Re: more on M - M' (was Marx on interest
Below, quotes preceded by "" are from me (from a comment on a missive by Steve Keen). Those preceded by "GS" are from Gil Skillman. Those preceded by "VK" are by Victor Kaspar. I added my further comments, marked by "JD." (I've edited for readability and left out some of Victor's comments.) ... an individual may claim a share of societal surplus-value simply by lending and collecting interest (M -M') because behind the scenes is the exploitation of labor. GS: Hmm. This seems to beg a question, namely that the existence of a circuit M-M' such that M' M is in fact *tantamount* to exploitation of labor, as can easily be shown. VK: In part V chapter 21 of Capital, (International Publishers) Marx examines the circuit of money capital. In the context of the chapter, my reading would agree with Jim. The wording is awkward at times but the message to me is that to the Money lending capitalist "that the use-value of loaned capital appears as its faculty of begetting and increasing value" (p. 351). My reading is that the circuits in the production process where labor is being exploited are hidden from view. The lending of capital by the money lending capitalist makes possible its use by the commercial capitalist or the industrial capitalist who in the labor process exploits labor. JD: Whether M-M', M'M is "tantamount" to exploitation of labor depends on one's definition of exploitation. There are at least two definitions of "exploitation." One is the individual definition: an individual gains at the expense of another. Another is the societal definition, Marx's vision of class exploitation: one class gains at the expense of another. I interpret Marx as saying that individual usurers can exploit workers because of the societal existence of class exploitation (and I agree). They can claim part of the societal surplus-value that industrial capitalists extract from workers. This societal process is "hidden from view" to the individual usurers. (I leave out commercial capitalists for simplicity.) BTW, it's possible to have individual exploitation which does not correspond to class exploitation. The former, e.g., robbery or unequal exchange (pure redistribution), need not exist at the same as the latter, which typically corresponds to the production of a surplus. GS: On this score I note that even Anwar Shaikh's _Palgrave_ definition of exploitation does not require direct coercion in production as a precondition. VK: P. 167 in Palgrave by Shaikh: "The exploitative base of class society makes it a fundamentally antagonistic mode of human existence, marked by simmering hostility between rulers and ruled, and punctuated by periods of riots, rebellions and revolutions. This is why class societies most always rely heavily on ideology to motivate, and to rationalize the fundamental social cleavage upon which they rest, and on force to provide the necessary discipline when all else fails." Granted it may not always be 'direct coercion in production.' If you have been deprived of the means of production and you grow your own food on land that has been legally defined by the class in power as their own the police power comes down. Having been alienated from the conditions of existence, the working class voluntarily works. The police and the army maintain these relations. Ideology will legitimize the process to some so that it appears that for some no force is being used. JD: In addition, as Gil well knows, I have been using the word "coercion" in a broad sense to include threats of firing, demotion, pay-cuts, and the like. (See Dymski and my critiques of Roemer in ECONOMICS AND PHILOSOPHY, 1991,1992 and in the REVIEW OF RADICAL POLITICAL ECONOMICS, 1989. I also called it "micro subsumption" in an overly-long missive over pen-l last year.) Coercion includes such structural coercion as the existence of the reserve army of the unemployed (so that threats to fire workers need not be vocalized). In general, "coercion" refers to relations among people that go beyond the Walrasian ideal of voluntary exchange. The point here is that if we truly want to *understand* exploitation as opposed to merely constructing formal models that *describe* it (a la Roemer), we need to avoid Walrasian models. There are lots of other reasons to drop Walrasian models, including many familiar to students of Keynes. Abandon Walras, all ye who wish to understand the world! GS: Also note Marx's comment in Volume III: "Usurer's capital has capital's mode of exploitation without its mode of production." Usury, of course, is just M-M', and Marx is here describing social relations prior to capitalism. VK: Prior to capitalism as a mode of production or if you want a social formation fostering a specific type of surplus extraction, money lending capitalists (usurers) could exploit the feudal mode of production. It would not be a direct form of labor exploitation that takes place in the work process under the capitalist social formation. For Marx,
Re: more on M - M' (was Marx on interest
On Sat, 26 Feb 1994 11:17:06 +1000 Steve Keen said: (concerning the quote from Marx about M-M') Re whether the analysis fits within the structure of volume I of capital. I would argue that it can, as I detailed beforehand, but that there's no way Marx (or I) argued that it is a source of surplus-value. The quote, however, is one of (many) illustrations that I can give of Marx drawing a quantitative distinction between use-value and exchange-value when the use-value of a given commodity (labor-power, capital or money) is a quantitative rather than qualitative thing. (edited for readability) This fits with my reading: M-M' is referring to societal (class) exploitation. But how can use-value be quantitative?? that doesn't fit with his discussion in vol. I, chapter 1. in pen-l solidarity, Jim Devine BITNET: jndf@lmuacadINTERNET: [EMAIL PROTECTED] Econ. Dept., Loyola Marymount Univ., Los Angeles, CA 90045-2699 USA 310/338-2948 (off); 310/202-6546 (hm); FAX: 310/338-1950
RE: more on M - M' (was Marx on interest
in general and not to any one person. I feel that by separating the class and non-class aspects og finance and debt will greatly clear up some of the issues. For example, if we define class processes by their relationship to surplus value then the class prcesses become clearer. The subsumed class (possibly financiers) is only engaged in a class process if the interest paid to them is infact a distribution of SV. Interest paid by consumers or interest paid through Ponzi deals are not distributions of SV and hence the group of institutions which provide the debt are engaged in non-class processes. why?? why aren't interest payments by consumers part of SV? why aren't interest payments from Ponzi deals? (when interest is actually paid -- Ponzi deals almost inevitably fall aprt apart.) The integration of non-class and class processes in finance provides a valuable tool in terms of understanding not only interest rates but also crisis. It is true that the financiers are fighting over their share of SV. However, they are also engaged in non-class struggles which are not linked to SV. For example, in Minsky's theorization of Ponzi financing debt is used primarily for paying past debt. Therefore, no SV was created and interest rates were very high with profits (SV) being very low. I think what this isa about is the difference between fictitious capital -- which expected to give one a claim on surplus value ex ante -- and the real thing, which actually delivers. There's a g big difference between expectations and reality (especially in a Ponzi scheme). Or did I misunderstand David? in pen-l solidarity, Jim Devine BITNET: jndf@lmuacadINTERNET: [EMAIL PROTECTED] Econ. Dept., Loyola Marymount Univ., Los Angeles, CA 90045-2699 USA 310/338-2948 (off); 310/202-6546 (hm); FAX: 310/338-1950
more on M - M' (was Marx on interest
Steve, Thanks for the quotes from Marx. Though I read them before (years ago), it's good to have them in a computer file. I can't believe that Marx said that the minimum level of the interest rate is "altogether indeterminable." At least in the long run, the real interest rate shouldn't be negative. Continuing, I agree that Marx's view fits with a liquidity preference framework: during a crisis, there's a scramble for liquidity that drives up interest rates. I don't think Marx was clear about stocks and flows, though. More importantly, I'm wondering about the following quote (extracting from your file): (begin quote) BTW, in the light of the long-past discussions I took part in on pen-l on Marx's use-value/exchange-value logic, I can't resist highlighting one of the following quotes: `As in the case of labour-power, the use-value of money here is its capacity of creating value a value greater than it contains.'Ibid, p. 392. (end quote) My question: in this quote, is Marx talking at the level of "appearances"? i.e., in reference to "the various forms of capital, [as evolved in vol. III of CAPITAL] ..., [which] thus approach step by step the form which they assume on the surface of society, in the action of different capitals upon one another,in competition, and in the ordinary consciousness of the agents of production themselves"? (quote from first page of vol. 3). Or is this quote at the level of abstract capital, i.e., the hidden social structure that Marx reveals in vol. I of CAPITAL? If it is the former, it fits well with Marx's theory of exploitation: an individual may claim a share of societal surplus-value simply by lending and collecting interest (M -M') because behind the scenes is the exploitation of labor. If it is the latter, then Marx is contradicting his own theory: he's saying that one can earn interest, create surplus-value, simply by lending, following what W.W. Rostow termed "the magic of compound interest." Reading the context of your quote, it looks like the former interpretation is accurate: immediatately before, he says "Instead of the actual transformation of money into capital, we see here only form without content." I interpret this as saying that M - M' is a pale imitation of the actual production of surplus-value. Later he calls M - M' "the fetish form of capital and the conception of fetish capital" and "the meaningless form of capital." To me, Marx is saying that even though it _seems_ in the ordinary consciousness of the participants of the system that money has the use-value of producing surplus-value (and this consciousness is not simple false consciousness but the fetishized view from the inside of the system) _in reality_ this interest is a redistributed part of the social surplus-value produced via the exploitation of labor. in pen-l solidarity, Jim Devine BITNET: jndf@lmuacadINTERNET: [EMAIL PROTECTED] Econ. Dept., Loyola Marymount Univ., Los Angeles, CA 90045-2699 USA 310/338-2948 (off); 310/202-6546 (hm); FAX: 310/338-1950
RE: more on M - M' (was Marx on interest
Hello, My name is David Brennan and I'm currently working on some of the hot interest rate and value theory issues. I am responding to the conversations in general and not to any one person. I feel that by separating the class and non-class aspects og finance and debt will greatly clear up some of the issues. For example, if we define class processes by their relationship to surplus value then the class prcesses become clearer. The subsumed class (possibly financiers) is only engaged in a class process if the interest paid to them is infact a distribution of SV. Interest paid by consumers or interest paid through Ponzi deals are not distributions of SV and hence the group of institutions which provide the debt are engaged in non-class processes. The integration of non-class and class processes in finance provides a valuable tool in terms of understanding not only interest rates but also crisis. It is true that the financiers are fighting over their share of SV. However, they are also engaged in non-class struggles which are not linked to SV. For example, in Minsky's theorization of Ponzi financing debt is used primarily for paying past debt. Therefore, no SV was created and interest rates were very high with profits (SV) being very low. I think the problem that emerges in disscussing interest rates is that most people think it is a purely class process (M-P-M') or completely a non-clas s process (M-M'). It looks like both conceptions are needed to grasp the complexity of financial crisis.
more on M - M' (was Marx on interest
Steve, Thanks for the quotes from Marx. Though I read them before (years ago), it's good to have them in a computer file. I can't believe that Marx said that the minimum level of the interest rate is "altogether indeterminable." At least in the long run, the real interest rate shouldn't be negative. Continuing, I agree that Marx's view fits with a liquidity preference framework: during a crisis, there's a scramble for liquidity that drives up interest rates. I don't think Marx was clear about stocks and flows, though. More importantly, I'm wondering about the following quote (extracting from your file): (begin quote) BTW, in the light of the long-past discussions I took part in on pen-l on Marx's use-value/exchange-value logic, I can't resist highlighting one of the following quotes: `As in the case of labour-power, the use-value of money here is its capacity of creating value a value greater than it contains.'Ibid, p. 392. (end quote) My question: in this quote, is Marx talking at the level of "appearances"? i.e., in reference to "the various forms of capital, [as evolved in vol. III of CAPITAL] ..., [which] thus approach step by step the form which they assume on the surface of society, in the action of different capitals upon one another,in competition, and in the ordinary consciousness of the agents of production themselves"? (quote from first page of vol. 3). Or is this quote at the level of abstract capital, i.e., the hidden social structure that Marx reveals in vol. I of CAPITAL? If it is the former, it fits well with Marx's theory of exploitation: an individual may claim a share of societal surplus-value simply by lending and collecting interest (M -M') because behind the scenes is the exploitation of labor. If it is the latter, then Marx is contradicting his own theory: he's saying that one can earn interest, create surplus-value, simply by lending, following what W.W. Rostow termed "the magic of compound interest." Reading the context of your quote, it looks like the former interpretation is accurate: immediatately before, he says "Instead of the actual transformation of money into capital, we see here only form without content." I interpret this as saying that M - M' is a pale imitation of the actual production of surplus-value. Later he calls M - M' "the fetish form of capital and the conception of fetish capital" and "the meaningless form of capital." To me, Marx is saying that even though it _seems_ in the ordinary consciousness of the participants of the system that money has the use-value of producing surplus-value (and this consciousness is not simple false consciousness but the fetishized view from the inside of the system) _in reality_ this interest is a redistributed part of the social surplus-value produced via the exploitation of labor. in pen-l solidarity, Jim Devine BITNET: jndf@lmuacadINTERNET: [EMAIL PROTECTED] Econ. Dept., Loyola Marymount Univ., Los Angeles, CA 90045-2699 USA 310/338-2948 (off); 310/202-6546 (hm); FAX: 310/338-1950
RE: more on M - M' (was Marx on interest
Hello, My name is David Brennan and I'm currently working on some of the hot interest rate and value theory issues. I am responding to the conversations in general and not to any one person. I feel that by separating the class and non-class aspects og finance and debt will greatly clear up some of the issues. For example, if we define class processes by their relationship to surplus value then the class prcesses become clearer. The subsumed class (possibly financiers) is only engaged in a class process if the interest paid to them is infact a distribution of SV. Interest paid by consumers or interest paid through Ponzi deals are not distributions of SV and hence the group of institutions which provide the debt are engaged in non-class processes. The integration of non-class and class processes in finance provides a valuable tool in terms of understanding not only interest rates but also crisis. It is true that the financiers are fighting over their share of SV. However, they are also engaged in non-class struggles which are not linked to SV. For example, in Minsky's theorization of Ponzi financing debt is used primarily for paying past debt. Therefore, no SV was created and interest rates were very high with profits (SV) being very low. I think the problem that emerges in disscussing interest rates is that most people think it is a purely class process (M-P-M') or completely a non-clas s process (M-M'). It looks like both conceptions are needed to grasp the complexity of financial crisis.
Re: more on M - M' (was Marx on interest
In response to Steve Keen, Jim Devine writes: ... an individual may claim a share of societal surplus-value simply by lending and collecting interest (M -M') because behind the scenes is the exploitation of labor. Hmm. This seems to beg a question, namely that the existence of a circuit M--M' such that M' M is in fact *tantamount* to exploitation of labor, as can easily be shown. On this score I note that even Anwar Shaikh's _Palgrave_ definition of exploitation does not require direct coercion in production as a precondition. Also note Marx's comment in Volume III: "Usurer's capital has capital's mode of exploitation without its mode of production." Usury, of course, is just M--M', and Marx is here describing social relations prior to capitalism. If it is the latter, then Marx is contradicting his own theory: he's saying that one can earn interest, create surplus-value, simply by lending, following what W.W. Rostow termed "the magic of compound interest." Compounding has nothing directly to do with it, but note on this score Marx "contradicts" himself more than once--cf the above quote, as well as this beauty, courtesy of Mike Lebowitz, from the _Resultate_ : "[Usury] transforms its money into capital by extorting unpaid labor, surplus labor, from the immediate producer. But it does not intervene in the process of production itself" Reading the context of your quote, it looks like the former interpretation is accurate: immediately before, he says "Instead of the actual transformation of money into capital, we see here only form without content." I interpret this as saying that M - M' is a pale imitation of the actual production of surplus-value. Later he calls M - M' "the fetish form of capital and the conception of fetish capital" and "the meaningless form of capital." Hard to see how this interpretation is consistent with the above quotes, and with the fact that usury made all that money before capitalist production relationships were born. [How much money? Marx again, Volume III: "In the form of interest, the usurer can...swallow up *everything in excess of the producers' most essential means of subsistence*..." Pretty good for a pale imitation! This leads me to a question: Jim, how do you define [capitalist] exploitation--not its necessary conditions, its definition--and how do you think Marx defines it? Cheers, Gil [[EMAIL PROTECTED]]
