Julian writes > >Having looked at this again, I now see what Gil was getting at -- it's the >scarcity of capital *in the hands of the workers* which underpins >capitalism. This, I think, is something we can all agree on (he said >provocatively). [See John E.'s caveat] But capital *in the hands of capitalists* must also be scarce--that is, it's *logically* possible for excessive capital accumulation to drive the rate of surplus value to zero. [Of course Marx gives reasons in Ch. 25 why this wouldn't typically happen.] >I don't think I'd go along with Gil, tho', in describing this as "systemic >scarcity". I didn't. I described capital scarcity as the *systemic basis* of capitalist exploitation. >While it's true that the scarcity -- from the workers' point of >view -- is a product of the system, Gil's phrasing suggests (at least to me) >*all-round* scarcity. I think this echo of neo-classicism stunned me into overlooking the force of >the words I excised in my response. I don't know exactly what you mean by *all-round* scarcity, Julian, but let me anticipate. The only reason I'm using this more general wording is to avoid putting words in Marx's mouth. More specifically: capital scarcity is certainly a necessary condition for the existence of surplus value, and scarcity implies, other things equal, that a commodity's price and value diverge (cf. Ricardo's discussion on the 2nd page of the chapter "On Value" in his _Principles..._). These points are all I need for my Ch. 5 critique. It doesn't matter what the *basis* or *source* of capital scarcity is. One possibility is scarcity in the classical sense used by Smith and (more carefully by) Ricardo in discussing land rents: that is, the existence of positive demand for more capital than currently exists. Under this interpretation, surplus value corresponds to economic rent. This is my own sense of what Marx had in mind, but we can't know for sure. A second possibility, though, is scarcity in the neoclassical sense of opportunity cost (a sense anticipated by Smith), meaning that capital is scarce because capitalists incur subjective costs of "abstinence" and/or "risk aversion" in initiating a circuit of capital. I reiterate that I don't think this was what Marx had in mind, since he makes fun of "abstinence"-based theories of profit, but I can't rule it out, and the logical result still holds that exchange under scarcity in this sense also yields positive rates of profit or interest and generic price/value disparities for the scarce good. So: I'm emphatically *not* trying to interpret Marx in neoclassical terms. I'm trying to avoid the appearance of suggesting, illegitimately, that capitalist exploitation would not exist under neoclassical competitive conditions yielding only a "normal" rate of profit. Gil
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