anwar shaikh, karl marx (lecture 7 – 10/12)

Four General Themes in Marx and Marxist Works

1. Laws of Motion –whether there's a necessary pattern, vs. whether there is conjunctural determination (discussed last week)

2. Competition vs. Monopoly – pivoting around the issues of concentration/centralization, and what they portend. For Marx, this intensifies competition, Shaikh is arguing. For 'Marxists' (Hilferding and Lenin), this weakens competition—this association of scale with lack of competition, Shaikh is suggesting, actually comes from neo-classical economics (via the importation of notion of 'perfect competition'--each firm has to be infinitesmal, thus effectively powerless). This would have been anathema to Marx, for whom capital is master and consumer subservient. It is the opposite, in neo-classical economics). Implication of the 'monopoly'argument, of course, is that the immediate solution is the restoration of competition. 'Power' becomes the regulator/destabilizer of capitalism.

3. Economic Crises – have to distinguish crises from cycles, and how we understand them. Necessary? As in falling rate of profit arguments, etc. Or, conjuncutral? A balance of things happening at any given time (here citing Lenin and Luxemburg's dismissal of Engel's presentation of the argument. Until Henryk Grossman, no one from the Marxist tradition really looked at the problem of the falling rate of profit.

4. The State—State as dominated by capitalism (limits imposed upon it) vs. State as autonomous (people focused on specific policies, Gov't sometimes stupid sometime smart)

Marx's Thoughts on Value

Smith and Ricardo begin with the distinction between use-value and exchange-value. Use-value, for them, is a social thing. Smith and Ricardo argue that the natural rice, of course, is regulated by its natural costs (direct and indirect labor time, secondary effect of capital-labor ratios). Law of relative price. They use the term value to mean exchangeable value, basically (different from big V value that Marx wants to discuss).

Marx begins by addressing something else. Smith and Ricardo don't tell you why things have value. Marx will say that a whole set of social relations undergird the fact that certain goods have value. The starting point is, in this sense, why are there commodities.

Commodities have a dual character: use- and exchange-value.

The Capitalist Mode of Production presents itself as an 'immense accumulation of commodities'

What is a commodity? [Shaikh using a two-column display, to go through 'use-value' and 'excange-vaue?]

Use-value is material with an effect that satisfies human wants (not all services count, though, even though it doesn't have to involve 'physical labor')

Unproductive/productive labor as a shaded discussion, when you get to the concrete (connects to the above discussion via the 'production of use values.' So types of labor mentioned here are distribution, guarding, administration – they don't produce use-values but produce an effect to facilitate smooth production of the use-values. [Interesting—transportation can be production labor, if it's part of the loop of production. But if it's part of the distribution process, or whatever else, we can it non-production labor.

In short, the purpose of this section of the lecture was to say that labor and use-values don't necessarily map-on.

1. properties that are relevant to it and its use-value (Oranges and their sweetness, etc.)

2. properties that are socially relevant (Oranges and pesticides, child labor, migrant labor, etc.)--these can become Category One, dependent on whether these properties are 'recognized'

Use-values are the product of what Marx will call concrete labor. The social division of concrete labor is central to the production of use-values (this is Adam Smith's theme, of course). Throughout human history, the institution that established this division of labor was not the market. And thus, exchange-value did not play a big role.

Well, what is exchange-value? Marx's first answer is that it arises only under particular circumstances. Smith makes it seem as if exchange-value emerges out of the propensity to truck and barter. In fact history shows us something quite different, which is that exchange typically only happened on the periphery of societies (where it did happen, as in under feudalism, it was highly regulated/restricted).

It is only the capitalist mode of production that makes trade central to the existence of the average individual. Important point is that this is a specific historical circumstance. Very recent, historically-speaking [Jared Diamond's metaphor of the 24-hr clock—agriculture comes in at ten minutes to midnight]

What does exchange do? It reduces qualitatively different use-values to a common aspect, according to which they can be quantitatively compared. This is a process of social abstraction. It only functions if it takes things that are not the same, and reduces them to some kind of sameness. Qualitative equalization of different use-values. Marx will jump on this—in other words, when you're exchanging two things, they share some property that allows them to be compared.

The question immediately arises. How can this be?

Marx is careful to say that standing behind the possibility of comparing two commodities is a history of social development. This is the sense in which the importance of labor costs to a theory of value is a historically specific feature of capitalism (he does have some account of a rude and early state, remember, which parallels Ricardo and Smith's claims).

Once we come to the point where you have regular exchange, it becomes clear that the process of exchange converts different use-values into common units: quantitative worth. These units may not exist as such, in the sense that they are visible, but they are implicit.

Using the analogy of weighing different objects in terms of a common object, in order to speak about how standards of measurement are relational. Weight as the relative amount of paper needed to arrive at equal mass as is embodied in an eraser.

Exchange-value is also a relation between two objects (between the object you use as a standard, and the object you are measuring).

The question Marx now wants to ask, of course, is what stands behind the comparison of exchange-values?

The same abstraction process that puts two use-values into a comparison also compares the labors which stand behind these use-values (that produce these use-values). In other words, the process abstracts which from the concrete qualities of the use-values also implicitly abstracts from the concrete qualities of the labor. So you get abstracted labor.

Abstract labor is the inner basis of exchange-value. He calls this VALUE—the quantity of abstract socially-necessary labor time required for the production of a commodity (for exchange).

Marx isn't yet saying the value regulates price. He's only saying that value stands behind exchange-value (we'll develop the relationship between these two, after doing the theory of money).

The two conditions here are commodities that can be reproduced (so no old paintings, old wines—like Ricardo), and under conditions of competition.

Note also, as we said, exchange requires a social matrix in which people have rights to dispose of commodities.