[OPE-L] Karl Marx on unequal exchange in the "Grundrisse"

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Sun Feb 05 2006 - 09:36:37 EST

Jerry asked:

"Besides the "time factor and such things as credit money and capital
gains", what from your perspective can lead to an inequality between the
sum of s and the sum of profits in the world economy as a whole?"

I assume you mean generic gross profit income (interest, rent, profit, tax,
royalties and fees) from production? (as I have noted in the past, social
accounts of gross product will always understate real profit income,
since they include only those profits thought to be directly associated
with value-adding production).

S-P inequalities could result e.g. from:

- forms of structural unequal exchange
- "imperfect" competition of various kinds
- wasted labour or destroyed outputs
- accounting "tricks", forms of transfer pricing, and tax rules
- profits generated by the transfer of resources without production

So, the trend in aggregate prices can only approximately track the trend in
aggregate values produced. I think, like Marx and Engels, that the identity
of total surplus values produced and total profits from production is only a
modelling assumption, used to explore the dynamics of capital accumulation
under competitive conditions, where producing enterprises confront a price
structure for inputs and outputs which they do not control. The implication
of Marx's story is that the deviations between values produced and prices
realised are precisely a source of intercapitalist competition, part of what
drives that competition along. The very concept of the tendency towards the
equalisation (levelling out) of profit rates in competitive conditions
implies that, at any time, there are discrepancies between surplus-values
produced and realised profits, and there is no good reason for believing
that those discrepancies would in reality cancel out at the macro-level, nor
can that be proved; it is only a theoretical assumption.

In opposition to the Marxists, I do not believe that surplus-value contained
in products can be said to be "redistributed" among enterprises, I argue
only that more or less surplus-value is realised as generic profit by
different enterprises in exchange. Sure, Marx sometimes suggests a metaphor
that there exists a "pool" of surplus value from which different capitalist
claim their share. But in reality no "redistribution" occurs here, it is
only that more or less surplus-value is realised by different enterprises in
exchange. Redistribution ideas lead to the idea of value magnitudes being
"conserved" in price magnitudes. But this is I think an abuse of a concept.
What Marx means I think is that value is conserved between successive
exchanges (by human labour), and that changes in value relations will
regulate and set limits upon changes in price relations. Value relations
between products exist quite independently from their exchange, and do not
depend on exchange for their existence. Value relations exist objectively
between products, because products physically take definite quantities of
social labour-time to produce. All that the generalisation of exchange
accomplishes, is that the value of labour-time comes to be represented by
the value of its product, and that the value of its product comes to be
represented by a money-price.

Some theorists (e.g. Jim Devine) seem to argue for the two famous identities
as an "ontological" synchrony (cf. James Devine, The Utility of Value: the
'New Solution," Unequal Exchange, and Crisis" in RESEARCH IN POLITICAL
ECONOMY, 1990: 21-39). In that case, it is worth asking, what kind of
"identity" is the postulate of aggregate value-price identity anyway?
What does it MEAN to say that total prices and total values are "equal"?
Presumbly it would mean, that aggregate value produced, exchanges for
an aggregate price which reflects equal exchange, i.e. individual products
may not exchange at their value, but their aggregate does. But the reality
of this, is precisely what I contest; it is only a modelling assumption.
In the real world, unequal exchange occurs all the time; why that
unequal exchange would mysteriously cancel out exactly at the
macro-level is anyone's guess.

In this sense, the preoccupations with the Transformation Problem
are I think misguided, i.e. those preoccupations arise from a
theoretical framework of equilibrium economics, comparative
statics, and accounting aggregations, whereas Marx argues that
capital can be understood only in motion, i.e. as a process, and
his primary concern was with the dynamics of that process,
how it affects economic behaviour and drives it in a
particular direction. He then provides generalisations
about that process, about how production and exchange
are related.

The only substantive claim that Marx explicitly makes is that
total generic profit from production cannot be more than total
surplus value produced, although that total profit could be less
than total surplus value produced. This seems to be an idea
of "no more can be shared out than there is". But even this
idea could be challenged, since product values are "shared
out" not just among capitalists. Generic total profit can exceed
surplus value produced insofar as the whole capitalist class
can fleece the whole working class, i.e. unequal
exchange can occur between social classes.

ĦE pur se muove! - Galileo


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