Do machines produce surplus value?

[robbo203]

twc wrote:

 .On the other hand, it is remotely possible that his Sraffian economy may treat pristine inputs in the same way as it treats all other inputs—as variable capital.Variable-capital inputs may continue to be productively consumed/used [even long] after they have reproduced their own maintenance cost.  Consequently, pristine raw materials (considered as variable capital) will always contribute toward profit since they take absolutely no time to reproduce their own [zero] maintenance.Again, you’d have to check if he treats them as such, i.e. as actual inputs, on equal par with machinery and possibly working animals.If he doesn’t you’d consider asking him why not, since these homeopathic inputs contribute miraculously to profit?

 As long as Keen treats machinery as variable capital, then whether or not he treats pristine raw materials as variable capital too, his theory will run into insurmountable conceptual problems.   This is why I mentioned pristine raw materials which are different from machinery inasmuch as the latter obviolusly has embodied labour content. Its a way of calling into question his treatment of machinery as varable capital

[twc]

Keen, of course, is wrong.Marx saw depreciation of the machine as piecemeal transfer of existing value from the machine to the product, and not as creation of value in the product.  Only living labour creates Marxian value in its product.On the other issue—pristine raw inputs—I haven’t found anything explicit in Debunking Economics.However, here’s Keen’s definitive statement on the source of profit in his conclusion to Chapter 17 (on Marx) “Nothing to Lose but their Minds”…

Steve Keen wrote:

Instead, mathematics and Marx’s philosophy confirm that surplus value —and hence profit—can be generated from any input to production.  There is no one source of surplus:  Adam Smith’s apparently vague musings that animals and machines both contribute to the creation of new value were correct….Marxist economics is analytically far stronger once it is shorn of the labor theory of value.

The answer to the Sraffian input–output economists who claim to have demonstrated mathematically and logically that Marx’s value theory is incoherent is to be found in Andrew Kliman “Reclaiming Marx’s Capital”.

[robbo203]

From Wikipedia Steve Keen[1] argues that "Essentially, Marx reached the result that the means of production cannot generate surplus value by confusing depreciation, or the loss of value by a machine, with value creation" . His argument is, that a machine can add a value to new output in excess of the value of economic depreciation charged[2] https://en.wikipedia.org/wiki/Constant_capital#Variable_capital

[robbo203]

robbo203 wrote:

From Wikipedia Steve Keen[1] argues that "Essentially, Marx reached the result that the means of production cannot generate surplus value by confusing depreciation, or the loss of value by a machine, with value creation" . His argument is, that a machine can add a value to new output in excess of the value of economic depreciation charged[2] https://en.wikipedia.org/wiki/Constant_capital#Variable_capital

It seems to me that the confusion is Keen’s, not Marx’s, in this case.  He (Keen) maintains that machines add value to a product in excess of the value of the economic depreciation incurred.  But if that were the case then why might not pristine raw materials do the same?    But here’s the rub; pristine raw materials, by definition, don’t have labour time embodied in them – even if machines do – and if you argue that they contribute value to a product, then you are not defining value any more in terms of socially necessary labour time. You are employing a different definition of value and are thus not dealing with the Marxian theory on its own terms.  Unless you deal with the Marxian theory on its own terms and follow its inner logic to its own ultimate conclusion, you cannot claim to have refuted the theory.

[Anonymous]

twc wrote:

Keen, of course, is wrong.Marx saw depreciation of the machine as piecemeal transfer of existing value from the machine to the product, and not as creation of value in the product.  Only living labour creates Marxian value in its product.On the other issue—pristine raw inputs—I haven’t found anything explicit in Debunking Economics.However, here’s Keen’s definitive statement on the source of profit in his conclusion to Chapter 17 (on Marx) “Nothing to Lose but their Minds”…

Steve Keen wrote:

Instead, mathematics and Marx’s philosophy confirm that surplus value —and hence profit—can be generated from any input to production.  There is no one source of surplus:  Adam Smith’s apparently vague musings that animals and machines both contribute to the creation of new value were correct….Marxist economics is analytically far stronger once it is shorn of the labor theory of value.

The answer to the Sraffian input–output economists who claim to have demonstrated mathematically and logically that Marx’s value theory is incoherent is to be found in Andrew Kliman “Reclaiming Marx’s Capital”.

 Marxism and Humanism. . Reclaiming Marx's Capitalhttps://books.google.com/books?id=Q-bbzWK8vi0C&pg=PR2&lpg=PR2&dq=reclaiming+marx+capital,+peter+hudis&source=bl&ots=aWpF5a_eFN&sig=x8SBfgxeEKqWOgwPGqVFH60KOmM&hl=en&sa=X&ved=0ahUKEwikrbCQ_pPSAhVD6WMKHYJ3DesQ6AEIIDAC#v=onepage&q=reclaiming%20marx%20capital%2C%20peter%20hudis&f=false

[Dave B]

There is a passage somewhere were Karl discusses Adam Smith recognising himself that there appeared to be a paradox as regards machines appearing to produce (surplus) value. It was paradox for Smith himself because he sensibly, albeit empirically rather than logically, realised himself that value could only be the expenditure of human labour. Keen is obviously confusing exchange value with value or probably doesn’t know the difference to start with. There is another passage from Karl warning about making slipshod equivalencies between surplus value and profit. On pristine wealth etc clearly more productive arable land or oil wells for that matter can make greater profits than ones that are less. Eg it costs $15 or something to get oil out of the ground in Iraq and Arabia whilst it allegedly costs about $60 in Venezuela or Russia. Although the capitalist costing that is available is a bit questionable as the cost of the interest on the fixed capital is included apparently. Transport costs and pipelines etc come into it of course ie moving a 40 gallons of oil from one place to another ain’t cheap. Karl did an excellent analysis on that kind of thing with differential ground rent; as did George Elliot. She was really savvy on economics I thought; I only found out later that she was moving in the same circles as Karl and Fred and must have been picking things up. Read Silas Marner first then do chapter one volume one; it worked for me. I know I transcribed it and all that but the Das capital for Dummies by Deville is good. Everybody else at the time thought so; including Lenin. Fred thought it was a bit too dumbed down but he was an intellectual wanker like Karl. Although I am not certain that the person who translated it into English fully understood it as he made a catastrophic mistake in one part. I had thought that Deville had done it until I went back to the French version that was available as image of the original book; and realised that that was OK, and changed it.   https://www.marxists.org/archive/deville/1883/peoples-marx/index.htm  I actually liked what Karl did. I started reading it thinking it was going to be a load of shit.

[twc]

Dave — Thanks for introducing us to Delville.  Never knew.  And from 1883!  Doubtless Aveling’s Students Marx is somewhat in its debt.***For the two topics currently under discussion in this thread, see Chapter 3 of Andrew Kliman’s Reclaiming Marx’s Capital.1.  Sraffian Simultaneist Reading of Marx’s CapitalKliman [Chapter 3] recounts the origin and history of the simultaneist/physicalist hijacking of Marx’s Capital.  It emanates from the Russian economist Dmitriev: Economic Essays on Value, Competition and Utility [1897].2.  Valueless Raw MaterialsKliman [Section 3.2] examines Dmitriev’s celebrated treatment of zero-value inputs, analogous to Robbo’s pristine raw materials.Dimitriev considers the case of machines [robots] producing machines, without human labour, and ‘proves’, to the complete and utter satisfaction of a celebrated lineage of [incautiously superior-to-Marx] mathematical economists, that value-less inputs generate profit!Herein lies the kernel of all subsequent charges of incoherence in Marxian value theory—such as Keen’s—because for Marx a zero-value input production process must always generate zero-value outputs.  It cannot, of itself, generate profit.It is instructive to follow carefully as Kliman analyses the entrails of Dimtriev’s argument, and by extension subsequent physicalist [anti-value] “improvements” by Bortkiewicz, Sweezy, Sraffia, Samuelson, Steedman, Okishio, et tutti frutti.  Keen, as commentator, languishes in the salad bowl.Oh-so simple, premature, solution of simultaneous equations unconsciously set a deceptively fatal trap for the whole tribe of them!And Kliman goes on to show that marginalism, which highly prides itself in its Walrasian mathematical simultaneity [helped out by that truly great mathematical physicist Poincaré], is likewise riven from its inception, through lineage and descent, by the fatal flaw of physicalism. Physicalism [anti-value theory] subverts rational comprehension of capitalist markets and reproduction. Marxian value is the indispensable theoretical category for comprehending them!***Kliman then points out that Dimitriev, when he comes to treat an economy based solely on animals, forgets his earlier physicalist ‘proof’ that zero values produce profit, and flips 180° to agree with Robbo.Dimitriev, in this instance, lets rational anti-physicalism get the better of him, and he flatly states “[there is] no foundation for any of the references to ‘natural’ processes’ [i.e. pristine raw materials] being independent sources of ‘profit on capital’”.  Hoist by his own petard.Oh well, Dimitriev, nothing if not inconsistent!

[robbo203]

twc wrote:

 It is instructive to watch carefully as Kliman analyses the entrails of Dimtriev’s argument, and by extension subsequent physicalist [anti-value] “improvements” by Bortkiewicz, Sweezy, Sraffia, Samuelson, Steedman, Okishio, et tutti frutti.  Keen, as commentator, sits off in the salad bowl. 

 I am not so sure you can include Sweezy in this list.  He may have given publicity to Bortkiewicz's argument but I have just been reading his contribution in the book "The Value Controversy" (1981, ed Ian Steedman,  NLB)  in which he very clearly endorses the labour theory of value He argues (p.26) that an analysis of reality cannot effectively be made in terms of prices since this precludes what for him is a key variable in the hstory of capitalism – the rate of surplus value/exploitation  He regards the rate of profit as a secondary variable by comparison.  And contrary to Steedman, he argues that there are "general ways" to surmount the transformation problem – that is to get from the value/surplus value  prong in Steedman's diagram to the price/profit prong.  In other words, prices are ultimately regulated by, and explicable in terms of, labour values It is possible that Sweezy might have had a change of heart since 1942 when he wrote "Theory of Capitalist Development" – I havent read that book so I dont know what his position was  then on the LTV.  But in this article he seems to endorse it

[twc]

Bortkiewicz's simultaneity forces Marx’s output prices to simultaneously equal Marx’s input prices, and so severs them from Marx’s input values and output values.Consequently Bortkiewicz forces dual-system accounting upon Marx—(1) one system accounting in values and (2) another system accounting in prices.Bortkiewicz recognised that Marx didn’t do this, and yet Sweezy accepts Bortkiewicz’s dual-system correction of Marx, thereby “improving” Marx against Marx, but in the name of Marx [Kliman p. 46].

[twc]

Firstly, I should have spelled his name correctly as “Dmitriev”.Secondly, it was Sweezy who ‘re-discovered’ for the West the (1) consciously anti-Marxian and (2) consciously simultaneist, Ladislaus von Bortkiewicz [1906–07].

Kliman, on p. 46, wrote:

In his famous 1942 work, The Theory of Capitalist Development, Sweezy went so far as to call Bortkiewicz’s model “the final vindication of the labor theory of value, the solid foundation of [Marx’s] theoretical structure”.

Sweezy's falling for [anti-value] simultaneous physicalism demonstrates just how deceptively insidious the simultaneous trap is. Sweezy was taken in by it, along with tutti frutti, despite his own loud contrary protestations and despite his genuine inner belief.That's precisely why Kliman is so important. And that’s precisely why your pristine raw materials example is so crucial to comprehending Marx's Capital, and as a challenge to all opposing theories of capital.

[robbo203]

twc wrote:

Bortkiewicz recognised that Marx didn’t do this, and yet Sweezy accepts Bortkiewicz’s dual-system correction of Marx, thereby “improving” Marx against Marx, but in the name of Marx [Kliman p. 46].

 And yet Sweezy seems to go along with the labour theory of value in the article I mentioned….Could it be that 1) Sweezy changed his mind (is Kliman referring here to the view expressed by Sweezy in 1942 which may be different to what he wrote in 1980?)  or 2) Sweezy is unaware of the basic contradiction involved in adhering to a Marxian labour theory of value and adopting a simultaneist physical approach a la Sraffa?

[Young Master Smeet]

Grundrisse wrote:

Fixed capital, in its character as means of production, whose most adequate form [is] machinery, produces value, i.e. increases the value of the product, in only two respects: (1) in so far as it has value; i.e. is itself the product of labour, a certain quantity of labour in objectified form; (2) in so far as it increases the relation of surplus labour to necessary labour, by enabling labour, through an increase of its productive power, to create a greater mass of the products required for the maintenance of living labour capacity in a shorter time. It is therefore a highly absurd bourgeois assertion that the worker shares with the capitalist, because the latter, with fixed capital (which is, as far as that goes, itself a product of labour, and of alien labour merely appropriated by capital) makes labour easier for him (rather, he robs it of all independence and attractive character, by means of the machine), or makes his labour shorter. Capital employs machinery, rather, only to the extent that it enables the worker to work a larger part of his time for capital, to relate to a larger part of his time as time which does not belong to him, to work longer for another. Through this process, the amount of labour necessary for the production of a given object is indeed reduced to a minimum, but only in order to realize a maximum of labour in the maximum number of such objects. The first aspect is important, because capital here – quite unintentionally – reduces human labour, expenditure of energy, to a minimum. This will redound to the benefit of emancipated labour, and is the condition of its emancipation. From what has been said, it is clear how absurd Lauderdale is when he wants to make fixed capital into an independent source of value, independent of labour time. It is such a source only in so far as it is itself objectified labour time, and in so far as it posits surplus labour time. The employment of machinery itself historically presupposes – see above, Ravenstone – superfluous hands. Machinery inserts itself to replace labour only where there is an overflow of labour powers. Only in the imagination of economists does it leap to the aid of the individual worker. It can be effective only with masses of workers, whose concentration relative to capital is one of its historic presuppositions, as we have seen. It enters not in order to replace labour power where this is lacking, but rather in order to reduce massively available labour power to its necessary measure. Machinery enters only where labour capacity is on hand in masses. (Return to this.)

Nice clear exposition of Marx' position. And

Grundrisse wrote:

Nature builds no machines, no locomotives, railways, electric telegraphs, self-acting mules etc. These are products of human industry; natural material transformed into organs of the human will over nature, or of human participation in nature. They are organs of the human brain, created by the human hand; the power of knowledge, objectified. The development of fixed capital indicates to what degree general social knowledge has become a direct force of production, and to what degree, hence, the conditions of the process of social life itself have come under the control of the general intellect and been transformed in accordance with it. To what degree the powers of social production have been produced, not only in the form of knowledge, but also as immediate organs of social practice, of the real life process.

 

[Young Master Smeet]

This one is worth a post in itself, I think, in terms of this debate, it's important:https://www.marxists.org/archive/marx/works/1857/grundrisse/ch14.htm

Grundrisse wrote:

Labour no longer appears so much to be included within the production process; rather, the human being comes to relate more as watchman and regulator to the production process itself. (What holds for machinery holds likewise for the combination of human activities and the development of human intercourse.) No longer does the worker insert a modified natural thing [Naturgegenstand] as middle link between the object [Objekt] and himself; rather, he inserts the process of nature, transformed into an industrial process, as a means between himself and inorganic nature, mastering it. He steps to the side of the production process instead of being its chief actor. In this transformation, it is neither the direct human labour he himself performs, nor the time during which he works, but rather the appropriation of his own general productive power, his understanding of nature and his mastery over it by virtue of his presence as a social body – it is, in a word, the development of the social individual which appears as the great foundation-stone of production and of wealth. The theft of alien labour time, on which the present wealth is based, appears a miserable foundation in face of this new one, created by large-scale industry itself. As soon as labour in the direct form has ceased to be the great well-spring of wealth, labour time ceases and must cease to be its measure, and hence exchange value [must cease to be the measure] of use value. The surplus labour of the mass has ceased to be the condition for the development of general wealth, just as the non-labour of the few, for the development of the general powers of the human head. With that, production based on exchange value breaks down, and the direct, material production process is stripped of the form of penury and antithesis.

[twc]

Robbo, unfortunately the latter.Sweezy had spent his considerable working life operating within the confines of his Bortkiewicz approach to Marx.  Of course, his Bortkiewicz approach was in later years becoming increasingly problemmatic following the anti-Marxian implications of Sraffa’s Production of Commodities by Means of Commodities.  Almost no mathematical Marxian economist could find a way out of the mounting and apparently insurmountable incoherences that beset Marxian value theory based on such an approach.The question was:  is the simultaneist approach wrong or Marx's value theory wrong.  And the vast majority slowly, but surely, sided with Marx is wrong.It was two years after the old man died that Andrew Kliman published his proof, in Reclaiming Marx’s Capital [2006], that simultaneanism is incompatible with the Marxian labour theory of value.In so doing, Kliman collaterally pinpointed Sweezy’s Bortkiewicz approach as a source of the apparently insurmountable incoherence in simultaneist Marxian value theory.Perhaps a thorough, but popular, explanatory seminar by Andrew Kliman on his Reclaiming Marx’s Capital is called for?

[twc]

YMS, yes zero value in gives [of itself] zero value out, superbly explained by Marx in your Grundrisse quotes above.They underpin Robbo’s pristine raw material case, and they make a clear and definite Marxian prediction.

[Author]

Posts