When I said that surplus value is proportional to necessary labor, I meant that in the labor theory of value the ratio S/V is taken as constant. If your key equation is instead S= m.L - V then I don't see how you can maintain a constant rate of surplus value across industries. Therefore if this equation is made pivotal, I think you have a rather different theory to the one Marx set out. Steve At 12:23 AM 10/7/2000 -0400, you wrote: > > >On Fri, 6 Oct 2000, Steve Keen wrote: > >> Subject: [OPE-L:3976] Re: Surplus value or surplus argument? >> >> Thanks Fred, >> >> Yes it is proportionality in the strict sense of the word, but it is no >> longer Marx's theory in the strict sense of the word. > >Steve of course later retracted the agreement stated in the first part of >this sentence in a later post (a reply forthcoming). As for the assertion >in the second part of this sentence: this is Steve's opinion, of >course. I think this proportionality IS Marx's theory, as he presented it >in Capital, as discussed further below. > > > >> This is where I believe the divide arises between myself, Ajit, Gil et al >> on one broadly defined side of this debate (possibly including Allin & Paul >> on this issue), and yourself. Both sides are saying that Marx's theory as >> he wrote it can't be sustained, in that strict proportionality between >> surplus value and necessary labor can't be correct. > > >Steve, I am NOT saying that "Marx's theory as he wrote it cannot be >sustained". I am saying the opposite: that Marx's theory as he wrote CAN >be sustained. > >Secondly, I don't understand why you say that surplus-value value is >proportional to NECESSARY labor. Surplus-value is proportional to SURPLUS >labor. What do you mean by "necessary labor"? Is this a slip? > > > >> You are saying that so long as we bring in an unobservable modifier m, then >> we can make S proportional to V when this modifier is part of the equation. >> Well, mathematically, perhaps; but what does this do to the simple Marxian >> clarion call that all surplus arises from labor (with which I don't agree, >> of course, but it's a very large part of why people are initially attracted >> to Marx)? Surplus is an unobservable number times L, minus workers' wages? > >> >> Any potential recruits who heard that argument at a first meeting with >> the IS would wobble out of the meeting hall and go looking for a less >> confusing belief system. >> >> This of itself doesn't concern me too greatly, but it's a sign of the >> divide which exists between the simple message which recruits people to >> an initial interest in Marx, and the complex footwork needed to sustain >> a comparable message once you look very closely at the argument. > > >Steve, m is not just an "unobservable modifier", just a number, without >any theoretical content. Rather, m expresses quantitatively the basic >assumption of Marx's labor theory of value: that each hour of abstract >labor produces m amount of money-value (e.g. 0.5 shillings per hour). m >is not something unrelated to labor, but is instead the rate at which >labor produces money new-value. The labor theory of value cannot be a >theory of prices with L alone. m is also required. > >Next, the variable explained by Marx's theory is not "surplus", >but surplus-value, which is defined as dM and illustrated as 3 >shillings. Steve, what do you mean by "surplus"? > > >As for the clarion call, here is how I understand Marx's theory of >surplus-value (with Marx's numerical examples from Chapter 7): > >1. Workers are paid a certain daily money-wage (V), which Marx took as >given (e.g. 3 shillings). > >2. Workers are then put to work producing money new-value, at a given >rate per hour (e.g. 0.5 shllings per hour). > >3. Necessary-labor-time is the number of hours required for workers to >produce money new-value that is equal to the money-wage that they are paid >(e.g. NLT = V/m = 3 sh. / 0.5 sh. per hour = 6 hrs). > >4. Surplus-labor-time is the rest of the working day, i.e. the difference >between the total working-day and necessary-labor-time (e.g. SLT = 12 >hrs. - 6 hrs. = 6 hrs). > >In this surplus-labor-time portion of the working day, workers continue to >produce money new-value at the rate of 0.5 sh. per hr., but this >additional new-value no longer goes to replace (or "pay back") the >money-wage paid to workers. Rather, this additional new-value produced in >the surplus-labor-time becomes the surplus-value of capitalists (S = mLs = >3 sh.) > >Thus it is clear from this theory that surplus-value is produced by >workers in the surplus-labor time portion of their working day (and by all >workers, not just workers that produce "surplus goods"). This is not >"complex footwork", nor a "confusing belief system". This is simple and >straightfoward logic, easily understood. > > >As it happens, I presented this brief summary of Marx's theory of >surplus-value this week in a guest lecture for a politics course at Mount >Holyoke, and the students understood very well the theory and its >meaning. I would even say that many of them were pretty fired up at the >end, some because the theory made sense of their experiences as workers >and others in order to defend capitalists and the fairness of >capitalism. But both sides understood clearly that this theory is not >just dry mathematics. If this theory is true, then workers in capitalism >are exploited. > >In other words, the clarion call came through loud and clear. > >Steve, if you see m as just an "unobservable multiplier", without any >relation to labor, then you are missing the crucial theoretical content >that Marx gave m: the money-value produced per hour of labor, which in >the surplus-labor-time portion of the working day, becomes >the surplus-value of capitalists. > > >Comradely, >Fred > > > Dr. Steve Keen Senior Lecturer Economics & Finance University of Western Sydney Macarthur Building 11 Room 30, Goldsmith Avenue, Campbelltown PO Box 555 Campbelltown NSW 2560 Australia s.keen@uws.edu.au 61 2 4620-3016 Fax 61 2 4626-6683 Home 02 9558-8018 Mobile 0409 716 088 Home Page: http://bus.macarthur.uws.edu.au/steve-keen/
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