Comments for Michael Roberts Blog

Comment on Michael Heinrich, Marx’s law and crisis theory by Mike Ballard

Mike Ballard — Fri, 24 May 2013 05:20:06 +0000

Right. The social relation of Capital is based on the wage system. Only the workers have the power as a majority class to change the mode of production and exchange to one where commodity production has been sublated by production for use with distribution of goods and services based on need….with a possible transitional period where distribution is based on socially necessary labour time put in (with a few deductions for social needs outside the production process).

Comment on Michael Heinrich, Marx’s law and crisis theory by Mike Ballard

Mike Ballard — Fri, 24 May 2013 05:12:42 +0000

The social relation of Capital can only be destroyed by the workers organised as a class for themselves.

Comment on Michael Heinrich, Marx’s law and crisis theory by Mike Ballard

Mike Ballard — Fri, 24 May 2013 05:10:47 +0000

Price is a funny, fuzzy kind of exercise in economic quantum mechanics. Sometimes, it reflects more than the socially necessary labour time embodied in the good or service; sometimes less. Most often, on a macro-scale, it revolves around it gravitational centre, its value as a galaxy revolves around its black hole.

Comment on Michael Heinrich, Marx’s law and crisis theory by S. Artesian

S. Artesian — Thu, 23 May 2013 21:42:30 +0000

Production price is the cost-price plus the capitalists’ assumed profit. There is no such thing as “perfect competition” just as there is no such thing as an “invisible hand” a “free market” etc.– just as in fact, individual prices do not correspond to individual values. However the social process of valorization does amount and account for imperfect competition, visible hands, free-state markets etc. etc.

Does the so-called “state-monopoly-capitalism” change, alter, the fundamental identity of capital? Does it change what constitutes value? Does it change the relations between the organization of labor, and the conditions of labor? Does it change the mode of production?

I think the answer to all of the above is no, so that what Marx analyzed in his economic manuscripts, in Capital, is still valid because the essential organization of capital as the expropriation of living labor through the wage form has not changed. And… that essential organization IS the law of value.

Comment on Michael Heinrich, Marx’s law and crisis theory by fosforos17

fosforos17 — Thu, 23 May 2013 20:29:53 +0000

When S. Artesian says “Monopolistic advantage pretty much accounts for nothing” he is dismissing pretty much everything about modern capitalism, which for good reason has been known to Marxists as state-monopoly-capitalism for a few generations now. For him, intellectual property (even extending to “trade secret” protection for industrial pollutants), the centerpiece of international trade policy, counts for nothing. And likewise when he says “Labor-time– manifested as “cost-price” is indeed the center of gravity. Prices of production are the deviation” he ignores two things: Marx explicitly recognizes that “production prices” *are* the cost-of-production prices of Smith and Ricardo (and, of course, Marshall and all classical economists) and that they are conditioned on and established through perfect competition which is the only market structure allowing the free entry of capital into all fields where a higher profit can be expected–the condition for the equalization of profit rates. Oligopoly (shared monopoly) or even “imperfect” or “monopolistic” competition, necessarily (by extorting increased amounts of surplus-value over the monopolists’ “aliquot share”) increases the deviation of really-existing market prices over cost-of-production prices

Comment on Michael Heinrich, Marx’s law and crisis theory by S. Artesian

S. Artesian — Thu, 23 May 2013 18:47:33 +0000

Monopolistic advantage pretty much accounts for nothing when confronting the necessities of value appropriation. Deloitte & Co. publishes every year a “shift index” analyzing profitability of corporations and changes in profitability. Overall they include that competitiveness in the US economy is much greater than it was 10 or 20 years ago.

Moreover, we need only look at the semiconductor industry to note how irrelevant “monopoly” status is to value production and realization.

When fosforos is talking about “pricing power” all he is describing is the role prices of production play in distributing profits among capitals. “Monopoly” such that it is only generates pricing power to the degree that its appropriation of labor is realized socially through the transfer of surplus value from other less efficient enterprises.

Labor-time– manifested as “cost-price” is indeed the center of gravity. Prices of production are the deviation, variation, manifestation of the laws of capitalist production. Prices of production are so to speak “exceptions” that in fact are the proof of the rule.

Comment on Michael Heinrich, Marx’s law and crisis theory by Paul Cockshott

Paul Cockshott — Thu, 23 May 2013 15:36:19 +0000

Fosforos is confusing two things here:
a) what actually happens in a capitalist economy
b) what Marx thought happens.

a)As to what happens, Allin Cottrell and I showed as far back as 1995 that for the UK economy actual profit rates in industries are inverseley related to the organic compositions of capital just as would be exepected from Capital Vol I. (see http://users.wfu.edu/cottrell/vol3.pdf) we then verified that the same holds for the US economy ( A note on the organic composition of capital and profit rates
WP Cockshott, A Cottrell – Cambridge Journal of Economics, 2003). Others have subsequently verified this for all of the OECD.

For the USA the classical price of production theory only applies to state regulated utilities like electricity, so for the particular example chosen by Fosforos what he says is valid, but for the generality of industries it is not.

This inverse empirical relation between profit rate and organic composition only makes sense in the light of the labour theory of value.
b) Marx says two inconsistent things on organic composition and profit rate. On the one hand he puts forward the theory of transformation of values to prices of production, but on the other hand he says that industries with a high organic composition like Railways do not earn average profits but only the rate of interest so when confronted with conflicting empirical evidence, he modifies his basic theory.

Comment on Michael Heinrich, Marx’s law and crisis theory by Choppa Morph

Choppa Morph — Thu, 23 May 2013 14:54:04 +0000

fosforos17 couldn’t really have put it more clearly. The high tech low-labour corporations do indeed pump home much more surplus value than their low-tech rivals. If fosforos would care to read Capital, especially Book 3, Chs 9 and 10 (The Formation and Equalization of a General Rate of Profit) s/he would see that this is precisely the point of the whole analysis.
The problem to be solved is why different spheres of production with such different rates of surplus-value nonetheless end up with the same average rate of profit. And Marx solves it by demonstrating how values are transformed into prices of production, and the whole of the capitalist market is transformed into one single organ of production and circulation generating an aggregate surplus value that is divvied up as profit between all capitals producing it according to their ownership share in the aggregate capital in the system.
The only condition on the market prices of the commodities is that they cannot fall below the cost of production without bankrupting their producer. But the actual amount of surplus value (surplus general necessary labour-time) contained in the final market prices varies according to the average general rate of profit in the market system as a whole, not according to the rate of surplus value in the particular sphere of production of any given commodity.
Hence the value-pump operating in capitalist society by which the value produced in labour-intensive spheres of production (services – McDonald’s, underdeveloped agriculture, simple manufacturing – garments, etc) gets sucked out of these spheres (often whole countries with low-tech production) and into high-tech, advanced spheres of production (and countries).

Comment on Michael Heinrich, Marx’s law and crisis theory by fosforos17

fosforos17 — Thu, 23 May 2013 14:10:05 +0000

Paul and Choppa simply ignore both Marx’s theory of price and capitalist reality when they take labor-time as the “center of gravity” of average price. Any enterprise with a high organic composition of capital (say an electric-power generator), selling power at its price (ie., cost) of production, will receive far more surplus-value in relation to its labor-cost than will a company with average organic composition. Any enterprise with a monopolistic advantage will gain more surplus-value relative to a company of the same organic composition in a competitive market. And since the companies with highest organic composition also tend to be the biggest, most monopolistic, ones, the gap in profit margin between such a one and the “average” lower composition/ higher competitivity enterprise is multiplied accordingly. Actually expended labor-time thus has no necessary relationship to price, whether in theory or in reality.
company

Comment on Michael Heinrich, Marx’s law and crisis theory by Choppa Morph

Choppa Morph — Thu, 23 May 2013 11:01:18 +0000

I think Paul is right here, but there could well be a problem in Horace’s formulation: “the amount of labor concretely used to produce a commodity”. Marx takes a great deal of trouble to distinguish between the concrete work applied to a commodity (hammering, cutting, sewing for a cobbler making a shoe, say) and the abstract, general, homogeneous social labour applied throughout an economic system to all commodities. This latter, which can be measured in terms of necessary labour-time in every commodity, forms the basis for the theory of value.
If we are clear on this, then it’s easy enough to grasp that an economic system (say the capitalist world market) only disposes of so much such labour-time for any given period, and that the conditions of capitalist exchange compel this labour-time to be doled out proportionately between all the commodities being exchanged in the system. The portion of socially necessary abstract general labour-time in any given commodity is then the value of this commodity.
All the rest follows from this assumption, which was used by Smith and most consistently by Ricardo (“our” classical bourgeois economists, so to say). Marx used the same assumption but worked out its consequences far more rigorously and in far greater detail than Smith or Ricardo. Largely but by no means exclusively because he wasn’t put off by the unpleasant implications it held for the capitalist system and bourgeois society as transient historical phenomena in the way that his bourgeois predecessors were.