----- Original Message ----- From: "Jurriaan Bendien" <j.bendien@wolmail.nl> Sent: Saturday, January 26, 2002 3:23 PM Hi Jerry, Thanks for the reference. I haven't studied Sau and don't know anything about him so I cannot comment, and I haven't advanced very far at all with my study of foreign trade and the world market yet - I just didn't have the time in recent years. I would disagree though with Sau when he limits the concept of superprofits (surplus-profits or "extra-Mehrwert") to industrial capital. Surplus-profits can arise in any branch of capitalist activity, for instance through the (temporary) monopolisation of new technology or natural resources, or more generally any condition which creates a barrier to competitive pressures or gives a special edge in productivity. This, as Mandel indicated, is essential for understanding the trajectory and dynamics of capitalist development in the real world, since what drives the system forward (its dynamism) is precisely the search for higher-than-average profits, i.e. surplus profits (in Mandel's periodisation, freely competitive capitalism 1780-1885 is characterised by the realisation of surplus-profits mainly at the expense of economically backward (often agricultural) regions in a single country, classical imperialism 1885-1940 is characterised by the realisation of surplus-profits mainly at the expense of other, economically backward countries, and late capitalism (1940-) is characterised by the realisation of surplus-profits mainly on the basis of technological progress (technological rents) - whether that is correct is difficult for me to evaluate at this stage). What Sau means by the "law of value" is not quite clear to me from what you write. What I mean by it, simply put, is that the value of commodities is determined by the average socially necessary labour-time required to produce them. Therefore relative commodity prices (exchange-values) must reflect differences in production costs measured by labour-time, i.e. the valuation of labour-time is conserved in the circulation of commodities. This may be true more or less directly under conditions of simple commodity production, such as it occurs in the economic life of precapitalist societies, but as Marx shows, in capitalist society the operation of the law of value gets more complicated, containing many more mediations. It asserts itself through the competitive process among industries, where production prices and market values are formed, and profit rates are at least tendentially equalised - market-prices must systematically deviate from labour-values and so on. On the world market the operation of the law is modified again, among other things because more labour ends up exchanging against less labour, as is reflected in the "terms of trade". The ultimate basis of this is differentials in productivity (of labour and of the soil). It may be argued, as Mandel did, that internationally there is "no effective equalisation of the rate of profit", but this would appear to be only a temporary or historical circumstance, in function of imperialism - the long term trend would be for rates of profit and productivity differentials to even out between countries with the further development of world trade and international competition (maybe not so clearly in the case of agriculture, but certainly for industrial goods). To construct a theory of the capitalist world market is difficult not just because of the vast complexity of the subjectmatter (how can we say meaningful things about such a vast subject within the boundaries of our own limited experience) but also because the modalities of imperialism differ in space and over time (the way one country is imperialised or imperialises may be different to the way another country is). We have to deal not just with world trade but with monetary policy, protectionist measures etc. This is perhaps why many authors prefer to study a specific country or region and its insertion in the world market. Nevertheless, the Marxian law of value would seem to be a good theoretical starting point which is consistent with Marx's method of starting off with some simple pure abstractions and gradually incorporating more layers of analysis. In that case, we would I think be faced first of all with a critique of Ricardo's theory of comparative advantages, and a consideration of the phenomenon of unequal exchange. That is more or less where the currently Marxian scholarship is at, but like I say I never had the time to really delve into it systematically. All I can really do at present is refer to some authors who have, which I did. I think one of the problems with the Marxian scholarship on underdevelopment - insofar as it deals with a real object and not merely an object-in-thought, and leaving aside faulty theories of unequal exchange (through lack of a developed concept of the operation of the law of value, which leads to a focus on distributional conflicts) - is a very restricted view of "primitive (original) accumulation", confusing the original accumulation of money capital with the original accumulation of industrial capital. Primitive accumulation is something that occurs all the time, and under much more varied conditions than Marx describes with reference to Britain. In many parts of the so-called Third World there was and is plenty accumulation of money capital, yet it doesn't transform into industrial (productive) capital - this is what has to be explained. Regards Jurriaan
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