From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Sun Jan 27 2008 - 10:06:25 EST
Dave, In the transformation problem literature it is assumed that total profits must equal total surplus values. It is assumed that price-value deviations are cancelled out in aggregate. However, the problem of unproductive labour shows that this identity cannot hold, if unproductive labour costs are a deduction from surplus value, and consequently price-value deviations cannot cancel out in aggregate. Consequently it cannot be assumed that an output price aggregate resembles a value aggregate. If unproductive labour costs on some definition are around half, or more than half, of total labour income, it makes a very large difference whether we include them in total surplus value or total profit or not. For Marx at least, the general rate of profit is defined by S/C+V and not by P/C+V on some other definition of P which is different from S. For Marx, K does not equal simply the stock of productive fixed assets, since that leaves out the capital tied up during an accounting period in inventories, ancillary operating costs and labour costs. You can add or subtract all you like, when you like, but if your definitions are arbitrary, the result of your clever computations is arbitrary as well. All you achieve is that you make your results true by definition. Shaikh & Tonak's calculations are questionable, not just because of their arbitrary definition of productive and unproductive labour, but because they rely on Kuznets's valuation of gross output which Marx would have rejected. Incidentally, Kuznets himself realized there were big problems in drawing the boundary between intermediate expenditure and net output in a non-arbitrary way. One reason for that is that the same goods and services which can be produced in-house can also be purchased from another supplier whose final output it is. Fred Moseley claims: "The main goal of Marx's theory is to explain the total surplus-value produced in the capitalist economy as a whole; i.e. explain how surplus-value is produced and what determines its magnitude." http://netx.u-paris10.fr/actuelmarx/m4mose.htm But in fact Moseley and Shaikh are unable to define the magnitude of surplus value in an non-arbitrary way. They just define it by definition. Unproductive labour costs are just whimsically included or excluded from surplus value and profit according to whatever suits the argument - now you see it, now you don't. To prove the profit rate is falling, rising unproductive labour costs are excluded from profit; to prove that unproductive labour costs reduce profits, they are deducted from surplus value. Supervisory labour is simply defined as unproductive, because it is supervisory, which actually has nothing to do with Marx's own stated view. The axiom underlying the "deduction from surplus value" argument is that the total wages of all unproductive labour constitute an appropriation of surplus value produced in the same accounting period by the total productive workers, but what warrants that axiom is unexplained. It is only an accounting convention. But even in accounting, a convention is not adopted without a rational ground. Some Marxists will say "what's the fuss" but that is because they don't understand what is being asserted when an addition is simultaneously a deduction. Like the Mad Hatter, numbers mean what they want them to mean, so that 2+2=2 "at a certain level of abstraction" where +2 is really -2. When it suits, +2 =+2 and when it doesn't suit +2 =-2. It just depends on what you want it to mean. But that is arbitrary. Jurriaan
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