Ongoing Argument over Exchange Value

["Donal" <donaloc@xxxxxxxxxxxxxx>]

donal: In regard to inequality of
information and the recent awarding of the Nobel prize - that was discussed
on this list (at the time) and was related to theories around asymmetric
information (a much more global concept than the one you are referring to).
As such, it was an attempt to respond to the criticism which  -
the inability to manage massive quantities of information.


d.l.:  "Asymmetric information" was a thoroughly capitalist
theory which may have been intended to undermine some argument about command
economies (that's really not very important to capitalists these days) but
it's main political purpose (which I detect and renounce) is to be a
stalking horse.  The capitalist theorist was very much on target in his
economic analysis but the political intent was to portray the intrinsic
inequalities in the capitalist marketplace as "natural" and irreducible in
any system.  The political argument is rubbish.

donal: For a start, I stated that the theory 'attempted to
undermine the possibility of state-ownership of the means of production'. As
I believe we both clearly disregard the political undercurrent, we'll just
stop discussing it. As far as it's content is concerned, I agree that it has
some basis in fact (however, the recent Nobel prize was awarded to someone
who has undermined it, or more accurately conditioned its validity). Your
original point here has been assidiously scrubbed from the record.

To re-assert your mistake:

d.l. >As far as I can see the source of profit is the capitalist buying his
>supplies in one market and selling his product into another.  It is the
>classic source of profit: inequality of information and liquidity.

To defend this you said that theories around the subject of information
equality were current within modern economic analysis and used the Nobel
prize as an example. In effect, your argument states that all profit is
derived from trading - that this is nonsense is patently obvious. No
understanding of the exploitation of labour is possible here. You have
assumed the vulgar economics of the bourgeoisie.

donal(prev): Contrary to your alluded connection, what your argument is
based upon
is the basis of profit within trading systems - a form of (generally)
non-productive economic activity. This occurs within the superstructure of
the modern capitalist system and pays the wages of traders of commodities.
Such trade does make colossal profits (totally undeserved) yet, it is not
the single manner of obtaining profit. A good example of a profitable
enterprise is crime, appropriation of property, etc. To say that this alone
constitutes the source of profit is to misunderstand the central role of the
expropriation of surplus value from the producer.

d.l.:  You accept the idea of equality in the capitalist marketplace and
then tell me I don't understand expropriation.

donal: What you mean here is beyond me. I didn't mention equality - I don't
understand your reference here at all. As for you not understanding
expropriation the line below: 'Profit is
not based on production, it's based on distribution.' says it all. If profit
is not based on production, then there would be no profit-generated
inclination to urge capitalists to expropriate additional surplus-value.
Because surplus-value (or in your terms, profit) would not be generated
until distribution. You are basically stating the neo-liberal line here, you
just have replaced 'the market' with 'the capitalist'. Your whole analysis
doesn't allow for any evaluation of the worker being exploited - that's why
(IMO) Marx started with an evaluation of value (not use-value) as it allows
an analysis in which the worker is producing above that which he is getting
paid.

 Capitalist don't just
"trade".  That's like saying that casino operators just "gamble".  Profit is
not based on production, it's based on distribution.  Capitalists create
little kingdoms of market advantage.  But you contend that:

        "...these are not 'the source of profit'. For
a marxist you are starting with the superstructure without considering the
base of more fundamental economic relationships. That these forms of profit
are unacceptible will be broadly supported by all manner of social
democrats. I must add that these profits made by traders are (fundamentally)
composed of accumulated surplus-value. The sort of information insight you
refer to is that one large car company could take over another, downsize and
make a killing. The trader will take a good cut for his work in this regard.
However, the machinery which will replace the worker has been bought through
historic surplus-value as generated by human labour. That's why Phil
maintains that *fundamentally* surplus-value is the origin of all profit and
material wealth."

dl: I've never accepted the argument that changes in the superstructure
don't
matter.  It's rubbish.

donal: Neither do I, you should read what I write, not what you think I
write.

dl: The social relations of production are mediated
through technology.  Change technology and you can tip the balance to a new
system.

Whether we have entered a new system or not is a different question to that
of whether 'all profits come from trading/distributive activities'. We could
discuss this if you could get your head around the LTV.

dl: Obviously the class structure is due to our different relationship
to the means of production.  I don't throw the baby out with the bath water.
I accept, indeed contend, that the profit a capitalist receives is due to
his position of advantage within the system, not his "work".  If one wants
to use "surplus labor" as a shorthand, fine, but not as an equation.  As
equation it leads to one spurious conclusion after another.

You have succeeded in making a statement so bland and vacuous that I can't
disagree with it.

dlaw: If commodities were compared on the labor they had in common, they
would be
treated like it.  Instead, they are treated like they are compared by the
usefulness they do not all have in common.

donal: How can anyone who has read Chapter 1 of Capital say this. This is
abc. Perhaps I could enjoin you to our study group on Capital (see below).
And you call yourself a Marxist?

d.l.: I've read it and accepted the principles, then tossed out the
self-confounding bits and thought long and hard how to resolve the whole
thing.  In the end it's simple.

If you reject the theory of value, you are left with little other than some
general theory of dialectics. The theory of value lies at the basis of the
marxist analysis. It gives a rational (other than envy) to workers struggle.
If you honestly believe that all profits come from trading or distribution -
then you must see that the worker is only disadvantaged by not being rich
enough to participate fully in this, that there is no exploitation.

dlaw: Are you contending that the person consuming his or her own
product judges it on the basis of labor or usefulness?  If I make a really
bad stew and a really good pie, won't I treat them differently?

Again you confuse use-value (how you treat the objects) with value (socially
determined) as determined by exchange.

d.l. - Your argument exemplifies the inevitable absurdities of labor value
based on "reproduction".  If Robinson Crusoe takes two days to build a hut
that leaks and topples over and one day to make clothes that keep him warm,
he'll burn the hut to dry his clothes.

Yes, does this undermine the value of the product in terms of time taken to
produce, no. Robinson Crusoe should be aggravated in proportion to the value
of the time he put into the work.

dl: Your system necessitates that all goods assume an idealized value.

Now you confuse value (as an indicator of snlt) with price.

dl: It doesn't
 happen that way, obviously.  If natives come along and, with their advanced
skills, build a sound hut in 4 hours, Crusoe won't give them two days of
work
for it because it didn't take them two days, but he might give them a day
and
a half and think it a bargain.

Indeed, the snlt required to produce the article would then have dropped to
4 hours! As such, to give them such a price, Mr Crusoe is being exploited by
his technological backwardness. You have introduced external modes of
production - this complicates the very simple situation which Phil created
to explain value, but it doesn't mean that the theory can't withstand this
complication - just that it needs to get more intelligent and more detailed.

dl: Neither will he give them four hours of work.
The natives, with their asymmetric knowledge, will demand more - bloody
capitalists.

Capital and trade are two very different (but intertwined things). I
honestly can't believe you have read Capital. The natives here are con-men
but they're not capitalists.

donal: Now that's not to say that the commodity doesn't have any use-value,
it has such by its very material nature - it's a shoe or bad pie and
valuable (or not) to us by that as a material entity alone. The combination
of these two forms of value is where you appear to be confused - both are
necessary to comprehend the nature of the commodity.

d.l. - This is fluff.  Either labor has intrinsic value or it hasn't.

What you mean by intrinsic value is anybodies guess. If I knew I might
answer you.

dl:You say the use-value and "material nature" of a good are the same and I
accept
it, of course.

You seem to understand the more simple form of use-value.

dl: Your argument for this other, chimerical, value doesn't hold
up.

So you say, let's read your argument.

dl:  You NEVER prefer a bad stew to a good pie because it took longer to
make.

You take my 'chimerical' value (which is socially determined) and then treat
it as if it's a property of the object itself. What an argument to refute
'value'!

In response to my example about water you write:

donal: NO. Use-value is a measure of the physical usefulness of a commodity.
Value (as determined by exchange-values) is determined by the snlt necessary
to produce the commodity. As for vanishingly small amounts of labour - to
tighten water supply would require significant snlt

d.l. - Donal, lad, c'mon.  To tighten the water supply you need less rain.

As far as your example goes (which is not a great one to discuss); you have
forgotten your original argument which was that if the water supply was
stopped (you indicated with vanishingly small amounts of labour - not some
natural phenomenon) the cost of water would increase. As such, like every
good supply-demand economist you missed the fundamental by looking at
'appearance-only' reality. The exchange-value of water would be determined
by the snlt necessary to bring it to a water-short area - greater than that
in areas of aqua-abundence. As such, the exchange value would be higher.

The main problem with your position is that the LTV can do everything your
supply-demand dichotomy can - but also allows for a serious analysis of
exploitation of the working-class. Something which supply-demand never can
approach. You may not appreciate that LTV has this power, this stems from
the very complicated definition of snlt - which incorporates supply-demand
variations through their impact on the labour required to produce/obtain an
article.

d.l. -  You can't say that price fluctuates above and below "value" and
assume it unless you can tell me what constitutes value.  I say value is the
longer-term ranking of a good in a basket of goods which the shorter term,
local and situational price rises and falls about.  You say there is some
sort of Socratic value ideal based on labor but can't demonstrate it.

If you're looking for a definition of value - you'll not get one. It is a
historically-determined concept and requires a dialectical explanation. If
you assume that it is determined by a comparison of the snlt required to
produce commodities, you won't go too far wrong. Price is determined by
locally available supply against demand, as such it is different to value.
As such to assume it was always lower, always greater or precisely the same
as this socially-determined value would require a proof. Since such is not
forthcoming, we must assume that it fluctuates about value. I may prove this
in the next email.

dl: All you do (because it's all anyone can do) to keep the weird SNLT
notion
afloat is to stipulate some difference between "social necessity" and
need/usefulness as demonstrated in the marketplace.  There are superficial
differences but it's a bogus distinction.

Question: How is need/usefulness demonstrated in the marketplace? Is
something valued in proportion to its usefulness?? If so, how can you
explain mass-production of highly useful commodities - you will have to
retreat to supply-demand, then where's your argument lie?

SNLT remains a potent weapon to analyse the nature of capitalist modes of
production. You have shown no alternative. Your point on longer-term ranking
of goods in a basket of commodities has potential - yet, you don't try to
explain it. Why? Because the best explanation of such long-term trends come
from the LTV.

Domhnall.



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