Monday, March 11, 2013

Robert Vienneau — Marxian Exploitation As Descriptive

Marx explains returns to capital by his theory of surplus value. For Marx, surplus value arises from the exploitation of workers. Capitalists hire labor power, and the use value of labor power is the ability for the workers to labor under the direction of the capitalists. Suppose the produced commodities (which include the means of production) and labor power are both sold at their (labor) value. Surplus value is the difference between the value added by the workers and the value of their labor power.
I think this account of exploitation is intended by Marx to be descriptive. It is not, for Marx, the basis of a normative judgement of capitalism. I havepreviously documented that many scholars and activists, over more than a century, have shared my view. In this post, I note two more references putting forth a view consistent with mine [Allen Wood and William J Baumol].
Thoughts on Economics
Marxian Exploitation As Descriptive
Robert Vienneau

12 comments:

Matt Franko said...

"Surplus value is the difference between the value added by the workers and the value of their labor power."

Wouldnt the 'value added by the workers' = (final sales price - (time worked * per unit time labor price))?

And the 'value of their labor power' = (time worked * per unit time labor price)?

Under an FFNC (nomisma) type system, such as today, ALL prices are a function of government "fiat", so since "price" is present here, it is in fact the government which is dictating the distribution of 'surplus value'... not 'capitalism'.

When Marx wrote of these things, we were under a metallic standard with no view of authority so this was not the case... iow government was a price "taker" back then as opposed to today where govt is price "maker"...

" I think this account of exploitation is intended by Marx to be descriptive. It is not, for Marx, the basis of a normative judgement of capitalism. "

I would also point out that Marx invented Capitalism so he probably thought it not appropriate to pass judgement on something which you yourself invented.

I interpret Robert V's larger point here as that Marx was simply illustrating what he was observing going on in the society in his day without going as far as to issue a personal judgement...

rsp,

Unknown said...

"Under an FFNC (nomisma) type system, such as today, ALL prices are a function of government "fiat".

I don't see how that can possibly be true.

Unknown said...

"Marx invented Capitalism"

Huh?

http://en.wikipedia.org/wiki/Capitalism#Etymology_and_early_usage

Matt Franko said...

http://adamsmithslostlegacy.blogspot.com/2007/02/origins-of-word-capitalism-thackeray.html

Seems like it is at least up for debate... Marx "wrote the book" in any regard....

rsp,

Matt Franko said...

y,

See the 13:00 mark at the video at this post:

http://mikenormaneconomics.blogspot.com/2011/11/infaltion.html

Under FFNC, govt either directly sets or ratifies all prices in the economy....

As Warren says (to paraphrase): 'prices are a function of what the govt pays for things or what the govt allows it's banks to lend against things..."

This is hard for libertarians to accept...

rsp,

Unknown said...

I think warren's wrong on that one. The govt can potentially control the general price level through different means, but that's a different thing.

"govt either directly sets or ratifies all prices in the economy."

the government only sets some prices, and people generally don't ask the govt to "ratify" their prices or price changes. So I think you're wrong there.

Tom Hickey said...

y, I have trouble understanding that, too.

Govt sets materials prices by the prices it pays to some degree, but final goods? Moreover, govt ordinarily vastly underbids everyone else most of the time due to its super-sized volume orders, at least to the degree that Congress allows (not pharma).

Matt Franko said...

y,

I see your point, it's not like the govt tells an ice cream stand when to raise prices...

but if there is a short term supply shock like identified in the video then the govt adjusts COLA's based on CPI to accommodate the temporary price increase or just pays the new price itself, then govt in the process "ratifies" the new price structure...

Let's say OPEC raises the oil price and the govt just pays the new price to fill the SPR by crediting bank accounts which results in higher deficit.... then the ice cream stand operator faces higher dairy prices due to pass thru and his costs per cone go up by 25 cents... the ice cream guy just raises his prices by 25 cents per cone if he wants to maintain the same unit profit.... so the price of an ice cream cone is a function of the price the govt agrees to pay for oil to OPEC, etc..

Govt can assist the citizens when this type of thing happens by making fiscal adjustments so in this case the non-govt can afford the new Ice cream cone prices and doesnt have to cut back on ice cream cones consumption and put an ice cream dipper out of work...

Here is Pavlina T on this from a paper at Warren's 'Mandatories':

Title: "Monopoly Money:
The State as a Price Setter"

Excerpt:

"1. The government needs real goods and services (g&s).
2. The government imposes taxes, in dollars, in order to create sellers who offer real
g&s in return for the needed dollars.
3. The government purchases the desired g&s.
4. The government is the monopoly issuer of its currency. Therefore, it has the ultimate
power to determine the price it pays for g&s; i.e. prices are exogenous."

rsp,

Tom Hickey said...

If this means that govt is the primary user of energy by volume and sets the price it pays by ratifying the market price, and the price of energy is determinative wrt the price level (which is reasonable to assume) then govt controls the price level either by its bid or the amount it buys.

Of course, it can also control price of energy, food, etc, through the use of buffer stocks.

Matt Franko said...

Right Tom,

I look at this as the mechanism that results in Price Stability in the JG wage...

iow via jg, govt would set the price floor for labor; if govt were to at one point raise the jg wage, prices in general would go up imo... as long as the govt were to hold the jg wage constant, it would act as an "anchor"...

ie "a denarius per day"... etc...

rsp,

Unknown said...

as I said the govt can potentially control the general price level through different means, but this is different to 'setting all prices'. Also, even if the govt keeps a lid on average consumer goods and services, there could still be a massive increase in asset prices going on at the same time.

"Let's say OPEC raises the oil price and the govt just pays the new price"

Does it have much of a choice? It can't exactly refuse to pay the higher price and still expect to get the oil, can it?

Oliver Davey said...

Let's say OPEC raises the oil price and the govt just pays the new price to fill the SPR by crediting bank accounts which results in higher deficit.... then the ice cream stand operator faces higher dairy prices due to pass thru and his costs per cone go up by 25 cents... the ice cream guy just raises his prices by 25 cents per cone if he wants to maintain the same unit profit.... so the price of an ice cream cone is a function of the price the govt agrees to pay for oil to OPEC, etc..

That's called a recipe for stagflation. Higher prices with no real growth.