Do machines produce surplus value?
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ALB wrote:robbo203 wrote:He would probably say that even with relatively labour intensive businesses, machines still add value to the product as opposed to simply transfer the value congealed in them over the lifetime of the machine.
But does Keen actually say this? And does he say that it is only machines that add surplus value and not the other elements of Marx's constant capital (academic economics's "non-labour inputs")? If so, why does he exclude buildings, raw materials and power from creating surplus value too? Or does he accept the concept of "constant capital" but wants to narrow it to exclude machines? If so, again why?I'm a bit surprised that, as an academic economist even if one who wants to make a name for himself as a bit of an unorthpdox one, he has any use for the concept of "value" at all and doesn't want to try to analyse the capitalist economy in terms of price only.(which the so-called "transformation problem" is basically all about).
Adam,Im not too sure whether Keen makes a distinction between machinery and other elements of constant capital. That would be an interesting line of enquiry to pursue precisely because of the embodied labour content of machines. I haven't read enough of the guy to give you an informed opinion but it could be an Achilles Heel in his argument What I can say is that he:1) rejects the labour theory of value on grounds of its "unjustified asymmetrical treatment of the labor and non-labor inputs to production" (http://keenomics.s3.amazonaws.com/debtdeflation_media/papers/Keen1993UseValueDemiseLabourTheoryValue_JHET15pp107-121.pdf) 2) that he subscribes to the "surplus appropriation" school of thought, which means that he considers workers are still exploited – despite his rejection of the LTV. As such, this puts him in the same boat as some "Analytical Marxists" like G A Cohen who argue that you dont need the LTV to show that workers are exploited Why doesnt the SPGB invite Keen along to a debate or discussion? I think he is based in London but I might be mistaken
He's actually based in the Kingston University which falls within the area of West London branch, so we could contact him. What, a debate on "Is the Labour Theory of Value" valid?
ALB wrote:He's actually based in the Kingston University which falls within the area of West London branch, so we could contact him. What, a debate on "Is the Labour Theory of Value" valid?Hmm. You might find a title like that for a debate a little too dry and abstract to attract any but the most hardened enthusiasts although I could be wrong. Keen is quite well known in certain circles , I even have a work acquaintance here in Spain who installed my solar panel who is quite ..er.. keen on him (sorry, couldn't resist that). Maybe a more generalised title like "The Economics of Capitalism – is Marxism still relevant? Just a thought. I would advise, though, to gem up on where he specifically stands within the spectrum of heterodox economic theory. I don't know enough about his writings to quite place him except to say that he regards himself as a post Keynesian sympathetic to some aspects of Marx's thought and critical of neoclassical economics. . His book Debunking Economics is a must-read (and I haven't read it yet) and of course there is ton of stuff you can get on the internet by googling Keen
Premature, if you haven’t read him…***On value theory, Keen is a Sraffian [named after the Italian-born Cambridge economist Piero Sraffa] who holds that Marxian value theory is incoherent.Sraffian economics (or neo-Ricardian economics) treat value and price as independent variables in a market-wide system of input–output equations, with actual physical quantities as numerical coefficients. The input–output equations encapsulate Sraffa’s physical standpoint: the production of commodities by commodities.The Sraffian physical market is cleared simultaneously—i.e. by solving its simultaneous equations to determine value and price. Because value and price are independent variables, solutions for value and exploitation also turn out to be independent of price and profit—Sraffian solutions can produce surplus value that is negative while profit is positive—i.e. Marxian value theory is proven to be incoherent.In the Sraffian context, Keen raises the issue of machinery and animal labour as variable capital rather than constant capital. Read Keen’s Debunking Economics.The Marxian answer to Sraffa’s simultaneous dual-system “demolition of Marx” is supplied by Kliman’s temporal single-system. Read Kliman’s Reclaiming Marx’s Capital.***Although Keen scorns and mercilessly mocks Marx’s value theory, he esteems Marx’s dynamic reproduction schemas.In modeling capitalist circulation, Keen is a Minskyan. He has developed, with technical assistance, powerful dynamic cyclic reproduction modelling software.***These are technical issues that beg technical demolition.
YMS’s two premises are the foundation of Capital.They find their summary in the equality formula for the exchange of value for equal value, with money as a medium of exchange C — M — C′The fundamental problem that Capital Vol. 1 addresses is how to explain surplus value upon this foundation of equality of exchange.Marx’s solution is that, in a social system [capitalism] in which exchange of commodities by C — M — C′ already obtained and in which the means of social production are now privately owned and privately controlled, this foundation of equality of exchange becomes the foundation for its opposite—inequality of exchange—exploitation.Inequality of exchange finds its gloss in the formula for capital M — C — M′That is the foundation of the rest of Capital.
Yes, Keen abandons value and sticks with price.Sraffa developed his ‘Production of Commodities by Means of Commodities’ [1960] as a stick to beat marginalism, but it backfired against Marx, as was soon widely discovered, e.g., by Samuelson to his glee, and by Meek (celebrated author of ‘Studies in the Labour Theory of Value’) to his chagrin.Sraffa wrote perceptibly enough in 1927…“The labour theory of value was devised by Ricardo as a stick to beat the [class of] landlords.”“But later, having been adopted by Marx to beat the [class of] capitalists, it was necessary for the defenders of the present system to devise a new theory, the [marginal] utility theory of value.”…“As to Marx, the fact that the [marginal] utility theory of value had been found several times before (by Dupuit, Gossen) and had fallen flat, while when it was again almost simultaneously published by Jevons, Menger and Walras in the years immediately following the publication of Vol. I of Capital, found suddenly a large body of opinion prepared to accept it, is significant enough.”
robbo203 wrote:His book Debunking Economics is a must-read (and I haven't read it yet)I have read it and it's a waste of time:http://www.worldsocialism.org/spgb/socialist-standard/2000s/2003/no-1182-february-2003/book-reviewsLew
Lew wrote:robbo203 wrote:His book Debunking Economics is a must-read (and I haven't read it yet)I have read it and it's a waste of time:http://www.worldsocialism.org/spgb/socialist-standard/2000s/2003/no-1182-february-2003/book-reviewsLew
Lew, What I mean is it is a "must-read" if you are going to debate with the guy. Its his main book, innit? I can't comment on its worth, mind you , as I haven't read it but I am to at some point …..
twc wrote:In the Sraffian context, Keen raises the issue of machinery and animal labour as variable capital rather than constant capital. Read Keen’s Debunking Economics.How does he classify pristine raw materials in that case?
A capitalist builder builds a building, sells it to an investor at it value and makes a profit by paying the worker class builders less value than they created; and exits all further interest in the economic future of the building. The investor or owner of the building or whatever has something worth say 200K? He wants a similar return or income stream on that equivalent to what he could get elsewhere from buying an income stream (surplus value) from shares in any other productive manufacturing that extracts surplus value by employing labour. Even a building firm perhaps? Some more fortunate workers do it; hacked of with 1% interest on their savings they buy to let. Then we need to look at the working class renters. One way of looking at it; from the workers perspective. [It just makes things simpler and more transparent at this stage to assume that the workers who are paying rent get paid the full value of their 40 hours a week labour time; they could even be simple commodity producers like Silas Marner I suppose.] Imagine we have a couple both earning 1K a month or producing 1K each of stuff and getting the full value back. And the Rent is 1K a month. Then one of them is doing the necessary labour time for both of them to keep the bodies and souls together etc. And the other is doing 40 hours surplus labour time to just to pay the rent. Which for the rentier is the average rate of ‘profit’ on an investment. From a capitalists perspective. If the renters are manufacturing productive wage slaves then if his workers didn’t have to the pay rent then he could cut their wages in half and only pay them both the necessary labour time, 1K a month, and take the difference as his “extra” surplus value. Although he might argue that that was his surplus value in the first place and the renters were capturing or clawing back the surplus value generated by his manufacturing workers. [Again assuming that the workers who are paying rent get paid the full value of their 40 hours a week labour time.] His workers are producing 2K of stuff a month, can survive on 1K of it and the other 1 K of it should be his as it is him that makes it work. That is probably more like the real situation the capital building investors are ‘capturing’ the source of surplus value from the general commodity producing manufacturing sphere of production. I mean with wanting intellectualise things this is the ‘dialectical’ method of analysis. It doesn’t have to be one ‘absolute’ thing or another it is nearly always a composite or fusion of different things. You make an idealised abstraction or model and then another and then see how they intertwine in reality. In fact I think generally it is a increasing modus operandi of the finance capitalist to capture surplus value from the manufacturing class by getting the workers into debt. Karl did a short passage on it under debt peonage and said the manufacturing Capitalist didn’t like it; anymore that the capitalists is the US didn’t like having to pay their ‘hiring out’ proper slaves working as wage slaves extra so they could pay their owners the rent premium. I read an essay by the Reaganite Paul Craig Roberts recently in which he praised Karl’s take on this in from Volume III das Capital. I thought Paul Craig Roberts interpretation was reasonable and informed; he seemed to understand it.
We are surrounded by dead labour. The only one able to add social value is the human being. Those are intellectuals who want to eliminate the ltv
Karl started off with; C – M – C But actually it assumes the law of value and that stuff exchanges at its value. So it is; C(200) – M(200) – C(200) So Silas goes off to the market with his linen with 200 hours of labour time in it and sells it for gold with 200 hours of labour time in it and buys a coat and bible 200 hours of labour time in them. And returns home. And so does everyone else and no one gets rich. Actually this is a bit spurious as equally you could have; M(200) – C(200) – M(200). But who would take money and buy something only to sell it at the same money value? Whilst; C(200) – M(200) – C(200) Has a social function as it is an exchange of use values ie linen for a coat etc Not only that in capitalism you actually have; M(200) – C(200) – M(220). What you need to understand is the ‘-‘ means the law of value is supposed to be operating. So you have two choices. Either there is something ‘wrong’ or incomplete with; M(200) – C(200) Or C(200) – M(220). It can be resolved by looking at ; C(200) – M(220) By; M(200) – C(200)….C(220) – M(220). The ‘-‘ predicate is then not broken with a new concept ; C(200)….C(220) ie the commodity labour power C(200) expanding itself into C(220).
robbo203 wrote:How does [Keen] classify pristine raw materials?Pristine inputs, like air, have no Marxian value. They are not products of human labour, i.e. they are freely consumed in production but they are not produced by production. Recall that Marxian production is the production of surplus value.Consequently, pristine inputs are rationally ignored as value-less ingredients, even though they are physically necessary ingredients for production to proceed. They do not enter Marxian input–output value equations.You’d have to check Debunking Economics to see if Keen also [rationally] ignores pristine inputs in his Sraffian economy.On the other hand, it is remotely possible that his Sraffian economy may treat pristine inputs in the same way as it treats all other inputs—as variable capital.Variable-capital inputs may continue to be productively consumed/used [even long] after they have reproduced their own maintenance cost. Consequently, pristine raw materials (considered as variable capital) will always contribute toward profit since they take absolutely no time to reproduce their own [zero] maintenance.Again, you’d have to check if he treats them as such, i.e. as actual inputs, on equal par with machinery and possibly working animals.If he doesn’t you’d consider asking him why not, since these homeopathic inputs contribute miraculously to profit?
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