Wednesday 2 May 2018

Theories of Surplus Value, Part II, Chapter 15 - Part 35

For capital to act as capital, it must produce surplus value, and consequently, the capitalist cannot simply exchange 100 hours of labour in the form of wage goods for 100 hours of labour, i.e. an exchange of labour with commodities, but must exchange more than 100 hours of labour for the 100 hours of commodities they give in return. Not an exchange of labour with commodities, but an exchange of labour with capital. 

“Instead of labour, Ricardo should have discussed labour-power. But had he done so, capital would also have been revealed as the material conditions of labour, confronting the labourer as power that had acquired an independent existence and capital would at once have been revealed as a definite social relationship. Ricardo thus only distinguishes capital as “accumulated labour” from “immediate labour”. And it is something purely physical, only an element in the labour-process, from which the relation between labour and capital, wages and profits, could never be developed.” (p 400) 

The question then is what determines that workers sell their labour-power at its value, but that, in the process, they provide unpaid labour to capital, and what determines the extent of the unpaid labour? 

The weakness in Ricardo's argument, whereby he determines the value of labour differently to other commodities, but fails to explain exactly why, is picked up by Samuel Bailey, who proposed a theory of subjective value. For Bailey, as with orthodox theory, value is not objectively determined. Value and market price are identical, reflecting merely the interaction of supply and demand, which in turn are merely an aggregated representation of each individual's subjective preferences. On this basis, value and exchange value are identical. The value of a commodity cannot be known directly, but can only be measured indirectly, in terms of the proportions in which it exchanges for other commodities, and these exchange relations continually change, because individual preferences continually change. Those economists who fetishise gold as money, arrive at a similar conclusion. That weakness can be seen in the work of Sam Williams, for example. (See my discussion of this with Terry Coggan et al.) 

On this basis, once a money commodity, such as gold, arises, the value of every commodity is then measured indirectly by the proportion in which it exchanges with gold (money), which simply represents its exchange relation to every other commodity. So, as soon as Ricardo introduces the concept of the value of labour being determined by supply and demand, and represented by wages, Bailey seizes upon it. He writes, 

““Mr. Ricardo, ingeniously enough, avoids a difficulty, which, on a first view, threatens to encumber his doctrine, that value depends on the quantity of labour employed in production. If this principle is rigidly adhered to, it follows, that the value of labour depends on the quantity of labour employed in producing it—which is evidently absurd. By a dexterous turn, therefore, Mr. Ricardo makes the value of labour depend on the quantity of labour required to produce wages, or, to give him the benefit of his own language, he maintains, that the value of labour is to be estimated by the quantity of labour required to produce wages, by which he means, the quantity of labour required to produce the money or commodities given to the labourer. This is similar to saying, that the value of cloth is to be estimated, not by the quantity of labour bestowed on its production, but by the quantity of labour bestowed on the production of the silver, for which the cloth is exchanged.” (Samuel Bailey, A Critical Dissertation on the Nature, Measures, and Causes of Value, etc., London, 1825, pp. 50-51.)” (p 401) 

Marx comments, 

Literally the objection raised here is correct. Ricardo distinguishes between nominal and real wages. Nominal wages are wages expressed in money, money wages.” (p 401) 

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