was not Marx's own: to prove that capitalist production is
superior to other modes of production as a source of surplus-value. And
finally Gil criticizes Marx for failing to answer Gil's question! Again,
that I don't think this criticism is fair to Marx and his own concerns.
I look forward to further discussion.
Comradely,
Fred
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