From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Tue Jul 17 2007 - 16:39:57 EDT
Ajit's original point was that if we say that: X amount of commodity A exchanges (trades for, or is exchangeable) for Y amount of commodity B then this gives no grounds for saying that: X amount of commodity A = Y amount of commodity B I replied to this Ajit's proposition is false in one way, and true in another. It is false, insofar as the two commodity bundles are indeed practically "equated" in the trading ratio, which is the ground for asserting their equivalence in the first instance. You then have to explain what that equivalence consists in, and why it exists, and that is Marx's point. But Ajit's proposition is true, insofar as the insertion of an "=" sign can be meaningful and valid, only if we can specify IN WHAT SENSE the two commodity bundles are equal or equivalent. But to specify that sense of equivalence or equality, there are various logical possibilities, giving rise to different value theories: 1) The commodity bundles are in some way qualitatively equal to each other 2) The commodity bundles are in some way quantitatively equivalent to each other 3) The commodity bundles are in some way qualitatively equal AND in some way quantitatively equivalent 4) Their quantitative equivalence is expressed in terms of equal quantities of another (third or external) yardstick of measurement 5) Their qualitative equality is expressed in terms of some other (third) criterion in terms of which they are qualitatively the same 6) An external yardstick exists which expresses both their qualitative and quantitative equivalence at the same time Ajit's argument, I assume, is that: (a) because we can moot all kinds of answers here to the problem of the sense in which the commodity bundles are "equal", there is no logical proof possible at all that the equivalence or equality is constituted by labour-value and only labour-value (b) many of these 6 possibilities for specifying the equivalence or equality of the commodity bundles are anyway logically independent of each other, in that they don't necessary entail each other. (c) There could be all kinds of motivations on the part of the traders, which explain why the commodity bundles trade in this ratio, and not in another. The conclusion of all that is, that Marx's hypothesis of labour-value as the basis of equality or equivalence (abstract labour-time as the substance of value) in this trading relation cannot be LOGICALLY proved. At best you could prove that an explanation in terms of labour-value is coherent and non-arbitrary, and that it has a lot of explanatory power with regard to explaining what regulates the economic exchange of new reproducible labour-products. Ajit seems to imply that you don't need to theorise value at all, because all you need to know is that X amount of commodity A and Y commodity B have the same money-price, for whatever reason. In other words, what Marx marks out as a problem which traders confront, really isn't a problem. The term "commensuration" is possibly confusing, because commensurability can mean having '"the same magnitude", "having the same proportion" or "being measurable by a common standard" (the Latin root is "mensura" meaning measure). As regards unequal exchange, this could be explained in a simplified way as follows. Let's say for argument's sake that we have the following simple hypothetical trading equation: one tractor = 2000 kilos lamb meat (unboned) = US$50,000 = 2,000 labour hours This equation would express an equal exchange. Suppose however that the terms of trade change. The price of a tractor rises to $60,000 although it now costs only 1,500 labour hours to produce, while the price and the labour-cost of lamb meat stays constant. A tractor will now exchange for 2,400 kilos of lamb meat, but in addition 1 hour of tractor-making labour yields a total revenue of $40 while 1 hour of meat-producing labour yields a revenue of only $25, and effectively 1 hour of meat-producing labour exchanges for 0.75 hour of tractor-producing labour. You then need to produce 20% more lamb meat to buy one tractor, with 400 extra labour hours. This would be a substantive unequal exchange problem. It is not just that one price went up and another stayed the same, but that the trading position of one party improved, and worsened for another, with the effect that one trading party has to spend more time and money to obtain the same good, the other less. if we consider the equation: one tractor = 2400 kilos lamb meat = $60,000 we do have a statement of equivalence, but there is an unequal exchange involved insofar as 1,500 labour hours exchange against 2,400 labour hours, and in the sense that the revenues from trading the same goods across time have shifted in favour of one trading party and disadvantaging another. Unequal exchange can take extreme forms. For example, the Guardian recently reported that "workers who make its clothes in Bangladesh are being forced to work up to 80 hours a week for as little as 4 pence an hour" (This would imply a weekly wage of about 3.20 pounds in Bangladesh compared to a median 450 pounds or so for a 40 hour week in Britain. One British pound is about 140 Bangladeshi taka, and a loaf of bread in Bangladesh would cost about 12 taka, i.e. about 8.6 pence compared to close to one pound in Britain). Chossudovsky noted that when a dozen shirts were exported from a Bangladesh garment factory to the USA in 1992, the cost structure in US dollars was found to be as follows: Materials and accessories (imported) $27; Depreciation on equipment $3; Wages $5; Net industrial profit $3; Factory price (one dozen shirts) $38; Gross mark-up $228; Retail price (per dozen) in the West, before tax $266; Retail price including sales tax (10 percent) $292.60 (Source: Chossudovsky 2003, p. 83). Bangladeshi garment workers rioted in 2006. Unions rejected a minimum monthly wage of 1,604 taka and wanted at least 2,000 taka, while employers said even a 1,604 taka minimum wage would have a "devastating" impact on the garment industry by making it less competitive on world markets. There are about 4,200 garment factories in Bangladesh, employing 2 million workers and earning 3/4 of the country's income from exports. Marx alluded to unequal exchange in the following quote: "From the possibility that profit may be less than surplus value, hence that capital [may] exchange profitably without realizing itself in the strict sense, it follows that not only individual capitalists, but also nations may continually exchange with one another, may even continually repeat the exchange on an ever-expanding scale, without for that reason necessarily gaining in equal degrees. One of the nations may continually appropriate for itself a part of the surplus labour of the other, giving back nothing for it in the exchange, except that the measure here [is] not as in the exchange between capitalist and worker." http://www.marxists.org/archive/marx/works/1857/grundrisse/ch17.htm#p872 He leaves out however the possibility of major wage differentials, i.e. differentials in the normal rate of surplus value (or wages-profits ratio) and the value of labour-power (or modal real wages). Of course you can raise the wages of Bangladeshi workers, but is totally equal exchange ever possible? I don't think it is. But you can ensure all get access to the necessaries of life by means of extra-market interventions (subsidies, tax breaks, administered prices, price controls, licensing, renting and leasing etc.) or by providing people directly with what they need, without market mediation. Allocation of resources via the market is only one method of resource allocation. It can be justified if it is efficient and fair, but if it is not, there is no theoretical or practical reason to keep going with it, only the economic interest of social classes and nations. Capital can accumulate and be valorised only if markets expand, that is the main reason for marketisation. But if marketisation has the effect that masses of people can no longer meet their needs, it makes no economic sense anymore. Jurriaan
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