From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Thu Jun 15 2006 - 18:13:36 EDT
>Hi Rakesh > >>1. Does your accounting >>conflate juridical and real-productive categories: >>to quote more or less from the critique of Adolph Wagner, >> profit on capital is not a constitutive element, >>yet the value not constituted by the labour of the capitalist >>conceals a portion which he can appropriate legally > >I'm not exactly sure what you mean, but I look at it this way. Profit >on capital is not technically necessary to produce the net output. But >the presence of profit on capital is socially necessary in capitalism. Yes, Paul C's note about the double meaning of socially necessary proves to have been quite useful. >It is an empirical fact that it does occur. This results in a >different method of production compared to simple commodity >production. Under capitalist conditions it is not possible to >technically produce any output without also producing capitalist >consumption goods in the same period. By the way, Grossman agreed with you about the social necessity of the the consumption fund for the capitalist class (called "k" in the following analysis). This bit may prove helpful though it deals with the problem of expanded reproduction: For accumulation to occur, surplus value must be deployable in a threefold direction and must be divided into three corresponding fractions: i) additional constant capital (ac) ii) additional variable capital (av) or additional means of subsistence for workers iii) a consumption fund for the capitalists (k) Each of these three fractions is equally essential to the further expansion of production on a capitalist basis. If the available surplus value could cover only the first two, accumulation would be impossible. For the question necessarily arises - why do capitalists accumulate? To provide additional employment to workers? From the point of view of capitalists that would make no sense once they themselves get nothing out of employing more workers. From the point of view of the distribution of income, such a mode of production would end up losing its private capitalist character. Once the k portion of surplus value vanishes, surplus value in the specific sense of an income obtained without labour would have disappeared. The other two fractions of surplus value, the additional constant capital (ac) and the additional variable capital (av), retain their character of surplus value only so long as they are means for the production of the consumption fund of the capitalist class. Once this portion disappears, not an atom of unpaid labour falls to the share of the capitalists. For the entire variable capital falls to the share of the working class, once the means of production have been replaced out of it. Surplus value in the sense of unpaid labour, of surplus labour over and above the time required to produce essential means of subsistence, would have vanished. All means of consumption would now form necessary means of consumption. So it follows that the k portion is an essential characteristic condition of the accumulation of capital. The vacuous and scholastic manner in which Luxemburg argues is apparent now. Contemptuously she dismisses this element from her analysis: And yet, the growing consumption of the capitalists can certainly not be regarded as the ultimate purpose of accumulation; on the contrary, there is no accumulation in as much as this consumption takes place and increases; the personal consumption of the capitalists must be regarded as simple reproduction. (1968, p. 334) Luxemburg does not bother to explain how under simple reproduction the consumption of the capitalists can actually grow in the long run. Regarding the purpose of accumulation Marx tells us that the aim of the entire process 'does not by any means exclude increasing consumption on the part of the capitalist as his surplus value ... increases; on the contrary, it emphatically includes it' (1956, p. 70). But to Luxemburg accumulation only seems to make sense if the consumption of capitalist commodities is left to the non-capitalist countries. This belongs completely in the tradition of mercantilism: we find that certain exponents of the mercantile system ... deliver lengthy sermons to the effect that the individual capitalist should consume only as much as the labourer, that the nation of capitalists should leave the consumption of their own commodities, and the consumption process in general, to the other, less intelligent nations. (Marx, 1956, p. 60) Obviously Marx had anticipated the whole of Luxemburg's theory. We should not suppose, however, that the capitalist simply waits passively until the entire k portion has been swallowed up. Long before any such time (at latest from in the scheme when the k portion begins to decline absolutely) he will do his utmost to halt the tendency. In order to do this he must either cut the wages of the working class or cease to observe the conditions postulated for accumulation, that is, the condition that constant capital must expand by 10 per cent annually to absorb the annual increase in the working population at the given technological level. This would mean that from now on accumulation would proceed at a slower rate, say 9.5 or 8 per cent. The tempo of accumulation would have to be slowed down, and that, too, permanently and to an increasing degree. In that case accumulation would fail to keep step with the growth of the population. Fewer machines and so on would be required or installed, and this only means that the productive forces would be constrained from developing. It also follows that from this point in time on a growing reserve army would necessarily form. The slowing down of accumulation and the formation of the industrial reserve army must necessarily follow even if wages are assumed to be constant throughout this period. At any rate, it would not be the result of an increase in wages, as Bauer supposes. http://marxists.architexturez.net/archive/grossman/1929/breakdown/ch02.htm >The replacement costs, measured >in terms of labour-time, are therefore higher. Ok this is a very interesting argument. I am beginning to see what can be accomplished through an analysis of the ideal state of simple reproduction. >Sraffa's objectivism >doesn't extend to counting money-capital as a commodity that is a >socially necessary input to the production process, and therefore >misses the objective social relations that differentiate capitalism >from simple commodity production. It seems that just this error vitiates what Marx calls mercantilism, and I wonder whether any present school is a descendent thereof. Yours, Rakesh > >Best wishes, >-Ian.
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