Welcome, Michael, great to hear from you.
You write:
I'm just a tourist on this thread--- having managed once again to
overcommit myself, and so I haven't followed all the exchanges and have
just eyeballed and cherrypicked a few. Having gone many rounds with gil in
the past on his insistence on missing Marx's point about capitalist
production and capitalist exploitation (as opposed to exploitation of
commodity producers, eg, by usurers or merchant capitalists),
I don't think I'm missing Marx's point, but I wonder if you realize that
mine has evolved since our first exchanges on this subject several years
ago, thanks in part to your input. The problem with speaking of "Marx's
point" about capitalist production and capitalist exploitation is that he
has two distinct stories about their connection, which for convenience I
label his value-theoretic and historical-stage accounts. These accounts
were more or less commingled in the Grundrisse and the Economic Manuscript
of 1861-63, but by the published version of Volume I Marx had elevated the
value-theoretic account so that it served as the foundation for his
treatment of the systemic basis of surplus value, while his
historical-stage account, embodied in the "Resultate" and containing his
crucial theory of labor subsumption, was exiled entirely. Too bad, since
the two accounts lead to different conclusions about the connection between
capitalist production and capitalist exploitation, partly because the
value-theoretic account is logically invalid. As I explain below, Roemer's
isomorphism theorem provides a relevant indictment of that account because
the conditions on which his theorem is based *are not addressed one way or
the other* by Marx in the development of his value-theoretic account (in
the first 6 chapters of Capital V.I), and thus they are not ruled out in
deriving the categorical inferences Marx states in Chapter 6--one of which
is the basis for Walt's apt question that started this thread.
I bring up the cases of usurer's and merchant's capital because they
represent stages in Marx's historical analysis of the development of the
circuit of capital. As I discuss below, they are relevant because Marx
does not insist in this account that capitalist control of production [in
the sense of at least formal subsumption] is necessary for the existence of
capitalist exploitation, even under the capitalist mode of production.
Just to be clear: this thread is about the theoretical coherence and
empirical relevance of Marx's value-theoretic account of surplus value
through V.I, Ch. 6 of Capital, in particular Marx's conclusion in that
chapter that capitalists must hire (only) commodified labor power in order
to exploit labor. Your present contribution concerns the narrower question
of the theoretical validity of Marx's value-theoretic account through Ch.
6, and in particular, the relevance of Roemer's isomorphism theorem to that
account.
You continue:
I couldn't resist peeking at his latest set of restatements.
Well, I suppose some "restatements" are necessary in context. We're not
starting where we left off, Michael, this is a new thread with different
correspondents. But for what it's worth, the argument I'm excerpting here
has been continuously developed in three-going-on-four articles, and I've
already addressed, in print, all of the issues you raise in your post.
Besides, you once told me you thought my true problem was with Ch. 6, not
Ch. 5. I thought you'd be pleased by the progression...
You continue:
Similarly, I can't resist commenting on his chant:
"Chant"? I suppose that when you edit down my exchange with Jim,
especially without adding the appropriate ellipses to indicate where you've
done so [see below], then it's possible to make it look like a
"chant." Interesting. But why bother?
Specifically, I'm referring to Roemer's isomorphism theorem. I'm curious:
who exactly has "discredited" it, and on what grounds?
[N.B.: .....]
Again, who exactly "destroyed" Roemer's isomorphism theorem, and on
what basis? As an entirely separate question, whom do you think has
"destroyed"
Roemer's theory of exploitation writ large, as opposed to merely noting
qualifications to Roemer's conclusions?
Now in reply to these questions, you state:
In all due modesty, Gil, I destroyed it (although others pointed out its
flaws, too). I destroyed it in 'Is "Analytical
Marxism" Marxism?' (a) by pointing out that his 'credit market island'
didn't correspond to Marx's conception of capitalism but
explicitly to 'pre-capitalism' because capital in this case has not seized
possession of production'
And were I to show an equivalent level of modesty, Michael, I would say
that I've already refuted your supposed demolition job on Roemer's
argument, in print.
But let's take a look at your argument here. It is entirely true that
Roemer, in his analysis of "credit market island," does not posit the
condition that capital has "seized possession of production." But that
does not evidently disbar the relevance of his argument to Marx's
value-theoretic account through V. I, Ch. 6, *because Marx does not posit
this condition either* to that point. The degree of capitalist control of
production is *never mentioned* as a precondition for the inferences Marx
begins drawing out in Ch. 6. So if Marx doesn't invoke this condition as a
basis for his conclusions about the nature of capitalist exploitation, why
must Roemer?
[If you agree that Marx doesn't invoke this condition prior to his
conclusions in Ch. 6, you can skip the next 3 paras. Otherwise:]
[The closest Marx comes to introducing this issue is (1) his discussion of
the "general formula of capital" M-C-M' at the end of Ch. 4 (pp. 256-7,
Penguin ed.)--but there he allows that there are 3 manifestations of the
"general formula", interest-bearing capital (subject only to the
caveat--insignificant, as it turns out--that the circuit M-C-M' "presents
itself in abridged form....as M-M' "), merchants' capital, and industrial
capital, without specifying what distinguishes "industrial capital" from
the other two scenarios, let alone indicating that one particular aspect of
the difference--capitalist control of production--is central to his
argument, as you would have it; (2) his dismissive reference in Ch. 5 to
"antediluvian", i.e. strictly historical, forms of the circuit capital,
usurers' and merchants' capital, which he characterizes as involving only
redistribution of existing value (pp 266-7), rather than appropriation of
newly created value, per the "valorization" condition in his definition of
surplus value. But this is again problematic, because nowhere does he
state that, for his argument, the key condition distinguishing "the primary
form of capital" from these "antediluvian forms" is the degree of
capitalist control of production. (And at the end of this argument, he
asserts that merchant's capital and interest-bearing capital are
"derivative forms", but again never explains why.)
Furthermore, he provides no grounds for his categorical assertion that
these circuits merely redistributed existing value, rather than (at least
in some cases) allowing for appropriation of newly created value. This is
troubling, because (a) it is easy to identify versions of the circuit of
capital that involve appropriation of surplus value without capitalist
control of production, and (b) Marx himself elsewhere acknowledged that
even the antediluvian forms involved surplus value appropriation when they
financed the production of new value see, e.g., V.III, Ch. 20, p. 453 and
Ch. 36, p. 730; the Resultate, p. 1023 in the Appendix to V. I; and even
briefly in V.I, p. 645). Indeed, if you look at the portion of the
Economic Manuscript of 1861-63 that evolved into the published version of
V.I, Ch. 5, you'll see that he apparently acknowledged cases in which both
merchants' capital and usurer's capital appropriated surplus value rather
than redistributed existing value [Karl Marx/Frederick Engels Collected
Works, V. 30, pp. 30,32].
Finally, I suppose if one really wanted to stretch the matter, one could
invoke Marx's volume-opening reference to "the capitalist mode of
production." But again, he did not indicate what was meant by this term,
much less specify that it involved a condition, capitalist control of
production, that would become a critical premise in his argument. ]
So, you claim to "destroy" the relevance of Roemer's isomorphism theorem to
Marx's value-theoretic account through Ch. 6 by noting that Roemer doesn't
address a condition that Marx *also* doesn't invoke in the development of
that account. Hmm. I would say to the contrary to Roemer successfully
demonstrates that Marx's argument through this part of Capital is invalid.
But let us anticipate. How is our understanding of Marx's account altered
if we augment Marx's account in V.I, Part 2 with the assumption you
attribute to him, i.e. that capitalists have "seized possession of
production"? There are two ways this might be done. First, we might
imagine that Marx assumes capitalists have seized possession [in the sense
of at least *formal* subsumption of labor under capital] of *some*
production processes, but not all. This would certainly have been a
realistic form of the assumption. But then there's still the possibility
that capitalists could *also* appropriate surplus value by some means
*other* than purchasing and subsuming commodified labor power, including:
providing loans at interest to value producers; renting them constant
capital goods; or proto-industrial forms not involving even the formal
subsumption of labor under capital; thus denying Marx's categorical
conclusion in Ch. 6, and by the way, validating the relevance of Walt's
original question.
As an empirical matter, too, it was certainly possible for capitalists to
appropriate surplus value by these alternative means, even once the era of
the capitalist mode of production had begun. Marx himself makes this clear
in his V. III analysis of then-contemporary worker owned firms
("cooperative factories"), in which he notes that such firms not only
provided loan capitalists surplus value in the form of interest, even
"sometimes a much higher interest than private factories [paid]." [p. 512]
As for the scenario of proto-industrial production, your former student
Maxine Berg (among others) has noted the viability of proto-industrial
arrangements, without even formal subsumption of labor, well into the era
of the capitalist mode of production. So on both theoretical and empirical
grounds, positing that capitalists have seized control of *some* production
processes is inadequate to support Marx's *categorical* Ch. 6 conclusion
that capitalists must exploit labor by purchasing (only) labor power as a
commodity.
So what's left? Well, we could imagine instead that Marx assumed prior to
Ch. 6 that the circuit of capital proceeded *solely* on the basis of
industrial capital--i.e. on the basis of the purchase and subsumption of
commodified labor power. [And indeed, that's the interpretation insisted on
by the two respondents to my Science & Society articles]. But in that
reading, Marx must be understood as *assuming* the conclusion he manifestly
intends as an *inference* of his value-theoretic analysis: that is, he
assumes that all exploitation takes place on the basis of the circuit of
industrial capital, and then concludes that all exploitation must proceed
on the basis of the purchase of commodified labor power--one of the
defining characteristics of that circuit. In other words, this reading
turns Marx's argument into a pointless tautology.
In sum, I don't see how your criticism here "destroys" Roemer's isomorphism
theorem--unless it also "destroys" Marx's value theoretic account as well
by rendering it circular.
and (b) by demonstrating that he achieved his equivalency result with the
'labour market island' case
by smuggling in assumptions (like extracting labour from the worker is as
easy as picking apples from a tree--- precisely the argument that he knew
had nothing to do with Marxism in his 'Analytical Foundations' book).
First, why do you accuse Roemer of "smuggling in assumptions" to achieve
his isomorphism result? He's quite clear--and much clearer than Marx is,
apparently--about the assumptions he makes in establishing this
result. For example, right after stating his isomorphism theorem
in _General Theory of Exploitation and Class_, he discusses the
assumptions underlying the result, including that he has abstracted from
imperfections that create supervision costs in "extracting labor from the
worker" [pp. 93-4].
But second, and again, it's hard to see how it matters that Roemer made
these abstractions, because Marx *also* abstracts from problems of
extracting labor from labor power in his value-theoretic account through
Ch. 6--at least, he never mentions anything about such problems up through
that point in his argument. Thus, since these are not considerations
invoked in *Marx's* argument, I don't see your basis for criticizing the
relevance of Roemer's theorem because *he* doesn't invoke them.
Third, even were we to allow that Marx introduced these considerations in
his value-theoretic account through Ch. 6, they do not automatically
establish that capitalist purchase and subsumption of labor power are
*necessary* for the existence of surplus value, as required by your
argument. As Roemer points out in the discussion of his theorem [p. 94]
and I elaborate in my articles, these considerations suggest only that
capitalist purchase and subsumption of labor power are necessary for the
*maximal realization* of surplus value, not its existence, which again does
not support Marx's categorical conclusion in Ch. 6.
Go back and read the article (Science & Society, Summer 1988 or in its
various subsequent translations).
I've already had that pleasure, Michael. I read it repeatedly and I hope
carefully in preparing the portion of my Ec & Phil article that responded
specifically to it. Perhaps you might go back and read it--Economics and
Philosophy 1995, or its subsequent republication in the book _Key Concepts
in Critical Theory: Exploitation_. Most of the arguments made above are
also made in that article and then developed further in the subsequent
Science & Society articles.
I also in the article explicitly argued that so-called Analytical Marxism
was 'anti-Marxism'.
And in my article, I responded to this criticism by explicitly arguing that
it didn't matter if Roemer's analytical framework was somehow
"anti-Marxist," because it invoked conditions that Marx not only failed to
rule out in his value-theoretic account in V. I, Part 2 of Capital, but
often explicitly embraced in various other parts of Capital [e.g.,
self-serving, optimizing individuals and frictionless exchange]. If
Roemer's analysis is internally consistent and based on premises that Marx
either embraces or does not dismiss, then it's hard to see how they are
irrelevant to Marx's account even if they are somehow "anti-Marxist" in
flavor.
I returned to the point in 'Analytical Marxism and the Marxian Theory of
Crisis' (Cambridge Journal of Economics, May
1994), saying similarly nasty things about his argument (as well as
Elster's). The dogs didn't bark--- ie., no answer from up high.
And political economy abhors a vacuum, so I stepped in from "down low" and
responded to this line of criticism in my E& P article.
Subsequently, in Studi Perugini in 1998, I wrote a postscript to a
translation of the former, pointing out that Roemer had scuttled the whole
argument anyway when went on to his market socialism argument (because
suddenly getting them apples wasn't so easy).
I don't really see the basis for that conclusion. First, Roemer's
isomorphism theorem still constitutes a valid refutation of Marx's account
through V.I, Ch. 6 for the reasons given above. Second, the strategy of
Roemer's model of market socialism in, e.g., _A Future for Socialism_ is to
mimic, up to the point of the distribution of ownership shares, the
institutions of developed capitalism, in whatever form they occur. Thus,
by design, the only difference between the two systems is that public
ownership shares are distributed in an egalitarian manner, rather than
determined by pre-existing wealth inequalities and asset market
transactions as in the capitalist status quo. His implicit argument, then,
is that public owners don't face a substantially worse problem of
motivating corporate managers than do private stockholders in the
capitalist system. This has no direct connection to Roemer's claim in his
isomorphism theorem, which is based on different conditions.
Presumably, though, you still think that his argument is valid.
This aspect of his argument, anyway, for reasons suggested above.
I've reviewed this lately because all of these pieces will appear in my
'Following Marx: the Method of Political Economy' (which I'm very late
copy-editing for Brill), and I've added a footnote to my statement about
'Analytical Marxism' being anti-Marxist: 'When I made this point in the
original essay, I thought I was being bold and provocative. Re-reading the
essay now, it seems to me that any other evaluation was always ludicrous.'
And still, per my responses to that evaluation, essentially beside the
point, at least with respect to the relevance of Roemer's analysis for
Marx value-theoretic account through V.I, Part 2 of _Capital_.
For what it's worth, by the way, I have a newer paper tracing the
development of Marx's value-theoretic and historical-stage accounts of
capitalist exploitation beginning with the Grundrisse and continuing
through the Economic Manuscript of 1861-63 and the extant portions of the
penultimate draft of _Capital_, right up to the published version of
Capital V. I, in which Marx elevates a newly modified version of his
value-theoretic account and obscures his historical-stage account by
removing the Resultate chapter. I can send it if you're interested.
As for the other matter preoccupying folks, perfectly specified contracts:
Marx wrote about piecework-- the explicit payment for work performed. He
didn't seem to have any problem understanding this as a mere form which
belied its content (even more so than the payment of a wage for a specific
quantity of labour).
What "other" matter? The viability of contracting in capital/labor
exchanges has been central to the discussion all along. Yes, Marx wrote
about piecework--but not until Ch. 21, and therefore these considerations
evidently didn't inform the inferences he draws back in Ch. 6.
In any case, I don't see the relevance of your reference here. Nobody's
denying Marx's contention that surplus value is derived from having workers
do more labor than is embodied in their compensation bundles. What is at
issue is Marx's unjustified inference in Ch. 6 that this must be done on
the basis of purchasing [just] the capacity to work [and then subsuming it
within capitalist-controlled production].
It all comes back to the question of the reproduction of the
wage-labourer. The reproduction of capital, recall, has as its
necessary condition the reproduction of the wage-labourer. So, how does
payment of a wage for labour or payment for piece-work ensure the
reproduction of the wage-labourer (ie., the maintenance of the capital
relation)?
But to speak of "reproduction of the wage-laborer" as a "necessary
condition [for] the reproduction of capital" is to beg the central question
at hand, Michael. Worker-owners in worker-owned firms that borrow money at
interest to finance production are not "wage laborers." Independent
commodity producers who rent constant capital goods are not
"wage-laborers." Even external contractors providing [just] specified labor
services are not wage-laborers in the sense Marx uses in Ch. 6. If
capitalists can appropriate surplus value on the basis of these alternative
forms, then in what sense is reproduction of the wage-laborer a *necessary*
condition for the reproduction of capital? And how does Marx establish
that necessity in the 1st 6 chapters of Vol. I?
Two closing comments to help make clear what's at issue here. First, as
you know, Marx argues in Ch. 5 that commodity price-value disparities,
although the general case empirically, are nonetheless "incidental" to the
existence of surplus value. The core point I'm making here is that Marx's
value-theoretic analysis through the first six chapters of V. I. is
logically incapable of ruling out the parallel judgment that the purchase
and subsumption of commodified labor power, although the general case
empirically, are nonetheless *incidental* to the existence of surplus
value. That's a problem.
Notice second that I'm *not* insisting that Marx makes no coherent argument
*anywhere* to support the position that the purchase and subsumption of
labor power are more than incidental to the existence of surplus value. I
believe he does, in his historical-stage account, as opposed to his
value-theoretic account through Ch. 6--but it has a very different flavor
than the value-theoretic story he tells in the first part of Volume I. In
important ways, it appears to be more consistent with Roemer's story,
particularly in the following respects:
1) Capitalist production based on commodified labor power is in general
neither necessary nor sufficient for the existence of capitalist
exploitation. With regard to necessity, the relationship between purchase
and subsumption of commodified labor power on one hand and capitalist
exploitation on the other is *contingent* rather than *categorical*, having
to do with conditions for the *maximal realization* of surplus value rather
than its *existence.* With regard to sufficiency, capitalist production
based on commodified labor power cannot of itself ensure the existence of
capitalist exploitation if the labor market is sufficiently competitive on
the demand side.
2) Differential ownership of scarce productive assets (DOSPA) is both
necessary and (up to a matter of degree involving contractual imperfections
and capitalist strategic responses to same) sufficient for capitalist
exploitation. However, it remains an open question what exactly ensures
the persistence of capital scarcity in an accumulating economy, because
Roemer's essentially static framework based on absolute scarcity can't
address the issue (Roberto Veneziani has elaborated nicely on this point)
and Marx's "general theory of capitalist accumulation" in V.I. Ch. 25
assumes what it must prove, i.e. that capitalists won't invest their
profits until capital is not scarce. In a two-class model such as Marx
analyzes in Vol I, some additional condition must be introduced to explain
why there can exist investable profits that are nonetheless not used for
capital accumulation when the presence of an industrial reserve army
ensures that the supply of labor power does not constrain the rate of
accumulation.
There is probably some alternative way of posing these points so that they
have a more "Marxist" flavor, but I think the points themselves have some
validity, however stated. The critique also suggests a corollary that
can't have a Marxian flavor, but seems to me unavoidable:
3) The connection between commodity values and their respective prices has
no interesting role to play in accounting for the relationship between
labor power commodification and subsumption and capitalist
exploitation. In particular, the scenario of commodity exchange at value
that Marx features in Chs. 5 and 6 is of no coherent theoretical
interest. Thus, answering the question "how can surplus value exist given
that all commodities exchange at value?" is essentially irrelevant.
For what it's worth--
Gil
