[OPE-L:7482] Re: Buying up and monopsony

[Gil Skillman <gskillman@xxxxxxxxxxxxxxxxx>]

John, you write


> Gil, thanks for stressing the
> narrowness of the monopsony explanation. However, what I wrote about the
> buyer-up was not intended to support such an approach.

Two passages in your initial post prompted me to raise the issue of
monopsony:

First:

"However, the diversification of demand and consequently of
production, along with the need to produce not for a local but for
various distant markets, historically made the producer increasingly
dependent on one merchant in particular, who would supply him with raw
materials and become thus BUYER-UP of the producer?s total
output." 

Question:  what can "increasingly dependent on one merchant in
particular" mean, if not that the merchant increasingly gains
monopsony power vis-a-vis the producer?  In a competitive market,
*whether or not* the merchant capitalist exercises control over the
production process, no producer would be dependent on any "one
merchant in particular", insofar as he or she could always elect to
change suppliers.  

Second:

"In this way the buyer-up in effect acquires control over the
production process of the individual producers, I.E. OF THEIR MEANS OF
PRODUCTION. It is he who decides the extent of output and its degree of
diversification as well as establishing the division of labor among the
separate producers who are under his control, according to productivity
criteria which he sets and changes in demand which he follows. The
buyer-up can now lower the prices of the commodities he purchases (buys
up) from direct producers to a level which yields for the producer an
income not higher than a worker?s wage."

The ability to raise or lower the price paid for the producers' labor is
a characteristic of monopsony power, not of the control of the production
process per se. In a purely competitive world, with or without control of
the production process by capitalists, attempts by any one capitalist to
lower the compensation paid to input suppliers would lead to a wholesale
exodus to otherwise identical competitors paying the market rate. 
This passage seems to me symptomatic of the confusion of logical
categories I spoke of in my previous post.  Control of the
production process, in the sense of directing and defining it, does not
of itself imply control over input prices, and the presence or absence of
monopsony power does not bear on capitalists' desire to control the
production process.

> I consider the buyer-up to be a
> hybrid historical figure who personifies the process of transition from
> handicraft to the developed capitalist manufacture. What is important
> according to my view, is not only the "monopsony relation" but
> also the division of labour imposed to the direct producers by the buyer
> up, the diversification of production on the buyer-up's command, the
> supply of raw materials to these direct producers, the emergence of the
> "middleman" who connects the local producers in the different
> regions of a dominion with the large scale buyer-up (seated in the export
> port or the commercial city) and who also "subjects" these
> producers to the new (capitalist) social relations not only economically,
> but also politically and ideologically. 

I agree that the buyer-up is involved with these things, but
"subjects" producers by what power?  Monopsony?  Or
something else?  Why can't producers ignore or rebuff the efforts of
any one buyer-up capitalist to "subject" them to these
relations?

> In the regions of the Ottoman
> empire where the Greek bourgeoisie-national revolution of 1821 broke out,
> this process had been going on for several decades, transforming the
> "ancien regime" not only economically (buyer-up, wage labour:
> manufactories, big merchant and ship-owner enterprises), but also
> politically (forms of political representation, dissolution of the
> asiatic-communal system of the empire, formation of revolutionary
> organisations) and ideologically (enlightenment and national idea). The
> middleman of the new era emerged out of the dignitary of the "ancien
> regime".

> Focusing on the economic level
> again, it is these overall relations which transform the artisans or
> farmers to a hybrid or informal form of piece-"wage labourer and
> proletarian", as Marx says: The transition from the feudal mode of
> production takes place in two different ways. The producer may become
> merchant and capitalist (...) Alternatively, however, the merchant may
> take direct control of production himself (...) This method (...) without
> revolutionizing the mode of production, it simply worsens the conditions
> of the direct producers, transforms them into mere 
> wage-labourers and proletarians (...) appropriating their surplus
> labour on the basis of the old mode of production (...) The merchant is
> the real capitalist and pockets the greater part of the surplus
> value (Marx 1991, [Kiii, Penguin edition] pp. 452-53). 

Yes, I agree (having quoted this passage often myself).  The issue
I'm raising concerns the logic of this transition.  I want to argue
that this reflects a shift in class conditions having to do with the
progressive expropriation of workers, *connected with* the inability of
capitalists (competitive or monopsonistic) to compel desired levels and
arrays of work effort solely by contractual means.  

Gil