‘Surplus Theory’ versus Marxian Theory

[LBird]

Vin wrote:

LBird wrote:

The problem is 'facts' can't be voted upon, 

 lol ha ha ha haThe fact is facts can be voted on!! Ha ha ha lol Hilarious What about your factsIs it a fact that facts can be voted on? Who voted on this fact?he he 

It's a surprise to me, Vin, that you find "Workers' Democracy" a 'hilarious' prospect. That's just what the bourgeoisie say, in 'fact'.

[Anonymous]

LBird wrote:

Vin wrote:

LBird wrote:

The problem is 'facts' can't be voted upon, 

 lol ha ha ha haThe fact is facts can be voted on!! Ha ha ha lol Hilarious What about your factsIs it a fact that facts can be voted on? Who voted on this fact?he he 

It's a surprise to me, Vin, that you find "Workers' Democracy" a 'hilarious' prospect. That's just what the bourgeoisie say, in 'fact'.

Never mentioned workers democracy. Cut your crap and answer the question. Who voted on your assertions?     

[moderator1]

LBird wrote:

Moderator, how can the issue of Engels' materialism not be relevant to the materialist myth of a 'simple commodity mode of production'?Even Dave B, who disagrees with me, can see the relevance of it to a debate about 'simple commodity production'.In fact, it's the most relevant thing that's been said on this thread for (simply) ages!

3rd and final warning: 15. Queries or appeals relating to particular moderation decisions should be sent directly to the moderators by private message. Do not post such messages to the forum. You must continue to abide by the moderators’ decisions pending the outcome of your appeal.

[Dave B]

"The argument was about whether an exchange economy where "all" the producers were "independent owners of their means of production" ever existed historically." I would like to say that all do not think that there was ever an exchange economy, before capitalism, where all things that were bought or sold were produced by simple commodity production. EG. The surplus product/surplus value of, or produced by, the feudal peasants which was sold by the feudal lord as commodities for silk, diamonds and body amour or whatever was not simple commodity production. The fact that the feudal peasants may have also been doing a bit of simple commodity production on the side during Monday to Thursday is another matter. The idealised model re feudal peasants would be that they did simple commodity production between themselves. Eg Christina as I seem to remember made beer to sell to her fellow peasants although one can’t exclude the possibility that the Lord of the manor might have popped in for a pint as well. http://www.bbc.co.uk/programmes/b00b6ksc Slave labour and corvee labour when its object is ‘to obtain exchange-value’ or to produce commodities is not simple commodity production either. That can go one before, during and after the emerging domination of capitalism. Hence in antiquity over-work becomes horrible only when the object is to obtain exchange-value in its specific independent money-form; in the production of gold and silver. Compulsory working to death is here the recognised form of over-work. Only read Diodorus Siculus. [9]Still these are exceptions in antiquity. But as soon as people, whose production still moves within the lower forms of slave-labour, corvée-labour,& c., are drawn into the whirlpool of an international market dominated by the capitalistic mode of production, the sale of their products for export becoming their principal interest, the civilised horrors of over-work are grafted on the barbaric horrors of slavery, serfdom, &c. Hence the negro labour in the Southern States of the American Union preserved something of a patriarchal character, so long as production was chiefly directed to immediate local consumption. https://www.marxists.org/archive/marx/works/1867-c1/ch10.htm The point or question that Adam raises or asks or whatever. Before capitalism took root, what % of commodities that were part of the exchange commodity (which is a tautology) were produced by simple commodity production? I think people like Adam Smith in deriving his model, a little bit like Karl, ignored commodity production that wasn’t simple commodity production; like one might ignore the falcon feather and hammer thing. Although Karl covered his arse by recognising it occasionally. On some of the people I have been quoting etc I think they were sloppy and a bit cavalier; and I have my critique of what they seem to say and imply. I suspect that some people might worry that the sky is going to fall in over this; which it doesn’t. On the M-C-M Lets suppose as a given that the Law of Value is true or at least as a predicate or premise or maybe theory. And lets suppose that a bod ( a capitalist acting as a capitalist rather than a consumer wanting bling) turns up with some money worth 100 hours of labour time or M(100). (This is my novel notation) And buys a commodity with it (to repeat in this case not for his own personal consumption). Then if the law of value holds all he can do is buy a commodity, C, worth a 100 hours of labour time. So we have; M(100) – C(100) How can he then make a profit? Only by selling C(100) for M(120). Or C(100) – M(120). And M(100) – C(100) – M(120) Or in other word he starts with M(100) and ends up with M(120). That is a profit theory that even Einstiens ‘Barmaid’ could understand. Yes, yes; but you have just broke the precious the law of (the conservation of) value! And you are not allowed to do that. Something as appalling as breaking the law of the conservation of mass or energy; absolutely not I think, something must be wrong!* Or ditch the premise. 

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  But we really need to return to Devilles idealised model of buying something for 100 and selling it for 100  Or M(100) –C(100) –M(100).  Gets you, outside capitalism, nowhere and is a waste of time. But despite that capitalist reality hits you in the face and; M(100) –M(120) A mathematician and scientist would automatically want to focus on the middle of M(100) – C(100) – M(120)  Before questioning our hard earned premises. Just like scientists don’t believe that 100 Kg can transform itself into 120 Kg or 100 Kilo joules can transform themselves into 120 Kilo joules; without a bit of hanky panky that they haven’t fathomed yet. So what is peculiar about  the C(100) in capitalism, as that seems to be the origin of the M(100) –M(120) problem? Maybe there is some new type of ‘C(100)’ in capitalism that wasn’t present in simple commodity production from which we faithfully derived our precious law of value? What if it is just a matter of the way we prejudicially normally look at C(100)? From our analysis of simple commodity production C(100) would be useful stuff ,a use value, that you or others would like to wear, eat, and live in  or consume etc. What if there is a special use value and C(100) in capitalism that exchanges at its value? And dare I say it; labour power as a use value could ‘also’ be a C(100)? (The somewhat narrower idea of money being used to obtain a use value is no reflective break with the later part of the simple commodity production C-M -C model.) So the big question is could the C(100), the value of the labour power etc, as just a use value, transform itself in to C(120) which could be exchanged at its value for M(120)? What would that mean! We have had a volume 1, 2 and three quotes so far ( interesting volume 2 quotes a very difficult).  So maybe now for a volume four one.   It is Adam Smith’s great merit that it is just in the chapters of Book I (chapters VI, VII, VIII) where he passes from simple commodity exchange and its law of value to exchange between materialised and living labour, to exchange between capital and wage-labour, to the consideration of profit and rent in general—in short, to the origin of surplus-value—that he feels some flaw has emerged.  He senses that somehow—whatever the cause may be, and he does not grasp what it is—in the actual result the law is suspended: more labour is exchanged for less labour (from the labourer’s standpoint), less labour is exchanged for more labour (from the capitalist’s standpoint).  His merit is that he emphasises—and it obviously perplexes him—that with the accumulation of capital and the appearance of property in land—that is, when the conditions of labour assume an independent existence over against labour itself—something new occurs, apparently (and actually, in the result) the law of value changes into its opposite.  It is his theoretical strength that he feels and stresses this contradiction, just as it is his theoretical weakness that the contradiction shakes his confidence in the general law, even for simple commodity exchange; that he does not perceive how this contradiction arises, through labour-power itself becoming a commodity, and that in the case of this specific commodity its use-value—which therefore has nothing to do with its exchange-value—is precisely the energy which creates exchange-value.   Ricardo is ahead of Adam Smith in that these apparent contradictions—in their result real contradictions—do not confuse him.  But he is behind Adam Smith in that he does not even suspect that this presents a problem, and therefore the specific development which the law of value undergoes with the formation of capital does not for a moment puzzle him or even attract his attention.  We shall see later how what was a stroke of genius with Adam Smith becomes reactionary with Malthus as against Ricardo’s standpoint. https://www.marxists.org/archive/marx/works/1863/theories-surplus-value/ch03.htm   *(Actually you can if the people you deal with are well unaware that they are buying 100 hours of stuff for 120 eg you might get north American ‘Indians’ running around gathering beaver pelts for Brummie bling etc etc.- it is another subject and part of the theory of the accumulation of merchant capital.)

[ALB]

Dave B wrote:

"The argument was about whether an exchange economy where "all" the producers were "independent owners of their means of production" ever existed historically."I would like to say that all do not think that there was ever an exchange economy, before capitalism, where all things that were bought or sold were produced by simple commodity production.

We are agreed then. Argument over.Incidentally, nodern bourgeois academic economics does in effect teach that capitalism is essentially an economy where all the producers are independent commodity-sellers including wage-workers, who are selling their labour. just as others, independent producers, sell or used to sell their products. Of course, as Marx is pointing out in the passages you quote about Adam Smith and Ricardo, this means they can't explain profits properly as surplus value does not exist in the model of a simple commodity production economy. which is essentially what they are positing. Marx solved the problem by his key distinction between labour and labour-power, i.e what wage-workers are selling is not their labour (as independent commodity-producers do), but their labour power with surplus value and profit being the difference between the value of what they produce (their labour) and the value of what they are selling to their employer (their capacity to work, or labour power) which is less. Obviously they're not going to teach that in schools and universities.

[Anonymous]

LBird wrote:

Moderator, how can the issue of Engels' materialism not be relevant to the materialist myth of a 'simple commodity mode of production'?Even Dave B, who disagrees with me, can see the relevance of it to a debate about 'simple commodity production'.In fact, it's the most relevant thing that's been said on this thread for (simply) ages!

 I guess Rule 14 only applies to cde vin maratty. Has it ever been applied to anyone else? Would be interested to know  

[Young Master Smeet]

https://www.marxists.org/archive/marx/works/1894-c3/supp.htm#law

Satan wrote:

We all know that at the beginning of society, products are consumed by the producers themselves, and that these producers are spontaneously organized in more or less communistic communities; that the exchange of the surplus of these products with strangers, which ushers in the conversion of products into commodities, is of a later date; that it takes places at first only between individual communities of different tribes, but later also prevails within the community, and contributes considerably to the latter's dissolution into bigger or smaller family groups. But even after this dissolution, the exchanging family heads remain working peasants, […] so that the family, or family group, is in the main self-sufficient.The little that such a family had to obtain by barter or buy from outside, even up to the beginning of the 19th century in Germany, consisted principally of the objects of handicraft production — that is, such things the nature of whose manufacture was by no means unknown to the peasant, and which he did not produce himself only because he lacked the raw material or because the purchased article was much better or very much cheaper. Hence, the peasant of the Middle Ages knew fairly accurately the labor-time required for the manufacture of the articles obtained by him in barter. The smith and the cartwright of the village worked under his eyes; likewise, the tailor and shoemaker — who in my youth still paid their visits to our Rhine peasants, one after another, turning home-made materials into shoes and clothing. The peasants, as well as the people from whom they bought, were themselves workers; the exchanged articles were each one's own products. What had they expended in making these products? Labor and labor alone: to replace tools, to produce raw material, and to process it, they spent nothing but their own labor-power; how then could they exchange these products of theirs for those of other laboring producers otherwise than in the ratio of labor expended on them? Not only was the labor-time spent on these products the only suitable measure for the quantitative determination of the values to be exchanged: no other way was at all possible. Or is it believed that the peasant and the artisan were so stupid as to give up the product of 10 hours' labor of one person for that of a single hours' labor of another? No other exchange is possible in the whole period of peasant natural economy than that in which the exchanged quantities of commodities tend to be measured more and more according to the amounts of labor embodied in them. From the moment money penetrates into this mode of economy, the tendency towards adaptation to the law of value (in the Marxian formulation, nota bene!) grows more pronounced on the one hand, while on the other it is already interrupted by the interference of usurers' capital and fleecing by taxation; the periods for which prices, on average, approach to within a negligible margin of values, begin to grow longer.

[Young Master Smeet]

Ah, this is the line I was looking for:

Freddie wrote:

In a word: the Marxian law of value holds generally, as far as economic laws are valid at all, for the whole period of simple commodity production — that is, up to the time when the latter suffers a modification through the appearance of the capitalist form of production. Up to that time, prices gravitate towards the values fixed according to the Marxian law and oscillate around those values, so that the more fully simple commodity production develops, the more the average prices over long periods uninterrupted by external violent disturbances coincide with values within a negligible margin. Thus, the Marxian law of value has general economic validity for a period lasting from the beginning of exchange, which transforms products into commodities, down to the 15th century of the present era. But the exchange of commodities dates from a time before all written history — which in Egypt goes back to at least 2500 B.C., and perhaps 5000 B.C., and in Babylon to 4000 B.C., perhaps to 6000 B.C.; thus, the law of value has prevailed during a period of from five to seven thousand years.

[ALB]

These passages from Engels raise the point of what Marx and him meant by "the law of value". The term comes from Ricardo and states that commodities exchange with each other in accordance with the amount of labour required for their production from start to finish.Engels is clearly using it here in this sense. Volume III of Capital, which Engels edited and published in 1894 (ie after Marx's death), was a bit of a bombshell as in it Marx argued that under capitalism this was not the case and that, due to the averaging of the rate of profit, commodities exchanged at what he called their "price of production", i.e their cost of production + the average rate of profit. This would only accidentally be the same as a commodity's value (according to the law of value).Marx's critics accused him of being contradictory (some of Marx's supporters were confused too) and Engels is here, as also in the preface, explaining that there wasn't one and that the law of value did apply to pre-capitalist commodity production.Since Bolshevik times the "law of value" has come to mean something else: the economic law by which the market determines what is produced. Here's Ernest Mandel, a Trotskyist and so in the Bolshevik rather than the Marxist tradition:

Quote:

The ‘law of value’ is but Marx’s version of Adam Smith’s ‘invisible hand’. In a society dominated by private labour, private producers and private ownership of productive inputs, it is this ‘law of value’, an objective economic law operating behind the backs of all people, all ‘agents’ involved in production and consumption, which, in the final analysis, regulates the economy, determines what is produced and how it is produced (and therefore also what can be consumed). The ‘law of value’ regulates the exchange between commodities, according to the quantities of socially necessary abstract labour they embody (the quantity of such labour spent in their production). Through regulating the exchange between commodities, the ‘law of value’ also regulates, after some interval, the distribution of society’s labour potential and of society’s non-living productive resources between different branches of production. Again, the analogy with Smith’s ‘invisible hand’ is striking.

I don't think Marx himself ever used the term in this sense and Engels only used it in the Ricardian sense.The reason why Mandel wanted to change the definition was to justify the market still existing in his so-called "transitional society" between capitalism and socialism where the state would be trying to control and direct the market and even to second guess it, i.e by applying the "law" itself. This in fact is behind why Leninists (like our departed troll) want to defend "value" existing beyond capitalism.

[Dave B]

I think the problem or controversy is more fundamental than this. It revolves around what was chapter one analysing or more to the point where did Karl start his analysis from. Whilst the Engels supplement to volume III quote is important in the controversy the most important Engels quote appears elsewhere. Thus; This makes clear, of course, why in the beginning of his first book Marx proceeds from the simple production of commodities as the historical premise, ultimately to arrive from this basis to capital — why he proceeds from the simple commodity instead of a logically and historically secondary form — from an already capitalistically modified commodity. To be sure, Fireman positively fails to see this. https://www.marxists.org/archive/marx/works/1894-c3/pref.htm  What does that mean? Fred is I think saying that the opening chapter of volume capital and the ‘law of value’ that is entailed in it, is about or an analysis of simple commodity production and thus not capitalism. This is actually the root of the controversy; and all the other stuff flows from it. I agree with Fred’s analysis that that is what Karl did, and chapter one is NOT an analysis of capitalism. It is also my opinion  that Kautksy and Deville (in 1883), when they did their own synopsis of Capital, that they thought that chapter one was about simple commodity production. And that there was thus no Fred bombshell in 1894 for them.  In Fred’s; https://www.marxists.org/archive/marx/works/1894-c3/supp.htm I believe that because people think, correctly, that the exchange value of commodities ultimately and always depends on the amount of labour time embodied in them that there should always be a one to one ratio of the two. The one to one ratio IS the Law of Value, only and exclusively. But before we rush ahead into the transformation ‘problem’ etc etc and get our knickers in a twist re things not exchanging according to their value due to the organic composition of capital and equalisation of rate of profit and prices and costs of production blah blah. We need I think to attempt to understand what I think ‘Fred’ and Deville  is on about with their ‘simple production of commodities’,  ‘simple commodity’ and ‘simple circulation’ and etc. I think it is simple and is in fact demonstrated in much 19thcentury literature eg George Elliot. Silas Marner troddles of to a market with his Linen and sells it for gold. Whilst still in the market he exchanges the gold for a tailored coat which he intends to consume or which is ‘destined for his individual consumption’ and walks away from the market with it. How could you describe that in sort of algebraic like terms? Maybe ?; C(linen) – M(gold) – C(coat)  Which would be the famous C-M-C formulae that is integral part of chapter one to three. Or if the law of value holds C(100) – M(100) – C(100).  How does anyone get rich doing that kind of stuff? * Capitalism does it somehow with; M(100) – C(100) – M(150). Logically the law of value must seem to break down either with; M(100) – C(100) Or with; C(100) – M(150). Unless you have; C(100)- C(150). And thus; M(100) – C(100)….C(150)  – M(150). At least in that hypothetical notation both ends of the equation don’t break the law of value. And all we have deal with is the conundrum of ; C(100)….C(150) ? Or one commodity, C(100), transforming itself in some way or another into C(150)?  to be sold as M(150)? That would be a logical analysis based on the empirical observation of;  M(100) – C(100) – M(150).  Only If; you think that is a valid empirical observation and you insist on persisting and carrying over your ‘law of value’ predicate into capitalism. The deduced logical implications of; C(100)….C(150) As a kind of Fuerbachian scientific ‘object’ should be just for the moment be a subject of further investigation. Well bollocks to that! Did Karl as Fred says proceed from an analysis of simple commodity production, deduce from it a ‘law of value’ and ‘use it’ to analyse capitalism? I would say that theoretically the only commodity that formally exchanges at its value is labour power and everything else ‘drops out’ from that.   A problem with chapter one is that it is riddled with this thing called ‘private labour’. In fact it isn’t in dispute that it is about private labour; but what is private labour? Mandel is, I think, quite orthodox, like Kautsky, in interpreting it as simple commodity production. Although I think Mandel was an idiot.   Could a 100 hours of ‘SNLT’ in Brummie coloured glass exchange at its value for ‘SNLT’ beaver pelts?     

[Dave B]

Kautsky as below does his version of chapter one. Is he also proceeding from simple commodity production?  Karl Kautsky The Economic Doctrines of Karl Marx Part I.COMMODITIES, MONEY, CAPITAL Chapter I.COMMODITIES(1) The Character of Commodity Production  Let us take a potter and a cultivator, considering them first as members of an Indian communistic village community, and secondly as two commodity producers. In the first case, they both work in the same manner for the community; one hands over his pots, the other the fruits of his labour in the fields; one receives his share of the fruits of the field, the other his share of pots. In the second case, each carries on private work independently for himself, but each works (perhaps to the same extent as before) not only for himself, but also for others. Then they exchange their products, and it is probable that one receives the same quantity of cereals and the other as many pots as formerly. It seems that nothing has been altered in essentials, and yet the two processes are fundamentally different…………..  …………As soon, however, as various kinds of work were carried on by individuals independently of each other, as soon, therefore, as production became planless, the relations of producers to each other appeared as the relations of products. Henceforth the determination of the relations of producers to each other no longer rested with themselves; these relations developed independently of the wills of men; the social powers grew over their heads. To the simple intelligences of past centuries they seemed to be divine powers, and to later enlightened centuries they seemed to be the powers of Nature.  https://www.marxists.org/archive/kautsky/1903/economic/ch01.htm  Does it look like he is discussing a “primordial division of labour”?  Maybe he remembered the first version of chapter one?  Marx 1867 (Capital)The Commodity This is an English translation by Albert Dragstedt of the first chapter of the first German edition of Capital. Modern editions of Capitalhave a first chapter based on the second or subsequent editions.  Actually, all use-values are only commodities because they are products of private labours which are independent of one anotherprivate labours which, however, depend materially upon one another as particular members (even though rendered self-sufficient) of the primordial system of division of labour.In this fashion, they hang together socially precisely through their differentiation,their particular usefulness.That is exactly the reason why they produce qualitatively differing use-values. https://www.marxists.org/archive/marx/works/1867-c1/commodity.htm

[Dave B]

I can recommend chapters 4,5 and six of the following of Devilles 1883 das capital for dummies Actually all quite short and much easier to read than capital. https://www.marxists.org/archive/deville/1883/peoples-marx/index.htm 

[ALB]

Actually, not only was chapter 1 of Capital not an analysis of capitalism (and not meant to be), but even when, in the following chapters, Marx introduces capitalism as a system of commodity production based on wage labour he is still working with a model which he knows is not the same as actually existing capitalism. He openly recognised this in the following footnote in chapter 9 on "The Rate of Surplus Value":

Quote:

The calculations given in the text are intended merely as illustrations. We have in fact assumed that prices = values. We shall, however, see, in Book III., that even in the case of average prices the assumption cannot be made in this very simple manner.

So, Marx only gets to analysing capitalism as it really is by stages (simple commodity production, capitalist commodity production on the assumption that prices = values, capitalist commodity production with the averaging of the rate of profit).The footnote is here.I think that he had in fact already drafted Volume III before Volume I was published (in 1867).

[Dave B]

See what you have done now Adam, you have got me reading Stalinist text books on Marxist theory from 1954! The first half of the following was surprisingly good; I suspect people like Mandel were plagiarising this.  POLITICAL ECONOMY A Textbook issued by the Economics Institute of the Academyof Sciencesof the U.S.S.R Russian edition, 1954 English translation of second revised and enlarged Russian edition 1957 

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 The Birth of Capitalist Production in the Womb of the FeudalSystem. The Role of Merchant Capital In the feudal period commodity production gradually developed, town handicrafts expanded and peasant economy was more and more drawn into exchange. Production by small craftsmen and peasants, based on private property and personal labour creating products for exchange, is called simple commodity production.  Commodity Production-the Point of Departure for the Rise ofCapitalism and a General Feature of Capitalism  The capitalist mode of production, which arose as successor to the feudal mode of production, is based upon exploitation of the class of wage-workers by the class of capitalists. To understand the essence of the capitalist mode of production one must bear in mind, first and foremost, that the capitalist system has commodity production as its foundation: under capitalism everything takes the form of a commodity and the principle of buying and selling prevails everywhere. Commodity production is older, than capitalist production. It existed in slave-owning society and under feudalism. In the period when feudalism was breaking down, simple commodity production served as the basis for the rise of capitalist production. Simple commodity production presupposes, first, the social division of labour, under which individual producers specialise in making particular products, and, second, the existence of private property in the means of production and in the products of labour. The simple commodity production of craftsmen and peasants is distinguished from capitalist commodity production by the fact that it is based upon the personal labour of the commodity producer.  BRIEF CONCLUSIONS  (1) The point of departure for the rise of capitalism was the simple commodity production of craftsmen and peasants. Simple commodity production differs from capitalism in that it is based upon the individual labour of the commodity producer. At the same time it belongs fundamentally to the same type as capitalist production, in as much as its foundation is private ownership of the means of production. Under capitalism, when not only the products of labour, but labour power too becomes a commodity, commodity production acquires a dominant, universal character.(2) A commodity is a product which is made for exchange, Formation of the Average Rate of Profit, andTransformation of the Value of Commodities into theirPrice of Production  In contrast to what happens under simple commodity production, under capitalism commodities are sold not at prices which correspond to their value but at prices which correspond to their prices of production. The transformation of value into price of production is result of the historical development of capitalist production. Under conditions of simple commodity production the market price of commodities in general correspond to their values. CHAPTER XX In nearly all capitalist countries a considerable part of the population is composed of peasants, the bulk of whom carryon simple commodity production. In the colonial and semi-colonial countries………  https://www.marxists.org/subject/economy/authors/pe/ On ‘private labour’.  https://www.marxists.org/glossary/terms/p/r.htm

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