[OPE-L:5451] On confusions due to consumption

Paul Cockshott (wpc@cs.strath.ac.uk)
Wed, 10 Sep 1997 06:56:42 -0700 (PDT)

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> Paul wrote:
>
> > According to M labour to be productive of value must be socially
necessary
> > in the sense of being performed under the best available technical
> > conditions.
>
> "The labor-time socially necessary is that required to produce an
> article under NORMAL conditions of production, and with the AVERAGE
> degree of skill and intensity prevalent at the time", Capital I, p.
> 39, Intl. (emphases added)
>
> So, labor productive of value IS NOT performed "under de *best*
> available technical conditions", as Paul says, but under the NORMAL,
> or AVERAGE conditions, which include "best", "average" and "worst"
> techniques.

Yes but the average in any real capitalist economy will be chosen
with respect to costs and profitability. A process such as that suggested
by Kliman could not be profitable and would not be chosen and could
not become the average.
>
> > In the example you gave there were two production processes
> > available
> > 1. Do nothing with the grain, leave it in store for a year.
> > 2. Plant it under conditions which would ensure a net negative product.
> > Clearly process 2 is dominated by process 1, and can not count
> > as the best available technical condition - thus not socially necessary
> > thus not productive of value but consumptive thereof.
>
> As far as I remember the example, "process 1." was not "available",
> as Paul says.
This is absurd, holding stocks is always an available process. Speculation
associated with the holding of stocks is an inherent part of commodity
producing economies.

>Corn was planted as usual, using some "normal
> technique" but some "bugs" -- I dont remember well-- destroyed part
> of the harvest. Capitalists have not a perfect knowdledge of their
> future when "drawing their function of production". The idea of a
> "production function" with perfect knowdledge of the future is simply
> an absurd.

It is because knowledge of the future is not perfect that one always
has speculative stock holding. If the agricultural process in question
is subject to catastrophic crop failures of the type described, there
will always be significant stock holding by speculators.
Under these circumstances what determines the value of the product
is the long term average productivity, taking good years on bad, and
taking the costs of storage for insurance purposes into account.

In that case the producers of the crop who experienced the crop failure
will experience significant financial losses having to purchase new seed
from the speculators to continue production at the previous scale. Their
losses
will be
1. the money laid out on wages
2. the money laid out to replenish seed from the speculators

Under these circumstances the labour was clearly unproductive, failing
to return the value of labour power, far less return a profit.
It belongs in the same category as the labour of personal servants that
that the estate owners might employ.

>
> It seems to me that the result of "negative values" because there
> is a negative net product is quite unconvincing. If some disease
> destroy the 950f the Scottish barley harvest (and barley net
> product is negative) what we will have is that the socially necessary
> labor time to produce one unit of barley will rise a lot. So, what
> we will see is that barley unit value is **increasing** and, in the
> market, barley (and probably whisky!!) price will also rise, even
> speculatively, that is more than the rise in its value.
>

Prices will rise for Barley in Scotland to take into account the
additional costs associated with importing the crop, along with the
rise in the world market price brought about by the world wide fall
in production relative to labour expended.

There is confusion as to the range over which the value function
is defined. As the net product falls towards zero the value tends
to infinity. Once the net product becomes negative, value becomes
undefined, since no process producing a negative net product will
be employed in a capitalist economy. Were the product to be produced,
it would have a negative value, but this just means that you would have
to pay firms to carry out production in that area. It is just conceivable
that such activities - like Keyne's joke about burying money in milk
bottles and employing miners to dig it out - might be subsidised to
provide work in times of high unemployment, but we should not delude
ourselves into thinking that workers employed on such loss making 'make
work'
schemes are exploited.