I've been waylaid by the final production details of 'Debunking Economics', and quite a few reply posts have accumulated during this time. I'll reply to each in turn, so my apologies if any reply omits reference to some development of that reply made in a later post! I agree with Duncan's opening paragraph--in fact, this provides a second explanation to the one I gave to Michael as to why labor-power and machinery are not strict commodities. The definition of the use-value of labor-power I agree with completely. Duncan's position on the use-value of the commodity inputs to production is one where we part company. The former expresses use-value as quantitative and measured in value units--precisely the proposition I have been putting. I have no argument with the statement that "The 'use-value' of labor-power to the capitalist is its ability to produce value (and hence surplus value)", except for perhaps the placing of inverted commas around use-value (discussed below under the # sign because it's a side issue to my main point). However the latter provides an indirect definition of the use-value of machinery as a quasi-qualitative force: "The 'use-value' of a machine to the capitalist is the reduction in labor costs the machine permits". This is of course a reading which is common amongst those Marxist scholars who do acknowledge the role of use-value in Marx's logic: my three criticisms are that (a) this is not how Marx himself used the term,(b) it provides two different classes of definition for the use-value of the inputs to production, when Marx emphasises that it is the aspects of a commodity which labor-power has *in common* with other commodities which explains surplus-value, and (c) it provides no explanation of why the contribution of machines to value output precisely equals their cost of production. (a) Check that section of Capital I after p. 188 (Progress Press; Section 7.2: The production of surplus-value) where Marx discusses the value contribution of machinery. You will see that (i) it is entirely in terms of the use-value and exchange-value of the machine (ii) Marx never makes the simple definitional step which is common in post-Marx scholarship on this point (iii) his discussion of the use-value of machinery is always in terms of the value *it* transfers, not any impact of machinery on the value transference capabilities of labor-power. (b) There is no doubt that, prior to the Grundrisse, Marx used a logic somewhat like this to explain surplus-value and why labor/-power was its only source. It was an explanation based on the unique characteristics of labor/-power, and in this case two different definitional approaches to labor-power and capital-machinery respectively were quite justified. However, when he developed his use-value/exchange-value logic, he switched from this (as Bohm Bawerk put it; see under ## below) "negative" methodology to a positive one. With this positive approach, the rules must be applied to every input to production, and therefore the same class of definition should also apply; Marx had no problem with this--"The seller of labour-power, like the seller of any other commodity, realises its exchange-value, and parts with its use-value"--but subsequent Marxists haven't really escaped from an acceptance of his earlier negative methodology to an appreciation of his positive methodology. (c) *IF* this was how one should define the use-value of a machine--"The 'use-value' of a machine to the capitalist is the reduction in labor costs the machine permits"--then why should we have *any* quantitative term for the value contribution of a machine to the value of the output? Why record c against it on both sides of the ledger? Why not record c on the input side, but some multiplicative factor times v on the other side? This way of approaching the use-value of machinery gives no justification for any quantitative value attribution to machinery in the value production process, and forces one to rely on some metaphysical argument about preserving the value it contains--something again which is common in marxist scholarship, but completely missing in Marx. Missing except, I argue, where Marx tries to make his two schemas--the old negative one and the new positive one--consistent in Capital. Thus he concludes his discussion of the use-value and value contribution of machinery with a phrase that I am sure all on this list know well: "The maximum loss of value that they can suffer in the process, is plainly limited by the amount of the original value with which they came into the process, or in other words, by the labour-time necessary for their production. Therefore, the means of production can never add more value to the product than they themselves possess independently of the process in which they assist. However useful a given kind of raw material, or a machine, or other means of production may be, though it may cost $150, or, say 500 days' labour, yet it cannot, under any circumstances, add to the value of the product more than $150. Its value is determined not by the labour-process, but by that out of which it has issued as a product. In the labour process it only serves as a mere use-value, a thing with useful properties, and could not, therefore, transfer any value to the product, unless it possessed such value previously." (Capital I p. 199) As I argued at length in my Journal of the History of Economic Thought 1993 papers, this is a bastardisation of the logic which Marx had previously applied to labor-power itself. There, the use-value was a crucial aspect of labor which explained surplus; here use-value is "mere". From my point of view, the reason for the bastardised treatment of his own logic was obvious: it was the only way to dismiss the possibility which had first occurred to him in the Grundrisse, and which threatened to unravel his familiar critique of capitalism: "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." (Grundrisse, p. 383.) The prospect Marx entertained there was that the exchange-value of machinery was c, but that its use-value was greater than c. As he put it, its devaluation (c) was different to its "increasing effect on production". This could perhaps be interpreted as Duncan has done in his post--except that in the numerical example which followed, Marx had one firm in which c was 10, and the value-creation attributed to machinery was 13 1/3. This of course contradicts the labor theory of value proposition that labor is the only source of surplus value. I believe that this is an accurate logical deduction from Marx's theory of the commodity--but of course it undercuts the key component of the LTV. This in itself is an achievement, not a failing; surely the last 130 years(!) of debate of the transformation problem should have indicated to all and sundry that there is an insoluble conundrum at the heart of the LTV. Marx could have been the one who liberated the classical/surplus approach from this conundrum. Instead, committed Marxists have been defined by being confined within this conundrum--so much so that I think it's become a "home away from home" which, though oppressive, is too familiar to leave. Leave it behind, and you find that Marx provides a sound philosophical basis for the surplus approach to analysing capitalism, the axiomatic foundation he provides enables a rich conception of many other issues besides, and we have a complete rival to the neoclassical school with none of its flaws. But unfortunately this requires the abandonment of many articles of faith: the tendency for the rate of profit to fall, the inevitability of socialism,... From my perspective, these articles of faith are more important to most Marxist scholars than is the underlying analysis. So this and many other non-faith approaches to Marx are dismissed, and the old tenets embraced. And, as Jerry put it in the post which obliquely began this thread, Marxists could still be discussing the transformation problem on the day the revolution actually does arrive. Cheers, Steve At 11:46 PM 3/21/01 +0100, you wrote: >I think it's helpful to understand that "labor-power" and "capital" as >commodities in Marx's discussion are really derived "meta-concepts". Basic >commodities are products of human labor exchanged as private property. >This gives rise to the fundamental categories of value, exchange value, >and money. > >Labor-power is a concept derived from the special circumstance of the the >exchange of the potential to produce value. Capital is a concept derived >from the possibility of M-C-M' production for surplus value once >labor-power is available for purchase. > >Thus when Marx starts talking about the "use-value" of labor-power or >capital (say, a machine, or money) he is using a concept defined at one >level of abstraction (in terms of ordinary produced commodities) somewhat >metaphorically at a higher level. The "use-value" of labor-power to the >capitalist is its ability to produce value (and hence surplus value). The >"use-value" of a machine to the capitalist is the reduction in labor costs >the machine permits. Note that this way of talking involves a subtle >switch in focus. We might expect the "use-value" of labor-power to be its >concrete abilities (to do carpentry, or computer programming), but that is >not how Marx's metaphorical development works. We might also expect the >"use-value" of the machine to have something to do with its actual >productive capacity (to shape metal, or to execute calculations) but >that's not how Marx uses "use-value" in context. (This last problem >bedevils neoclassical economists like Robert Gordon, who try to derive a >quantitative measure of "real capital" by using the methods employed to >try to measure "real consumption" of households. So they try to find >measures of the "qualitative improvement" of capital. (The new machine, >which costs the same as the old one, can shape twice as many pieces of >metal or execute twice as many instructions.) This is completely foreign >to the Marxian/Classical (and even /Sraffian) way of looking at capital, >and, as far as I can tell, just adds confusing noise to the macroeconomic >data. If, as Marx argues, the use-value of a machine to the capitalist is >the amount of wage cost it saves, changes in the concrete performance of >the machine are irrelevant. > >Duncan # It does emphasise Duncan's point that the 'commodities' in the M--C--M+ circuit (including labor-power) are quasi-commodities, which is fair enough; but when you look at Marx's discussion, he began by abstracting from this aspect and treating everything--including money--as a commodity. The non-commodity aspects of some entities was to be introduced at a later stage of his analysis--one he never got to in a systematic sense, but which there are inklings of in the manuscripts which became Vols II and III, and also of course the TSV volumes). ## "The second step in the argument is still worse: 'If the use-value of commodities be disregarded ... there remains in them *only one other property, that of being products of labor*'. Is it so?... Is not the property of being scarce in proportion to demand also common... Or that they are all the subjects of demand and supply? Or that they are appropriated? Or that they are natural products... Or is not the property that they cause expense to their producers <193> common to exchangeable goods? Why then, I ask again today, may not the principle of value reside in any one of these common properties a well as in the property of being products of labor? For in support of this latter proposition Marx has not adduced a shred of positive evidence. His sole argument is the negative one, that the value in use, from which we have happily abstracted, is not the principle of exchange value." (BB in Sweezy (ed.) p. 76.). Leaving aside the neoclassical/Austrian nominations for common properties, this is quite a strong critique of Marx's original negative methodology, which I believe most Marxists are still more familiar with, and wedded to, but no critique at all of Marx's final positive methodology--in fact it is a gross misunderstanding of it. I feel that most Marxists are more akin to BB here than Marx, in that they make a similar misinterpretation of how Marx used the concept of use-value.
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