Thanks, Jim. Responses . . . Monopoly does more than redistribute value. It reduces it in the short run (restricting output) as well. And the existence of monopoly rents is crucial in a number of other ways -- the ability to buy off workers, the increased capacity to invest, inflation of the incomes of "the 1%."
Regarding the measurement of 'c' (the depreciation component), there is the Cambridge critique. I don't blame Marx for not anticipating it, but it remains a basic conceptual flaw in the schema. In Heinrich, fictitious capital is the entire credit system. I always thought it was the component of paper assets not backed up by real productive capital. On Marx's focus on the non-financial economy, my understanding is that these imbalances are expressed in the credit system. So we're back to financial fragility. Clearly some workers score some surplus value, but what is there in the basic, abstract theory that implies persistent 's', over and above normal returns to capital? My answer would be power. Capital arrogates 's' to itself because it has the state and the guns. But I don't see that in Heinrich/Marx until you get beyond the basic value theory. On Thu, May 16, 2013 at 11:46 AM, Jim Devine <[email protected]> wrote: > Max Sawicky wrote: > > The account, due to Marx and not the guide, glosses over the salience of > > uncompetitive markets and monopoly industries. There is also some > > inconsistency between the premise that capitalists must invest to compete > > and the logic of a low- or zero-profit equilibrium that results from > stiff > > competition. > > In volume I of CAPITAL, as I understand it, Marx deliberately ignores > the role of monopoly and its effects on pricing and investment > decisions. In many ways, as David Harvey points out, he is criticizing > the ideal world that was presented (and worshiped) by the > _laissez-faire_ economists of his day (and today): in the competitive > Garden of Eden that they present, he sees a major snake (i.e., > surplus-value, exploitation). In this abstract world, prices equal > "prices of production" (long-term competitive equilibrium prices, > which in the real world are seen as "centers of gravity" for the > fluctuations of empirical competitive prices). At one point (in > chapter 5), Marx argues that all that monopoly does is redistribute > value, while his question concerns the creation of surplus-value on > the level of capitalist society as a whole. Questions about how an > individual capitalist can make more profit than average are left aside > for later. > > After chapter 3 of volume I, the emphasis is more and more on what we > macroeconomists call a "representative agent model": there's one > capitalist ("Moneybags") who represents the entire capitalist > class.[*] It's only in volume II that Marx starts to introduce > empirical differences among capitalists and the role of those > differences. In terms of the "labor theory of value," we see value = > price of production = price because he abstracts not only from > monopoly and other market imperfections, but also from empirical > differences of the organic composition of capital (which lead to > value/price of production deviations). In volume II and especially > volume III, the empirical differences among capitalists are > introduced, which imply price/value deviations (in volume III). > > One thing that's crucial is that the "labor theory of value" that Marx > presents in volume I of CAPITAL is _not_ a theory of prices (unlike > David Ricardo's similar-sounding theory). (A paper by John Milios that > agrees with this point was recently posted to pen-l. However, it won't > convince a skeptic.) Instead, Marx assumes a "representative agent" > runs the economy (so that value = price) in order to get a picture of > how capitalist production and accumulation work for society as a > whole. It's only in volume III that Marx deals with such issues as > supply and demand. > > > As a bean-counter, I found myself wondering how anyone would measure any > of > > this stuff (s, c, v, etc.). Especially c. That doesn't mean it's useless, > > just limited in some ways. > > In volume I of CAPITAL, Marx presents something that's very close to > modern national income and product accounts. Constant capital (c) > should be seen as a flow of money to pay for raw materials > (circulating capital) and the depreciation of fixed capital. Given > volume I's assumption, this flow of money is stated in value terms. > > > The crisis discussion is murky. (Again, maybe the fault of Marx, if not > > Heinrich.) > > Marx never finished his crisis theory. So we see competing schools > instead. (I've presented a synthesis, but who am I to talk? Anyway, > I've never believed that I was presenting "what Marx (really) said" > about crisis.) > > > The decisive channel for crises, especially now, is the credit > > system -- so-called fictitious capital. We might excuse Marx for not > being > > around to witness the failure of finance in all its glory. I am not > > suggesting evil finance is separate from virtuous production -- I got off > > that wagon a while back. Minsky's account of financial breakdown, which I > > read as genuinely intrinsic to credit markets, is much more clear and > > compelling to me. > > I wish Marx hadn't used the phrase "fictitious capital." It's simply > the present discounted value of expected future earnings. In practice > (after the fact), it turns out that some of that fictitious capital > isn't fictitious, since it corresponds to real earnings (real > extraction of surplus-value). Other fictitious capital turns out to be > truly fictitious. > > Minsky's account is good. But we have to remember that Marx (and > Engels) saw two different kinds of financial crises. Some of them are > due to the autonomous workings of the financial system while others > are reflections of the dynamics of the non-financial sector (falling > profit rates in production). Minsky's emphasis is on the former, > while Marx's is on the latter. One way to put it is that Minsky > analyzed "financial fragility," while Marx's emphasis is on the > fragility of the non-financial economy (his unfinished crisis theory). > > > Naive question: if market competition is so fierce, why can't workers > > capture surplus value? I can think of all kinds of reasons why they > don't, > > but none that are intrinsic to the basic value relation. > > I think that some workers do gain a piece of the surplus-value pie. > These are the small number of professional athletes and entertainers > (think Oprah) whose unique skills allow them to earn scarcity rents. > Just as land-owners get a piece of the pie because they control a > naturally-scarce resource, these folks control a resource which allows > them to earn incomes much higher than the costs of its production. > > > On the whole, the book gave me some motivation to try (again) to crack > > Capital. > > It's a hard book to crack. Even though chapters 1 through 3 are > extremely important, it may be best to skip them for awhile. Or even > better, read the book with a study group. > -- > Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your > own way and let people talk.) -- Karl, paraphrasing Dante. > > [*] The standard representative agent model is quite different from > Marx's view. The standard story is "let's pretend all consumers can be > represented by a single idealized consumer, ignoring all differences > among them." Marx's view is that Moneybags represents the shared > empirical characteristics of all of the members of the real-world > capitalist class. Even though CAPITAL is really abstract, it's an > effort to understand (and criticize) the empirical world. > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l >
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