In response to this comment: >>Yeah, Jim, but that assumes some sort of incomplete contracting situation >>so that capitalists can't contract for specific labor services. But I >>take Walt's point to be: what if they can, as in the case where firms >>engage outside contractors to perform specific tasks, and pay them if and >>only if those specific tasks are performed? In that case, what would be >>the value of the services thus transacted?
Paul P. writes: > But here we are not talking about wage labour if you are purchasing a > specific good/service from an independent commodity producer. [N.B.: Not just any "independent commodity producer," but by assumption a producer of [only] labor services.] > In this case, the surplus is produced by the producer but is > appropriated by the contracting capitalists by unequal exchange. Yes, but from the standpoint of surplus value creation, they are isomorphic. That is, whatever the systemic conditions that make possible "unequal exchange" in this scenario also make it possible for capitalists to extract more labor from wage workers than is embodied in their wage bundles. Let's take it a step further: given no contracting failures (which is the assumption that motivated this thread), the previous cases are also isomorphic to a scenario in which the workers in question, instead of being hired by capital, instead "hire capital", i.e. borrow money to finance production of new value, and yield surplus value to capital in the form of the interest paid on the loan. *Given* perfect contracting, the existence and magnitude of surplus value in all three cases is explained by the same systemic conditions. First corollary: this is another illustration of my earlier comment that there are two distinct things going on in Marx's account in capital V.I Ch. 6. One issue concerns the *form* of the capital/labor transaction: does capital hire labor or vice versa? And if the former, does capital engage workers simply as labor power, or contract for specific labor services? The other issue concerns the systemic basis for surplus value, i.e. what conditions make it possible for capitalists to appropriate a portion of the new value created within the circuit of capital in question. But there is no *necessary* economic connection between the two issues, and given the premise of perfect contracting, there is no connection at all, leading to the isomorphism statement above. 2nd corollary: the phrase "unequal exchange" in describing the labor services case discussed above makes it sound like there is something importantly different in that scenario from the scenario of purchasing labor power at its value and then extracting surplus labor. But there isn't, because the case of "exchange at value" is a red herring. There's nothing theoretically, non-tautologically interesting about this scenario--it doesn't correspond, for example, to a situation of "competitive exchange" except under very special, never empirically realized conditions that may obscure what makes surplus value appropriation possible in the first place. [Contrast that with the scenarios of contracting for specific labor services and labor "hiring" capital at interest, both of which occur routinely in capitalist economies.] Note: all of my comments above should be read as if prefaced by "On the basis of the theoretical framework I'm working within" or something like that. I think that framework is internally coherent and arguably relevant, but its validity may be in the eye of the beholder.
