Gil, Despite the length of your response, you did not include the post number in which you discussed (as you claimed that you had) Marx's clear recognition of how merchant capitalists can profit (M'-M>0) even if the sum of values in circulation remains the same. My memory is that you have never in fact discussed this passage on this list or in your papers. I don't have my books here, but it's on the penultimate page of Ch 5 in the penguin edition, I believe. Marx claims that once we understand how by the industrial circuit of capital the sum of values does systematically increase, then he will be able to show how interest-bearing and merhant capital, though historically primary, now derive from the surplus value produced out of the circuit of industrial capital (you said you agreed with Korsch's principle of historical specificity; then please consult how he concludes that chapter in his Karl Marx--if I remember correctly, the quote from vol 2 is extremely important). (Note that even if interest derives from the surplus value produced out of the circuit of industrial capital, this does not mean that financial capital cannot politically and economically dominate industrial capital.) > But second, your "other" definition, to the effect that surplus value "is > simply a greater sum of value at t+1 in the *system as a whole* than at t", > isn't strong enough. Marx says so himself on the next-to-last page of Ch. > 5. Suppose a commodity owner buys some raw materials like leather at > period t [M--C], adds his or her own labor to them, and then sells the > result for a higher amount of money at t+1 [C'--M']. Here, as Marx says, > the positive difference between M' and M does not count as surplus value, > even though there is surely "a greater sum of value at t+1 in the system as > a whole", other things equal. This contradicts what you say below. You say Marx defines surplus value as M' minus M; now you say that this is not sufficient for surplus value. At any rate, there is a difference between newly produced value or an increase of the value in circulation and surplus value, strictly defined as M' minus M. It is obvious that merchant capitalists can procure surplus value in the second sense without by that activity increasing the value in circulation. And in the case of self exploitation, it is not by the circulation of commodities by mercants that dM is positive--so I don't get your point > This understanding of the definition supports Marx's Ch. 5 conclusion that > surplus value can't be based on a mere redistribution of existing values. > What it does *not* support is Marx's suggestion, echoed by you above, that > merchants' capital is incapable of extracting surplus value in the absence > of industrial capital. This claim has not been validly established in Ch. > 5, and Marx elsewhere affirms to the contrary for circuits of merchant > capital extended directly to value producers prior to the era of the > capitalist mode of production. More about the historical contingency of We have gone over this before. First, Marx considers merchant capital in this chapter soley in its circulation role, not as an element of the putting out system. And it is indeed true that in that specified role, merchant capital does not increase the value in circulation, though it can serve the function of increasing the use value of commodities to their respective owners. Second, Marx is not trying to establish in chapter 6 alone that only by means of free wage labor can surplus value be produced out of the industrial circuit of capital. He is arguing that if the industrial capitalist finds free propertyless workers-he assumes this fact theoretically as capitalists assume it practically-- he can produce surplus value because it is labor power, not labor time, that is alienated by workers, qua juridical subjects. The question is what is alienated by whom in the industrial circuit of capital. I have also noted that the "by whom" question is as important question as "the what" question. I have noted repeatedly that I have no argument that additional ground are needed to show why the production of surplus value depends on the generalisation of free wage labor, i.e., why it cannot depend on the basis of the putting out system or slavery. You make several points. On one additional point:, I think Marx is saying that price-value disparities are irrelevant, not accidental, to the explanation of surplus value. His explanation for why industrial capital can systematically increase the value in circulation does not depend on PVE. There is more to your message, but, I'll leave it here. It seems that you have another explanation for surplus value on the basis of the scarcity of capital, yet I am quite unclear about you are definining your terms. Yours, Rakesh
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