[PEN-L:4834] Marx on subsumption and exploitation, Pt. 3

[GSKILLMAN@xxxxxxxxxxxxxxxxx]

Third and final question:

If exploitation in the cases considered previously did not in fact
require formal subsumption in either Marx's or Jim's sense of the
term, did they instead require the existence of monopoly power in a
sense distinct from Roemer's?

In particular, did exploitation in these cases require *individual*
market (i.e, price-setting) power, as opposed to *class*
monopolization of productive assets, as in Roemer's account?

Jim insists that it did:

> As Marx notes above, in Ch. 36 [on usury capital] he's talking
> about an era when commodity production was incompletely
> developed...That is, markets, including money markets, are
> incompletely developed--so the usurer is likely a monopolist unlike
> the money-lender in the "credit system." *This gives the usurer
> power over the borrower that the Roemerian rentier lacks*....
> In all of these cases, there's a kind of "precapitalist subjection
> of labor"....This seems a likely substitute for formal subjection of
>labor by capital as a way of getting peasants to produce a surplus-
> product and to share it with the money-lender. *It is _not_ an
> example of the Roemerian rentier*.  [Emphases added]

Putting aside the historical basis for Jim's claims, which I
challenge in my Econ & Phil paper, is there a basis in Marx for these
conclusions?  I agree here with Jim that Marx offers some leeway for
interpretation in Jim's direction; see in particular the passage on
p. 510 of the GRUNDRISSE.

However, in *no* case do we find Marx insisting on the necessity of
monopoly power in Jim's more exacting sense of individual monopoly or
monopsony (i.e., price-setting) power.  To the contrary, Marx can at
least as easily be read as presuming only the same sort of
conditions as Roemer--i.e., class monopolization of a relatively
scarce productive asset.  Furthermore, Jim's new definition of
"subjection" here is yet another departure from Marx's usage--Marx
doesn't employ the term in this sense.

Finally--and this is the kicker--monopoly power in Jim's sense
*can't* be coherently understood as a substitute for formal
subsumption in Marx's sense of the term, because this sort of market
power is not strategically responsive to the sorts of asymmetric-
information based market failures which make formal subsumption (in
Marx's sense) relevant.  Jim's articles with Gary Dymski show that he
is well aware of the strategic nature of these imperfections.

Thus Jim's argument here faces a rather severe dilemma--either class
monopolization in Roemer's sense is sufficient for exploiting labor
(which I believe to be the most accurate reading of Marx's position
on exploitation in the era prior to capitalist production),
contradicting Jim's claim, or else mere price-setting power is
insufficient to yield such exploitation--again contradicting Jim's
claim.

But now to the main point.  Does Marx ever insist on the necessity of
individual monopoly power, understood in Jim's sense, for the
existence of pre-capitalist exploitation?  I don't see where he does.
 Indeed, Marx begins Chapter 36 with the statement that "Usurer's
capital requires nothing more for its existence that that at least a
portion of the products is transformed into commodities and that
money in its various functions develops concurrently with trade in
commodities." [p. 728]

Where Marx does mention monopoly in the chapter, he refers to the
monopoly of "usury", i.e a class monopoly, not a monopoly of
usur*ers*. (p. 737)  Parallel readings for the conditions of
exploitation via ground-rent can be found in Vol. III, pp. 762-63,
772.

But this interpretation is equivalent to Roemer's understanding of
the basis for exploitation in his "Capital Market Island" scenario.

Moreover, in none of the passages I cite in my previous post does
Marx insist on the necessity of monopoly in Jim's sense.

Let's take this a step further.  How could it possibly be the case
the class monopolization of a relatively scarce productive resource,
as in Roemer's analysis, is *not* sufficient for expropriating
surplus value?  The only answer (since Roemer's results are
consistent with rational optimizing behavior in complete markets) is
that markets are somehow incomplete, e.g., characterized by
asymmetric information about production and labor effort, so that the
labor-labor power distinction matters in a strategic sense.
First, as I argue in my article, such incompleteness does not
generally render class monopolization powerless to yield surplus
value.  But if it did (an extreme case of informational problems),
mere monopoly power in Jim's sense in insufficient to solve the
problem if class monopolization is; I know of no models which prove
the contrary.

Thus I don't see a basis in Marx, or in modern theory, or in the
historical record, for Jim's conclusion on this score.

That's all, folks.   Gil Skillman