Re: [OPE] Marx 101

APOLOGIES FOR PREVIOUS MANGLED E-MAIL: COMPUTER MALFUNCTION
 
Jurriaan (06 October), citing Marx, suggests that Smith, in considering the causes of economic growth, 'failed to theorize clearly why the division of labour stimulated economic growth', adding - presumably by way of explanation - that 'Smith confused the technical division of work tasks between cooperatively organized producers, to make production more efficient, with the system of property rights defining the social division of labour (sic) between different property classes, where one class could claim the surplus product from the surplus labour of another class . . .' 
 
It is difficult to understand how Jurriaan can justify that verdict. Surely Smith was quite clear in his understanding of two things: (i) re the technological basis of economic growth - increasing degrees of division of labour enhanced (in the ways explained by Smith) the productivity of labour, meaning that, as division of labour increased over time with qualitative (and quantitative) improvements in the productive capability of the economy, the volume of output grew progressively; (b) re the institutional conditions which determined how, on the basis of relative bargaining strengths, that (growing) output was divided amongst competing claimants, with consequent implications as to how the available surplus was used.
 
Smith's thesis was that growth would occur according to the extent that surplus output was captured by capitalist employers, and to the extent that these capitalist employers applied their share of the surplus to the accumulation of capital (by increasing the number of productive workers and/or the resources with which such workers were supplied), rather than allowing it to be squandered in unproductive uses.
 
Jurriaan seems to be alleging that in analysing the process of growth Smith focuses on the technological role of division of labour without giving due emphasis to the social relationships which are crucial in determining the extent to which the available output is applied so as to promote economic growth. But it appears, does it not, that Smith presents an account which satisfactorily comprehends both the technological basis of increasing productivity and output and, as well, the social relationships, in terms of the economic strengths of the classes concerned, which determine 'who gets what' and, via the motivations of the recipients, the use to which the available surplus is put? It is hard to see how, as alleged, that Smith's account could have had 'the effect . . . that the real relationship between the production and distribution of wealth became a mystery'. 

--- On Wed, 7/10/09, ROY GRIEVE <roygrieve@btinternet.com> wrote:

From: ROY GRIEVE <roygrieve@btinternet.com>
Subject: Re: [OPE] Marx 101
To: "Outline on Political Economy mailing list" <ope@lists.csuchico.edu>
Date: Wednesday, 7 October, 2009, 12:05 AM

Jurriaan suggests that, in discussing the significance of division of labour for economic Smith confused 'the technical division of work tasks betwen cooperatively organized producers, to make production more efficient, with the system of property rights defining the social division of labour between different classes'.
 
It is difficult to understand how Jurriaan can justify that verdict. Surely Smith was perfectly clear that, on the  an increasing degree of division of labour enhanced the productivity of labour (by the familiar means identified, particularly by facilitating the introduction of machines and equipment which 'aid and abridge labour), thus permitting the volume of output (gross and surplus) to increase over time

--- On Tue, 6/10/09, Jurriaan Bendien <adsl675281@telfort.nl> wrote:

From: Jurriaan Bendien <adsl675281@telfort.nl>
Subject: [OPE] Marx 101
To: "Outline on Political Economy mailing list" <ope@lists.csuchico.edu>
Date: Tuesday, 6 October, 2009, 10:29 PM

I have added some text to my wiki on "surplus product" http://en.wikipedia.org/wiki/Surplus_product as follows:

"In Marx's own view, commercial trade powerfully stimulated the growth of a surplus product, not because the surplus is itself generated by trade, or because trade itself creates wealth (wealth has to be produced before it can be distributed or transferred through trade), but rather because the final purpose of such trade is capital accumulation, i.e. because the aim of commercial trade is to grow richer out of it, to accumulate wealth. This can ultimately only occur, if the total stock of assets available for distribution itself grows, as a result of more being produced than existed before.

Thus, because the accumulation of capital normally stimulates the growth of the productive forces, this has the effect that the size of the surplus product will normally grow also. The more the trading network then expands, the more complex and specialized the division of labour will become, and the more products people will produce which are surplus to their own requirements. Gradually, the old system of subsistence production is completely destroyed and replaced with commercial production, which means that people must then necessarily trade in order to meet their needs ("market civilization"). Their labour becomes social labour, i.e. labour which produces products for others - products which they don't consume themselves.

It is, of course, also possible to amass wealth simply by taking it off other people in some way, but once this appropriation has occurred, the source of additional wealth vanishes, and the original owners are no longer so motivated to produce surpluses, simply because they know their their products will be taken off them (they no longer reap the rewards of their own production, in which case the only way to extract more wealth from them is by forcing them to produce more).

In The Wealth of Nations Adam Smith had already recognized the central importance of the division of labour for economic growth, on the ground that it increased productivity ("industriousness"), but, Marx suggests, Smith failed to theorize clearly why the division of labour stimulated economic growth.

a.. From the fact that a division of labour existed between producers, no particular method of distributing different products among producers necessarily followed. In principle, given a division of labour, products could be distributed in all kinds of ways - market trade being only one way - and how it was done just depended on how claims to property happened to be organised and enforced using the available technologies. Economic growth wasn't a logically necessary effect of the division of labour, because it all depended on what was done with the new wealth being shared out by the producers, and how it was shared out. All kinds of distributive norms could be applied, with different effects on wealth creation.
a.. Smith confused the technical division of work tasks between co-operatively organized producers, to make production more efficient, with the system of property rights defining the social division of labour between different social classes, where one class could claim the surplus product from the surplus labour of another class because it owned or controlled the means of production (see further Ali Rattansi, Marx and the division of labour. Humanities Press, 1982). In other words, the essential point was that the social division of labour powerfully promoted the production of surpluses which could be alienated from the producers and appropriated, and those who had control over this division of labour in fact promoted specific ways of organizing production and trade precisely for this purpose - and not necessarily at all to make production "more efficient".
a.. Smith's theoretical omissions paved the way for the illusion that market trade itself generates economic growth, the effect of that being that the real relationship between the production and distribution of wealth became a mystery. According to Marx, this effect in economic theory was not accidental; it served an ideological justifying purpose, namely to reinforce the idea that only market expansion can be beneficial for economic growth. The logical corrolary of such an idea was that all production should ideally be organized as market-oriented production, so that all are motivated to produce more for the purpose of gaining wealth. The real aim behind the justification however was the private accumulation of capital by the owners of property, which depended on the social production of a surplus product by others who lacked sufficient assets to live on. In other words, the justification reflected that market expansion was the main legally sanctioned
 means in capitalist society by which more wealth produced by others could be appropriated, and that for this purpose any other form of producing and distributing products should be rejected. Economic development then became a question of how private property rights could be established everywhere, so that markets could expand. This view of the matter, according to Marx, explained why the concept of the social surplus product was removed from official economic theory - after all, this concept raised the difficult political and juridical question of what entitles some to appropriate the labour and products of others."

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Received on Tue Oct 6 20:09:56 2009