Paul Cockshott wrote: > I think Jim you have conceded the point. In order to establish the theory of > relative surplus value he assumes that prices are proportional to average > labour time. The whole analysis of the super profit of the innovator rests on > this, and the secondary general effect on the rate of surplus value by > reducing the price of wage goods depends on it as well.<
It's an assumption that prices are proportional to socially-necessary abstract labor-time (value), not "average labor-time." (Average labor-time isn't always realized as value; it isn't always socially necessary.) But no matter. In any event, I don't see the microeconomic price = value assumption as necessary to Marx's development of the theory of relative surplus-value. The theory could have been developed _without that assumption_ (just as Marx’s theory of exploitation can be stated without that assumption). It's easy to imagine assuming that the average industry price = the price of production instead. Under this alternative assumption, the innovator figures out a way to raise labor productivity, which allows him or her to reduce the individual price below the average industry price or get a larger profit margin (super-profits in price form).[*] The former means that competitors are compelled to follow, to introduce the new technique (as in Marx’s discussion). The latter creates a greater incentive for them to do so (having the same effect). Most likely, a combination of the two prevails. So in general, labor productivity rises and the price of production falls. The micro-level price = value assumption thus isn’t needed to develop the theory of rising labor productivity (falling value), though it does make total sense in terms of the progress of Marx’s exposition in CAPITAL. After all, he hadn’t introduced the concept of prices of production yet. (This presentation using prices of production instead of values fits with Marx’s view that capitalists do not make decisions based on values. (“The value of a commodity is, in itself, of no interest to the capitalist.”)[**] Capitalists work on the fetishized level of appearances, rather than using the holistic or dialectical approach that Marx applied. It’s only in volume III that his analysis approaches “step by step the form which they [the various forms of capital] assume on the surface of society, in the action of different capitals upon one another, in competition, and in the ordinary consciousness of the agents of production themselves.”) Even though rising labor productivity lowers the value of products (by definition), it does not follow that that this process automatically lowers the value of labor-power (even assuming that the “subsistence bundle” is constant). Marx _asserts_ that "there is immanent in capital an inclination and constant tendency, to heighten the productiveness of labor, in order to cheapen commodities, and by such cheapening to cheapen the laborer himself." But the last part doesn't follow automatically if labor productivity rises only in the luxury goods sector: that is, as Paul writes, > It would be possible for average labour productivity to rise and average prices to fall but it might be the case that the price of wage goods remained the same whilst luxury goods prices fell. < This is not a significant criticism of Marx, however, since there is no reason (with pure capitalism prevailing) to expect that rising labor productivity always hits some sectors (such as the luxury-good one) and not others (the wage-good sector). I read Marx’s analysis – which I stated above in terms of prices of production – as applying to _all_ capitalist sectors (if not throttled by monopoly or government rules), perhaps to different degrees during different eras. Since it is hitting all sectors, it would most likely hit the wage-goods sector. It’s hard to imagine otherwise. As far as I can tell, however, there is nothing explicit in Marx's chapter 12 of volume 1 that indicates that increases in labor productivity are never bottled up in the luxury-goods sector (and so never affect the value and price of wage goods). It may be reasonable to assume that this “bottling up” never happens, but Marx doesn’t make that assumption explicit. As Paul writes, > For Marx's argument to work the values and prices of commodities have to be strongly correlated.< In chapter 12 of volume I, Marx is assuming that values and (industry-wide average) prices are not just strongly correlated but _equal_ to each other at the micro level. Given that assumption, it follows that raising labor productivity lowers the value of labor-power. That assumption, as I’ve said, fits with the progress of Marx’s exposition (and expresses his commitment to start with the _whole_ of capitalism before considering the parts). But it's not necessary. And it’s not a very good assumption for day-to-day analyses of market behavior. Even though it makes sense at the macro-level, it doesn't make sense at the micro-level unless we're discussing the socially-average industry (which represents the whole). I don't care if that's a "concession" or not. My point is that the "labor theory of value" (better termed the "law of value") is a macro-level socioeconomic theory. It's not a theory of prices in the usual sense of the word, since values cannot be used to explain prices in any simple way. Price/value deviations at the micro-level are just as real as the macro-level connection between prices and values; they are not mere epiphenomena that can be ignored. Put another way, price/value deviations (arising from differences in the composition of capital, the degree of monopoly, land-rent, etc.) lead to deviations between the amount of value produced by an individual capitalist's production process and the amount of value that capitalist can claim, even though for society as a whole, total value = total price (roughly, GDP) and total surplus-value = total property income. I am not conceding that point, though I might do so if someone presented an argument against it. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. [*] At the micro-level, it doesn't make sense that labor productivity would get all of the capitalist's attention. After all, not are there also product innovations, but there are some sectors which are very "capital intensive," so that cutting the costs of the use of means of production attracts more attention from profit-seeking capitalists. It's only when we think of Marx's analysis as applying to the socially-average industry that it makes sense. For this sector, labor costs represent the lion's share of costs and labor productivity is the key number. [**] He continues: “What alone interests him, is the surplus-value that dwells in it, and is realizable by sale.” Strictly speaking, what interests capitalists are their individual profits, not surplus-value. But Marx is assuming here that price = value and profit = surplus-value on the micro-level. In the progress of his book, he hadn’t developed the theory of price/value deviations or profit/surplus-value deviations yet, so it would be premature to bring such matters in. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
