Hi, The distinction *is* significant, but it is not, in my opinion, the reason why labour creates surplus value. It is why Marx first believed that it did--and in at least having a reason, he was well ahead of Ricardo and Smith, who as he notes, could only say that there was a difference between labour embodied and labour commanded, but could not say why. Both Smith and Ricardo tended to believe also that the contribution machines made to production was identical to their cost--but again they couldn't say why. Smith was less consistent than Ricardo on this front--he frequently argued that machines returned much more than their cost of production--but again, he couldn't say why. However, when Marx developed the use-value/exchange-value analysis, he came up with a second reason as to why labour was the source of value, but this reason was in one sense diametrically opposed to his old reason: rather than focussing on what is unique about labour--the labour/labour-power distinction--he now focussed on what labour-power had *in common* with all other commodities--including machinery. In this sense, it would have been remarkable if this new logico-historical reason had reached the same result as his previous logico-historical reason, given that the former was a positive method, whereas the latter was a negative one. Marx convinced himself that they were consistent, but I believe that this was an instance of what he had previously said that Hegel had done--let an incomplete appreciation of his own principles lead him into error. The type of reasoning you undertake in your second paragraph is typical of the reasoning Marx used prior to 1857 to characterise why labour produced value and machines did not. It is also typical of the reasoning he used *after* 1857, with only one very important exception, and another important qualification. The exception occurred in the Grundrisse, where--soon after having developed the dialectic, and in the context of discussing technical change--he pondered that "its devaluation in the service of production is not proportional to its increasing effect on production." (p. 383) This indicates that the positive methodology was capable of reaching a different conclusion than its negative predecessor--that the general rule of incommensurability between use-value and exchange-value for all commodities led to the position that, when that primary use-value (the use-value to the purchaser, a capitalist in the M-C-M+ circuit) was quantitative, there would be a difference between use-value and exchange-value which would be a source of surplus-value to the capitalist. However, Marx retreated from this. I could find no subsequent time where Marx reached this conclusion--though I haven't read all his correspondence, so maybe it's sitting in there somewhere--but there is a readily available reference where you see Marx tortuously trying to avoid this conclusion, by reasoning so that, in the case of machinery, the use-value and exchange-value are identical--and this is the qualification. The reference is Capital, pp 193-199. The punchline to his proof, though he didn't explicitly put it in this form, was that the exchange-value of a machine was also its use-value. Check that section of Capital, and you'll see that Marx was trying to torture his positive methodology--in seven pages of dense reasoning--to make it reach the same conclusion as his negative methodology. In the end, all he managed to do was to completely obscure his positive methodology, so that it was effectively lost to Marxism. Since then, and until Rosdolsky's work (then Groll, then mine), Marxists were generally aware only of Marx's negative methodology--and there was a discussion on OPE recently where people concurred that Marx's proof of why labour alone produces value was a negative one. But why did it take him seven pages to prove that machinery didn't produce value, if the basis of the proof was simply that there is no distinction between commodity and commodity-power in the case of machinery, whereas there is in the case of labour? In my analysis, his positive methodology allowed him to do something no-one else had ever been able to do--to identify why all inputs to production can generate a surplus for the capitalist. Prior to Marx, the Physiocrats had argued that land was the only source of surplus--on the basis of a reductio-ab-initio argument that land preceded man, and therefore land alone was the source of value. The reason they believed this was that, in agriculture, it is obvious that the agricultural outputs are very much greater than the agricultural inputs--one bag of wheat in, 1,000 bags of wheat out. The physical surplus is apparent. Then we had Smith and Ricardo, pointing out a similar sort of physical difference: the labour it took to make something (labour embodied) was different to the labour something could purchase (labour commanded). Marx codified this into the distinction between labour and labour-power. Its basis, as with the Physiocrats, was the somewhat less observable phenomenon that the labour performed by workers exceeded the labour necessary to produce their means of production. But in all this, it wasn't possible for either group of economists to perceive the same possibility with respect to machinery and other commodity inputs to production. Some of these were completely used up in production--circulating capital--how could these add more value than they contained? Others, machines, took a long time to wear down, but the very heterogeneity of machinery means that there is no observable difference between their cost--depreciation--and their contribution to production. Marx's positive methodology provided a means by which this could be seen--the distinction between their exchange-value and their use-value. Hence Marx's statement in the Grundrisse, which in full was that "It also has to be postulated (which was not done above) that the use-value of the machine significantly (sic) greater than its value; i.e. that its devaluation in the service of production is not proportional to its increasing effect on production." This insight reveals that there is just as much reason to see machines as a source of surplus value as there is to see labour as the source--in other words, no input to production is specially blessed when it comes to value creation. Labour is of course different on a whole host of fronts--but these pertain to issues other than the creation of value and hence of potential profit for the capitalist. In the specific case of the distinction between the labour and labour-power, this was a basis to argue that, whereas commodities exchange-values equal their values, labour's exchange-value--the wage--should normally exceed its value. Hence Marx's description of the value of labour-power as the *minimum* wage. Now the use-value/exchange-value logic can also be used to argue that the exchange-value of machinery will sometimes exceed its value--but unlike labour, it also indicates that on occasion its exchange-value will fall well below its value. So it makes the analysis of prices much more complicated than Marx's previous negative methodology did; but it also eliminates the transformation problem--since surplus can be garnered from machines as much as from labour, the link between s and v is broken, and hence different organic compositions have no necessary impact on the rate of profit. By ignoring this positive methodology, and continuing with Marx's old negative reasoning, in my opinion Marxists have not simply thrown the baby out with the bathwater, they've kept the bathwater and thrown out the baby. So adherents to the labour theory of value are stuck with the same old dilemma that hobbled Marx, because they have not used the Master's deeper logic to transcend his own inadequate appreciation of it. That's why I think Marxists have done Marx such a disservice. Cheers, Steve At 03:01 PM 10/26/2000 +0100, you wrote: >Steve, > >What about my (Marx's?) argument that it is the distinctive nature >of the use value of labour power that is significant? > >Labour is universally and creatively transformative, unlike >machines. This means that the contribution of labour to production >is different to (bears no necessary relation to) the labour power >hired. They are two different things so can have two different values >so SV is possible. For machines, on the other hand, this >contribution is already 'contained' in the machine purchased. On >being 'realised' in production, the machine contributes something >particular, preordained and fixed - its contribution to production is >merely the realised form what was purchased to begin with. There >are not two different things in this latter case, and so the (present) >value of the sum of contributions of the machine is equal to the >price of the machine. No SV here. > >On a different point, any thoughts on my effort to interpret the >exchange value / use value incommensurability? > >Many thanks, > >Andy > > > >On 27 Oct 2000, at 0:31, Steve Keen wrote: > >> Hi Andy, >> >> I'm quite willing to accept that the adjective "pure" is too extreme. Marx >> of course allowed that the use-value of workers had a qualitative >> aspect--that it was work of a particular type, whether weaving, >> ironworking, etc.--as well as having a quantitative use-value to its >> capitalist purchaser. Of course the same subtlety applies to machines, >> which have a qualitative aspect as well--that a machine used to produce >> steel cannot be used to shear sheep, for instance--as well as having a >> quantitative use-value to its capitalist purchaser. >> >> My proposition is that the latter, quantitative use-value, is the reason >> why capitalists both hire labour and purchase machinery, and that on this >> logic, both are sources of surplus value. >> >> Cheers, >> Steve > > 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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