Is present capital the result of past labor?

[RadioRaheem84]

Marx's analysis concerned the contributions and rewards of people- classes - not impersonal inputs. Yet even within this context he did not succeed either logically or empirically, in establishing that present capital is simply the result of past labor. All that he did was to push back into the past, key questions of the source of capital. That way leades to infinite regress, not evidence or proof. Nor is the question of the origin of capital a purely historical question. It is an an analytical question concerning the ongoing sources of capital.

- Thomas Sowell, Marxism


Do you think that Sowell misunderstand Marx's understanding of the origin of capital? I was under the impression that Marx was simply stating that ownership doesn't entail value and that all the capitalist does is transfer one value with another; cash for a factory and this is cyclical. It doesn't matter if that person worked his whole life to save up to buy a factory or a small business, he is merely using one form of value to purchase another form of vaule (therefore transfering value not creating it). But I think Sowell interprets Marx's claim that he quotes, "only the dodge of every conquerer whole buys money from the conquered with the money he has robbed them of", to mean the initial source of capital stems from a transfer of one class (the feudal class, monarch) to the beourgouise. What is he trying to say here?

[RadioRaheem84]

The follow up paragraph is even stranger:



Once output is seen as a function of numerous inputs, and the inputs as supplied by more than one class of people, the notion that surplus value arises from labor become plainly arbitrary and unsupported. Factually it is even worse off. The empirical implication of a special or exclusive productivity of labor would be that countries that work longer and harder would have higher outputs and higher standard of living. But the reality is more nearly the direct opposite - that countries whose inputs are less labor and more entrepreneurship tend to have higher standards of living, including shorter hours for their workers.

[Die Neue Zeit]

Here's my shot:

Inputs are less labour? Including shorter hours for their workers? Yeah, that is bizarre, considering there's a boom in unproductive labour.

The answer is a tad more complex than Sowell imagines.

First off, the process M-C-M' has existed ever since the dawn of petty commodity production, whether it takes on the form of slave production, "Asiatic" forms, or Euro-Japanese feudalism. Here the merchants have contributed their own labour towards enriching their money-capital balances.

Next, there's what's called primitive accumulation. I don't see how the subsequent capital formation could have resulted from anything else but the labour of those dispossessed.

As for today, there's the distinction between real capital and fictitious capital. I don't know if Sowell had in mind derivatves and such as part of what he thought "capital" was, because certainly the value of those derivatives aren't a result of past labour.

[anticap]

Marx ... did not succeed either logically or empirically, in establishing that present capital is simply the result of past labor.

What, then? Fairies? Magic? Even then, it would be the labor of fairies and magicians.


All that he did was to push back into the past, key questions of the source of capital.

Well, sure. The point is that no matter how far back you go, the inputs reduce to labor.


Once output is seen as a function of numerous inputs, and the inputs as supplied by more than one class of people

Which? The working class, and...? He's implying that capitalists do work. The whole point is that they don't.


The empirical implication of a special or exclusive productivity of labor would be that countries that work longer and harder would have higher outputs and higher standard of living.

All else being equal, they would.


But the reality is more nearly the direct opposite - that countries whose inputs are less labor and more entrepreneurship

Notice how he conflates "capitalist" with "entrepreneur." This ought to raise alarm bells whenever you see it. The two are not (necessarily) the same. They might be (a capitalist might come up with a clever idea); but in general capitalists merely bankroll entrepreneurs.


tend to have higher standards of living

Firstly, that doesn't justify a system. Slaves in 1850 were better off than in 1750, but that doesn't justify slavery. I think Chomsky uses that example here (if not, it's a good video anyway):

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Secondly, for whom?


including shorter hours for their workers.

That's the promise and the hope, isn't it? Except that it doesn't work that way; in reality (http://www.rdwolff.com/content/capitalism-hits-fan-movie), capitalists go on demanding the same amount (or more) labor, and pocket the increased profits, while workers' wages stagnate and debt-economies are born to compensate.

If it were actually working the way he describes, then the world might look a bit more like Bucky Fuller's vision (http://en.wikiquote.org/wiki/Buckminster_Fuller):


We must do away with the absolutely specious notion that everybody has to earn a living. It is a fact today that one in ten thousand of us can make a technological breakthrough capable of supporting all the rest. The youth of today are absolutely right in recognizing this nonsense of earning a living. We keep inventing jobs because of this false idea that everybody has to be employed at some kind of drudgery because, according to Malthusian-Darwinian theory, he must justify his right to exist. So we have inspectors of inspectors and people making instruments for inspectors to inspect inspectors. The true business of people should be to go back to school and think about whatever it was they were thinking about before somebody came along and told them they had to earn a living.