From: Philip Dunn (hyl0morph@YAHOO.CO.UK)
Date: Sun Oct 28 2007 - 08:14:34 EDT
Hi Juriaan, A worker puts in 100 hours of labour, gets paid a wage and spends it on goods containing only 50 hours of labour. Is that equal exchange, unequal exchange or neither? Phil On Sun, 2007-10-28 at 12:39 +0100, Jurriaan Bendien wrote: > Hi Philip, > > You are correct in a sense, and I agree Marx aims to explain the origin of > the surplus value initially on the basis that equal values trade for equal > values, i.e. M and C in the M-C transaction are equivalents and C' and M' in > the C'-M' transaction are equivalents. > > He aims to explain very clearly why owners of capital would be motivated to > invest directly in production at all, rather than simply trade in assets. > Purely from the point of view of the creation of net new value, he argues, > it does not matter a hoot whether commodities happen to be traded above or > below their value. > > In practice, however, it does matter very much, for Marx's further argument, > insofar as (1) beyond some limit, means of production and labour-power > bought above their value cannot result in capital accumulation, (2) if the > valorised capital is not realised, the owner of capital has lost capital, by > investing it in production rather than something else (3) owners of capital > aim to buy below value, ideally sell above value and realise an adequate or > maximum profit, under the constraint that all competitors have the same > objective, > > I was using unequal exchange in the more general, loose sense of "getting > something for nothing" in a trading relationship. If hypothetically I buy > e.g. a goose that can really lay gold eggs (okay, I don't believe that, but > for the sake of argument) for the average, normal price of any goose in the > market, I could of course argue that an exchange of equivalents has > occurred, the normal price for a goose, but in fact I've got myself a > bargain, since as soon as the goose has laid a gold egg, I have gained much > more than I paid for it. That gold egg is not subjective, it is a really > existing object which I can use in subsequent trading activities. Although > formally speaking the exchange may therefore seem equal, "in substance" it > is an unequal exchange. > > Most trade in capitalist society in reality involves unequal exchange to > some extent or other, but insofar as all competing market actors are > motivated to get their money's worth in a developed, open market, this > narrows or constrains the differential between exchange-values and > labour-values, such that labour-values regulate exchange-values, at least in > the long haul. At least that is how I understand Marx's theoretical > argument, abstractly speaking, assuming a MELT. If market actors discover > that their trading activity means, that they continually perform more labour > to obtain less product in return, they are motivated to change their trading > activity, or change their labour activity. As they adjust their trading and > labour activity, they effectively implement the rule of the law of value, > even although they may not be aware of it. > > To put the same thing differently: it is quite possible to trade commodities > representing more labour for commodities representing less labour, and > indeed commerce aims to do just that, but in the normal situation the > differential will not be so great nor enduring, since at a very great > differential, trading parties would simply refuse to trade, or be motivated > to seek an alternative source of supply. > > To use a simplified example, if product A takes 100 average labour-hours to > produce and product B takes 10 hours to produce, a normal trading ratio > between A and B would be (ceteris paribus) 1:10. If you can trade at 1:11 or > 1:12 then the owner of A has the advantage, if you can trade at 1:9 or 1:8 > then the owner of B has an advantage. If the trade was in terms of 1:5 or > 5:1 then there would obviously be a very great trading advantage. In > commerce, you aim precisely to realise that advantage, if you can, and as > much as you can. Hence "globalisation", meaning the maximum exploitation of > unequal exchange (more labour exchanging for less labour, i.e. the > exploitation of the differential). > > But what you also have to explain is, why the trading ratio is rarely if > ever 1:100 or 500:1 or something like that, i.e. the regularities of trade, > rather than their irregularities. > > This sparks among other things the notion of "equilibrium price", and the > theory of a system of equilibrium prices which ensure that all markets are > cleared. > > But this doesn't yet explain why the trading ratio consistently happens to > settle at "somewhere near" 1:10, rather than 1:100 or 500:1, at least in the > normal or "natural" situation (Smith and Ricardo indeed refer to "natural > prices"). Nor does it explain, why the normal trading ratio might shift > gradually in favour of A or B, in the course of time. > > All we can really say in equilibrium theory is, that at a ratio of (say) > around 1:10, supply and demand are observed to remain rather constant, and > therefore that this ratio must reflect equilibrium (we have no other > evidence for it). If it does not remain constant, but shifts gradually in > favour of A or B, then either there is no equilibrium yet, or, we have to > say something like that one state of equilibrium "is followed by another > state of equilibrium" after a market adjustment in which disequilibrium is > restored to equilibrium. > > Indeed, this is exactly what Fed chairman Alan Greenspan argues: > "Globalization has altered the economic frameworks of both developed and > developing nations in ways that are difficult to fully comprehend. > Nonetheless, the largely unregulated global markets do clear, and, with rare > exceptions, appear to move effortlessly from one state of equilibrium to > another. It is as though an international version of Adam Smith's "invisible > hand" is at work." (Bundesbank speech on January 13, 2004). > > Marx's theory aims to make Smith's "invisible hand" visible. Once we are no > longer blind, we comprehend that global markets are not largely unregulated, > that they do not always clear, that labour-effort is involved rather than > mystical "effortlessness", and that the "invisible hand" is the > flesh-and-blood hand of the worker producing the product. > > Jurriaan ___________________________________________________________ All New Yahoo! Mail – Tired of Vi@gr@! come-ons? Let our SpamGuard protect you. http://uk.docs.yahoo.com/nowyoucan.html
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