From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Sun Aug 26 2007 - 06:12:39 EDT
Okay sorry I won't use "Prof". It is possible for capital gains to involve or not involve surplus labour in some way, they can arise for all sort of reasons, I do not deny that at all. There is not one source only for capital gains. The general price level for a type of asset can rise or fall in accordance with the forces of supply and demand, and profits can be made from that. The depreciation of currency might explain some capital gains but not all. The problem at issue is whether all profit is exclusively due to surplus labour, and thinking economists say no, because profits can arise simply in buying and selling already existing assets. You might argue in some philosophical or historical sense that all profits are the result of past surplus labour, but that is another proposition. That proposition is not in fact true either, since e.g. if a bit of unimproved land is sold from one individual to another, not an atom of past or current surplus labour is involved. As I have said, you have to distinguish between current and past surplus labour. When we consider the so-called "bubble" phenomena, we can find many instances of profits which have nothing to do with the real economy at all. Karl Marx's theory concerned mainly the source and distribution of profits from value-adding production. Although profits can arise purely in circulation (exchange) this cannot explain aggregate profit. Marx then argues that interest, rent and profit income are appropriations of value-added (the word Mehrwert literally means added value). But Marx never argued that the circuit of capital is limited to buying inputs and selling outputs. His argument is that there are a series of interlinked circuits of capital, which can have a semi-autonomous existence. The analysis of these circuits shows not only how new value is produced, but also how value is transferred. In Karl Marx's theory, products and physical assets have value insofar they are the products of human labour. They have that value regardless of whether they are traded, and regardless of whether they are priced or not priced. Assets could also have a price without having a value, insofar as they are not product of labour. In any real economy, the majority of assets at any time are not being traded. Those assets have a value insofar as they are products of labour, but only a hypothetical (ideal) price. That value is normally strongly influenced by current replacement cost, and thus by the actual cost-structure of production, but it can also deviate from replacement cost. I've met plenty economists, who insofar as they can define what GDP is (many cannot) believe that GDP refers to total economic activity, or total national income. This is false, since GDP selects out only those transactions conceptually related to production for statistical purposes, and conceptually related to value-added. Thus, for a start, the financial flows derived from business accounts for social accounting purposes do not match the actual flows, they are a selection of those actual flows + imputations, made according to social accounting concepts. The Marxists and the Sraffians talked a lot about "inputs and outputs", but they rarely posed the question how these are in practice defined and valued. Yet this definition and valuation is ultimately derived from a particular view taken of purchases and sales. That is why the debates are often not very interesting, because they assume what has to be explained. They simply assume there are inputs and outputs while the definition of those inputs and outputs is itself dependent on a particular view of purchases and sales. Marx did not really talk about inputs and outputs, he talked about a capital value which is transformed into a larger capital value through production. The Analytical Marxist John Roemer challenged what he calls the "fundamental Marxian theorem" (after Michio Morishma) that the existence of surplus labour is the necessary and sufficient condition for profits. He proves that this theorem is logically false. However, Marx himself never argued that surplus labour was a sufficient condition for profits, only an ultimate necessary condition (Morishima himself aimed to prove that, starting from the existence of profit expressed in price terms, we can deduce the existence of surplus value as a logical consequence). Five reasons in Marx's economics were that: - profit in a capitalist operation was "ultimately" just a financial claim to products and labour services made by those who did not themselves produce those products and services, in virtue of their ownership of private property (capital assets). - profits could be made purely in trading processes, which themselves could be far removed in space and time from the co-operative labour which those profits ultimately presupposed. - surplus labour could be performed, without this leading to any profits at all, because e.g. the products of that labour failed to be sold. - profits could be made without any labour being involved, such as when a piece of unimproved land is sold for a profit. - profits could be made by a self-employed operator who did not perform surplus labour for somebody else, nor necessarily appropriated surplus labour from anywhere else. All that Marx really argued was that surplus labour was a necessary feature of the capitalist mode of production as a general social condition. If that surplus labour did not exist, other people could not appropriate that surplus labour or its product simply through their ownership of property. Jurriaan
This archive was generated by hypermail 2.1.5 : Fri Aug 31 2007 - 00:00:10 EDT