dear all,
I want here to compare, following Andrew's example of few posting
ago, the simultaneous approach (SA) with the Temporality approach (TA) or
whatever you may want to call them. My example just make wages explicit,
while in Andrew's argument they were implicit in the total capital advanced.
I do this simply for convenience, as I want to find out what are the insights
of the SA and TA in studying the effect of a reduction in working time,
a topic relatively "hot" in continental Europe. But of this more later.
With this I also try to reply to Riccardo who was asking for someone to
compare the implication of the SA viz the TA approach. This post is thus
divided: 1. formal comparison; 2. general implications; 3. illustration:
"policy" vs "political" implications.
1. Formal comparison
I start from one sector/ one good economy (say corn). The initial
conditions are of course given by the simple equation:
Cp + L = Qp
where C is corn input, L hours of labour, Q is corn output and p is
the price (value) of corn. At time t1 the following values applied:
C = 50 units, L = 50 hours, Q = 100 units.
This leads to p = 1 if calculated with simultaneous method. The same
value is assumed by TA. In the table below, are reported the values for
the total money wage W, the wage rate (wage per hour) w, the real wage
(wage in term of corn) WB, profit s, rate of profit r, and rate of surplus
value s'. All these but the real wage are measured in terms of money units.
At t= 1 all these values are the same for both the SA and TA approach.
Now, at t = 2 there is a fall in the labour required to produce corn,
so as now L = 30 hours. Following the SA, input prices = output prices
(Pt = Pt+1) = 0.6. To define the extent of profit and rate of profit we need
to make an assumption concerning wages. I make here three different
assumptions indicated in the table with a double "*", reported in row 2
and row 3 of the table (Note, there are two cases in SA and 3 in TA
because in the former the case of fixed wage rate and fixed real wage coincide).
In the second row, the assumption is that workers get the same total
amount of money wage than before. This of course means a rise in both
the wage rate and the real wage. All other values are reported. In row 3
I assume that it is the wage rate that stays the same. This assumption,
accompanied with the fall in price from t1 to t2, allows to keep constant
the real wage, the total amount of corn purchased with the reduced money wage.
In this condition, despite the fall in labour hours, the rate of profit is
the SAME AS BEFORE, a result pointed out by Andrew.
Next, I check these cases for the TA. In this case, input and output
prices differ. Output price in time t = 2 is 0.8. I then make the assumption
that total wage bill stays the same (row 4), that the total real wage stays
the same (row 5) and that the wage rate stays the same (row 6). All the
other results are reported in the table. (I make the further assumption
that wage-corn is priced at output prices. This does not affect the case for TA).
Now, you can see that in NO CASE in the TA approach, is the rate of
profit the same as before, following a reduction in labour expenditure. In
the SA approach, the case in which there is a fall in the rate of profit is
the one in which the wage rate increases, while at a fixed wage rate, the
rate of profit stays the same.
P1 P2 W w WB s r s '
t1 SA = TA
1 1 10 .2 10 40 .66 4
t2
SA1 0.6 0.6 **10 .33 16.6 20 .5 2
SA2 0.6 0.6 6 **.2 10 24 .66 4
TA1 1 0.8 **10 .33 12.5 20 .33 2
TA2 1 0.8 8 .266 **10 22 .37 2.7
TA3 1 0.8 6 **.2 7.5 24 .428 4
2. implications
The rate of profit in the SA therefore depends on wages, rather then labour
expenditure. Given the irrelevance of labour for the formation of the rate of
profit, it follows also that the for this approach (SA) any discussion of the
relation between the SOCIAL NATURE of this labour and the rate of profit
is also irrelevant. These two are presented as disconnected, different things,
belonging to different "discourses", one philosophical/political, if you want,
and the other economic.
In the TA, it is quite different. In principle it is possible to abstract from
this connection (for example, for the sake of analytical argument), but
ultimately we are forced to THINK about the relation between the two.
This relation is very simple. A falling rate of profit means that the rate
between the labour appropriated by the capitalists TODAY over the
labour pumped out YESTERDAY and embodied in anticipated capital falls.
Thus in the example before, the fall in the rate of profit is an expression
of the relative difficulty for capital to force people to work IN RELATION
TO past objectified labour. It goes without saying that the opposite is also true.
An increase in the rate of profit means that the rate between the labour
appropriated by the capitalist TODAY over the labour pumped up
YESTERDAY and embodied in anticipated capital increases. ****
The rate of profit is thus the measure of capitalist accumulation and this
measure directly depends on how much work is pumped out of labour
in relation to the past. ****
So why is this important? For at least three reasons. 1. TA theoretical
framework links the category which captures capitalists' everyday
experience of accumulation (the rate of profit) to the category that
captures workers' experience of accumulation, abstract labour. By
showing the link between these two, TA has acknowledged the reality
of both, although implicitly identifying the reality of both as belonging
to two different and opposed perspectives. Thus 2. Class relations are
put at the basis of the analysis and class struggle cannot be reduced
to the struggle over "the distribution of income." (No, evidently I don't
agree with Paul who argues that in the case of values we have the class struggle
and in the case of the prices of production we don't). Finally 3.
because of 1 and 2, TA help us to use Marx's framework in identifying
the class meanings of different strategies that are proposed in the real life
of political debates. To elaborate on this, I make the following
example.
3. Illustration: "policy" vs "political" implications.
My next question is: what are the political implications of the two
approaches. I don't want here to go into a general philosophical discussion,
but rather I am interested to "test" these two approaches in terms of a quite
practical issue, which has arisen especially in continental Europe: the question
of a reduction in working time to face the problem of unemployment. Let
the example above be our economy and ***suppose*** I am some sort of
labour bureaucrat of high rank, that is, one whose job is to try to mediate
between capital and labour (or fire-fighters, as rank and file workers used
to call them back in the 1970s), by coming up with a conciliatory
proposal, following which the capitalist are no worse off and the workers
possibly better off. I have two radical economists who work as my consultants,
one who follows the SA and the other the TA.
Given the former advice I can sit at the negotiating table with the representatives
of "capital in general" and try to convince them that there is a case for the
reduction of working time following technical change. After all,
L = N x h x i (N = number of people employed, h = length of working day
[week, year. etc], and i = intensity factor). Thus, for a given intensity of labour,
if at time t = 1, N = 5, h = 10 and i = 1, in principle it would be possible to have
a L = 30 either by making the same number of workers (N = 5) working
6 hours or cutting the number of workers to (N = 3) and making them
working the same time as before (h = 10). The data of the table above show
me that if "I", the union bureaucrat, is willing/able to make workers accept
the same wage rate than before, jobs can be "shared", together with wages,
without thus affecting the profit rate. The lower mass of profit can be dealt
with expansion of capital, assuming there is spare capacity (here of course the
state could have a role in the picture). The point is that the vision that my SA
consultant has helped me to shape, embeds the realm of class compromise,
of a way out, a way to reconcile the contradictions of capitalism within the
capitalist relations of production. The capitalists have the same rate of profit
than before, and the workers the same wage rate. After the increase in
productivity both loose in terms of the mass of wages and the mass of profit
(expressed in money), although these stay constant in terms of corn. In
case of a reduction in the working time, workers can "share" their
work and wages, and rely - together with the capitalists - on
**growth** to increase the real wage (for a given wage rate) to the
earlier level. . . and more.
Next comes my TA consultant. She points out the last three rows of
the table above, and argues that in these conditions, whatever is the relation
between N and h, the fall in labour following the increase in productivity must
lead to a fall in the rate of profit. Not only, but that assuming the same
wage rate, the people in employment will get a diminished total wage expressed
in corn. She then warns me that the reduced rate of profit will push the
capitalists to implement whatever strategy necessary to act as a
"counter-tendency". Not only an attempt to reduce the wage rate and, therefore,
further reduction of the wage basket in real term, but, more important, she
tells me they will try to increase the intensity of labour i. So I ask her:
"is there anything in your analysis that can tell me what we can do to solve
the problem of unemployment generated by the fall in L?" She answers me:
"it is very simple, but depends on who is "we". If by "we" you mean your
rank and file members, then you just keep the same workers as in t=1
(that is don't concede any increase in unemployment), and follow instructions
as in row 4 of the table, by giving them the same total money wage than
before (that is, increase the wage rate). However, "they" - the
representatives of capital in general - will not like it. This is the options
which corresponds to the lowest mass and rate of profit. But there is nothing
we can do about it. These are the rules of the game!! After all is just a matter
of relations of power." She insists then that even if we win this victory, the
war is not finished, after all the rate of profit has declined and the capitalists
will always try to increase i and reduce w. And since she does not even believe
in the Okisho theorem, she points out that the situation is even less appeased
by the introduction of continuous technical change, which will put more and
more pressure on the rate of profit and therefore on workers to increase
intensity and accept reduction of w. Her final word is thus that ultimately
there is no space for compromise. Only temporary moments to regroup
to gain strength in the next round of stuggles and get rid altogether of this
social system - and of the table that I have used to represent it.
Because we, as human beings, are incompatible with this system.
Because a system which "health" is measured by a high rate of profit
and, therefore, in human terms, a high ratio between alienated imposed
work of today in relation to imposed work of yesterday is sick! As it is sick
when this system is "ill", as measured by a "low" rate of profit, which simply
indicates that many of us are in the reserve army and those in employment are
to *expect* an increase in imposed alienated labour in relation to the past labour.
>From a HUMAN point of view, the choice between the two conditions
(high or low rate of profit) can only be a constrained choice. So let us just
focus on how to get rid of the constrain also by understanding capital's strategies.
To conclude the parable, from the SA follows some "policy
implications". The radicalism embedded within the model touches the surface
of the capitalist relation of production, the distribution of income, and having
lost the connection between substance of all bourgeoise wealth - imposed
alienated work - and the way the capitalists cognitivelly apprehend the endless
process of value creation (captured by the profit rate) it opens up a priori
for spaces of mediation. Any preoccupation for the transcendence of this
sytem may be brought in only by a reasoning external to it. On the contrary,
TA radicalism consists preciselly to help point out the
irriconcialiable contradicitons within the process of value creation.
The implied radicalism is total, mediation can only be a short-term,
contingent option, the aim is total war against this de-humanizing system.
As in Marx therefore, the question is not some "policy" implications,
but some political revolutionary implications.
Ciao
Massimo De Angelis