Popularizing exploitation: Reconciling Marx's LTV with Ricardian-based LTVs?

[Die Neue Zeit]

http://www.cpgb.org.uk/worker2/index.php?action=viewarticle&article_id=1004005


Under industrial capitalism, however, surplus value derives from the surplus labour performed by workers who are forced to sell their ability to labour to a capitalist. By means of coercion direct producers have been separated from the means of production and as a result workers have to present themselves daily for hire. It is that or poverty and maybe even starvation. Yet on average workers sell their labour-power at a ‘fair’ market price. As sellers of a commodity - labour-power - they receive back its full worth. Wages buy the means of subsistence necessary for the reproduction of the worker as a wage-slave. Only as human beings are they robbed.

http://www.cpgb.org.uk/worker2/index.php?action=viewarticle&article_id=91759


As explained by Marx, on average workers are paid the real price for their labour-power according to the value of their work done.

My comment was this:


Really? Because there has been a real decline in the federal minimum wage in the US, for example, how do less skilled workers receive back the "full worth" of their labour? How can the working poor specifically reproduce themselves when they have to dabble into expanding credit and debt - not to mention work additional jobs above the normal workweek - just to survive?

Someone else then said this to me:


I said that what they were saying was quite orthodox. Marx makes the ‘generous assumption’ that workers are paid full value of their labour power. Of course at times this is not the case, what he was concerned to show was that even if it were true, exploitation would still occur.

Given this distinction between "generous assumption" and statement of fact, I'd like to see some reconciliation between Marx's LTV and Ricardian and Ricardian-based LTVs.

The basis for LTV in classical economics was explained by someone blogging at Daily Kos. She (yes, a woman) has these:

http://ny-brit-expat.dailykos.com/

In particular:

http://www.dailykos.com/story/2009/5/28/736259/-Classical-Economics:-Thompson-and-the-case-for-Cooperativism


This leads us to the minimum level of profits. If production is successful and you realise the surplus product, then the base level of profits is literally the rate of interest; instead of keeping your money in the bank and earning interest, you entered production. Given guaranteed realisation, we have to add these other components which will give us the minimum rate of profits that is the replacement of capital used up in the production process and covering the depreciation of fixed capital.

Our minimum wage (maximum profit) is the subsistence level of wages (this means that the workers do not obtain a part of the increased growth of society as compared to the last production period. Our maximum wage (minimum profit) is the whole product minus that part that covers the base rate of interest and the replacement of capital used up in production and which covers depreciation; this allows for no new growth in investment by the current capitalists (but this does not prevent workers from using it for the purposes of production and that is an important point for a socialist and believer in the co-operative movement.

Furthermore, I would venture that parts of the Ricardian and Ricardian-based LTVs assert one case of exploitation when there is no globalized and upward equal standard of living for equal work (which ironically would make a dent against Ricardo's comparative advantage assumption of capital immobility).

In essence, for purposes of political economy and popularization, state that many types of exploitation are asserted already within the Ricardian and Ricardian-based LTV frameworks, and then switch over to Marx under their best-case scenarios.

Thoughts?

[Zanthorus]

Well, if we're going to be forming parties with 'market socialists' and 'radical bourgeois socialists' I supposed it makes sense that we would also take on their rhetoric.

[Die Neue Zeit]

I wasn't going that far, though that was a possibility. Even on the level of united fronts in the Marx sense would qualify. The immediate aspect is in the unionization thread, the bargaining power on either side between the two extreme ends.

Anyway, those two paragraphs could jive with something like, say, the Fundamental Marxian Theorem (http://www.revleft.com/vb/transformation-problem-t142597/index.html?p=1891032) of no profitability without exploitation, already implicit in the "minimum profit" definition above of covering the base rate of interest (i.e., why finance is prioritized over "new growth in investment" as simple as buying better machines, thus in fact becoming just another form of economic rent).

[Zanthorus]

First of all, my original comment in this thread was intended to be sarcastic.

And writing seriously for a moment, the assumption that labour-power is sold at it's full value is not merely a 'generous assumption' that Marx made of the cuff, it is merely part and parcel of the general assumption made in Volume I that all goods sell at their values ("Despite the important part which this method [of paying wages below the value of labour-power] plays in actual practice, we are excluded from considering it in this place, by our assumption, that all commodities, including labour-power, are bought and sold at their full value."). As such, it is only intended to be a part of the preliminary stage of analysis which is shed off in the course of the three Volumes as we proceed from capital's underly essence to it's appearance and day to day manifestations (Or to put in another way, as we proceed from the abstract to the concrete). I'm not really sure what you're trying to do here but it seems to me like you're just vying for an unnecessary excuse to meld Marx with some forms of bourgeois economics. Perhaps you need to sit down and read Paul Mattick's Marxism - Last Refuge of the Bourgeoisie?.

[Die Neue Zeit]

I read parts of that book. It's supposed to be a critique of Academic Marxism. The key word in my thread title is "popularizing," as in "Populist Front." There are populist fronts with regards to political organization, and there are populist fronts with regards to "economics" (and even political economy) - with big targets painted on the collective back of neoclassical, Austrian, and Bastard Keynesian economics.

I bet that even Steve Keen, for all his mumblings about "commodities theory of value," doesn't realize that there's a theory of exploitation somewhere in the "commodities theory of value."

[Hoipolloi Cassidy]

The basis for LTV in classical economics was explained by someone blogging at Daily Kos. She (yes, a woman) has these:

http://ny-brit-expat.dailykos.com/

In particular:

http://www.dailykos.com/story/2009/5/28/736259/-Classical-Economics:-Thompson-and-the-case-for-Cooperativism


Thoughts?


NY-Brit-Expat asked me to post the following response:


You need to separate Ricardian from Ricardian socialist ... that was William Thompson's argument on distribution. Ricardo's labour theory of value doesn't hold; the marxian one can be fixed to work as there are solutions to the transformation problem that retain or make redundant the labour theory of value. The important thing is devising an explanation of exploitation deriving from production which was Marx's advance over the Ricardian socialists where exploitation was manifested in the distributive process (also the same could be said of Marx, except in marx you have an idea of of labour working hours above and beyond what is necessary to ensure their subsistence and reproduction and for the production of surplus value); this argument is implied in the distributional argument of the Ricardian socialists as workers do not receive the value that their labour creates).Cordially, for the Anti-Capitalist Meetup (Meets Sundays, 6:00 EST at Dailykos.com)

[Die Neue Zeit]

It's interesting she wrote this recently:


I have an alternative perspective which is a combination of Classical/Marxian/Sraffian and post-Keynesian.