Positive profits with negative surplus value

[el_chavista]

"Steedman after Marx (A critique of the theory of positive profits with negative surplus value)"
by Mario L. Robles Baez
Profesor del Departamento de Producción Económica de la Universidad Autónoma de Xochimilco, México.

In the long history of criticism directed at Marx's value theory, there are theorists belonging to the most varied currents of the economic thought. Most of them have tried to prove that it is logically inconsistent. The neo-Ricardians, based on the work of Piero Sraffa, have been perhaps the most emphatic about it. Between them, Ian Steedman appears as that who is more convinced and set out more clearly the fundamental weaknesses and inconsistencies of Marx's theoretical body in his book Marx after Sraffa (Steedman, 1977).

According to Steedman, "The critic to Marx based on Sraffa can not be rationally rejected for the simple reason that it is correct." (Steedman, 1985:24). This essay will attempt to refute rationally Steedman's argument that, by extending the theory of value of Marx to the field of joint production it leads to results such as the existence of "positive prices and profits with negative surplus value" which turns out to be irresolvable a "contradiction" of its logical structure.

With the same mathematical tools used by Steedman, Robles pretends to prove Steedman's arguments are not only incorrect but also misleading and, therefore, also his criticism of Marx. The central argument of Robles' analysis is that logic and, therefore, the concepts of Marx are opposite to those of neo-Ricardians. Hence, although Robles uses, as Shaikh says, "The same algebra that they use when they ask different questions, generate different responses. It happens that these responses favor Marx much more than the neo-Ricardians"(Shaikh, 1984: 43-44). But Robles also tries to prove that Steedman's very mathematical formulations contain a set of properties that are unknown.

As the intention is not to present Robles' interpretation of the theory of value of Marx but, based on it, to show that contrary to what Steedman argues, Marx's LTV may be perfectly extendable to joint production models without it being logically inconsistent...

The essay is divided into two parts. In the first Steedman's arguments and procedures are presented and critically examined in his model of joint production. In the second Robles presents his version of the extension of Marx's theory of capital to joint production models using the same model of Steedman.

down load .pdf in Spanish (http://marxismocritico.files.wordpress.com/2011/11/steedman-despuc3a9s-de-marx-una-crc3adtica-a-la-teorc3ada-de-las-ganancias-positivas-con-plusvalc3ada-negativa.pdf)

[Die Neue Zeit]

*I think* the basic gist of positive profits with negative surplus value is one of fictitious capital, fictitious profits, and profiting in sectors employing mostly unproductive labour.

[Luís Henrique]

What would "negative surplus value" be, if anything at all?

Luís Henrique

[el_chavista]

What would "negative surplus value" be, if anything at all?

Luís Henrique
Capitalism without exploitation: The end of Marxism as we know it. Or just another claim of the neo-Ricardians that they finally proved Marx was wrong

[Luís Henrique]

Capitalism without exploitation: The end of Marxism as we know it. Or just another claim of the neo-Ricardians that they finally proved Marx was wrong

"Negative surplus value" would seemingly require that workers produced less from their labour than they consume in order to reproduce their labour power. How would this be possible?

Luís Henrique

[el_chavista]

"Negative surplus value" would seemingly require that workers produced less from their labour than they consume in order to reproduce their labour power. How would this be possible? Luís Henrique
This is by Marxism, id est, labor-value minus salary equals surplus-value.
But, since Piero Sraffa and his book production of commodities by means of commodities (which book, by the way, also overcomes marginal subjective theory of value) the neo-Ricardians are claiming that Marx's LTV is "inconsistent".
The expression "negative surplus value" is from Robles-Baez and his attempt to debunk Steedman's neo-ricardian criticism of Marx. I ain't studying economics long myself, I posted Robles-Baez's text hopping some economics-skilled Revlefter would give us a tip.
If you can speak Spanish, you may download Baez's text and see for yourself.

[u.s.red]

Negative surplus value with positive profits. That is like saying negative profit with positive profit. How do they explain the massive increase in profits and real wage decrease in the last 20 yrs? According to Sraffa, et al., there shouldn't be a 1% or 99% by now.

[el_chavista]

I began dealing with the topic after a declaration of a former "marxist" economist here in Venezuela, who, more or less, said that Chávez's trying to control prices is the same communist feature of Castro's regime and the USSR, and added: "Marx's ideas of the LTV are inconsistent" (exactly the neo-Ricardians' stand).

[el_chavista]

It is the surplus value of the economy as a whole.

http://img190.imageshack.us/img190/4749/tabla1o.jpg

From Table 1 Steedman proceeds to
the derivacibn of "values" of the goods.
Using the method of simultaneous determination
the "values" in units of homogeneous
work, direct and indirect
results in:

W1=-1, W2=2, w1/w2=-0.5

Assuming that the total wage basket for
the 6 units of "homeneuos" work used
in the economy is 3 M1 and 5 M2, the
net excedent surplus appropriated by
capitalist is : 5 M1 and 2 M2. With this, Steedman
proceeds to calculate the "value" of the force of
work "V" and "surplus value" "PV" in terms of
"homogeneus" work units using
the assuming added value of Marx
which ensures that V + Pv equals the
total direct work used in the economy (= 6
TT). Table 2 summarizes the accounting in
terms of "value" from table 1:

http://img715.imageshack.us/img715/4765/tabla2z.jpg

Based on results from Table 2,
Steedman asserts that in this system of "pure" joint production the
the surplus value of the economy as a whole is negative.

[u.s.red]

Wasn't Marx fairly clear on all this?

Price = wages + surplus-value (profit). Capitalist inputs $20 into a product, yet sells it for $40 at a profit of $20. How is this possible? It is possible because the real value of the product is $40, the increase being the part added by workers, which the capitalist does not pay for.

Giant monopoly corporations set their own prices, therefore, set their own profits. They let the free market set wages (workers competing with each other for jobs.)

Surplus value is profit.

[u.s.red]

Steedman asserts that in this system of "pure" joint production the
the surplus value of the economy as a whole is negative.

This looks like one of those fake tables used by marginalist economists. If Steedman's analysis is correct, then where are the real figures to back up the theory? There are endless, seemingly, statistics which could be used to prove the theory.

[el_chavista]

This looks like one of those fake tables used by marginalist economists. If Steedman's analysis is correct, then where are the real figures to back up the theory? There are endless, seemingly, statistics which could be used to prove the theory.
That's the point!
Robles-Baez can use the same mathematics and data from neo-Ricardian Steedman and obtain results favoring Marx's LTV.
It seems that even M. Morishima (together with G.Catephores) in 1978 defended his Fundamental Marxian Law from neo-Ricardians using linear programming.

[u.s.red]

According to the Bureau of Economic Analysis (which produces GDP figures) the bible of American capitalism, there are three components of price: labor costs, non-labor costs and profit. Table 1.15, National Economic Accounts.

This price, as defined by the BEA is prior to the product entering into the market. In fact, all of the figures of the BEA are estimates of future transactions, based on surveys of thousands of firms, businesses, etc.

This is exactly as Marx argued: The profit on production is determined, in the economy as a whole, prior to the sale of production.

It is a popular misconception that GDP figures show what happened in a previous quarter. The previous quarter is adjusted, but the numbers are a prediction, and an extremely accurate prediction. You can look at any book on the GDP.

The only source of profit is the production process itself, not the sale of the product.

[Die Neue Zeit]

In simpler business language, Selling Price = Cost plus Markup. The arrangement of that formula alone should give away an obvious conclusion on what components are planned and how they're planned.

[Luís Henrique]

Price = wages + surplus-value (profit).

Erm, no.

Prices = cost of raw materials+depreciation of capital+improductive expenses+taxes+interests+rents+wages+profits.


Surplus value is profit.

Surplus value is not the same as profit. Surplus value includes such things like rents, interests, and taxes, which are not part of profit.

Surplus value = value of production - (value of labour power employed in production+value lost in production due to depreciation of capital)

Profit = Total amount of sales - total expenses implied in the process of production

Luís Henrique

[u.s.red]

Erm, no.

Prices = cost of raw materials+depreciation of capital+improductive expenses+taxes+interests+rents+wages+profits.

Price = cost (everything from raw materials to wages) + profit.




Surplus value is not the same as profit. Surplus value includes such things like rents, interests, and taxes, which are not part of profit.

Rents, interest and taxes are paid out of profit, out of surpluse value. Otherwise, where does the capitalist get the money, funds, value, etc. to pay rent, interest and expenses?


Surplus value = value of production - (value of labour power employed in production+value lost in production due to depreciation of capital)

surplus value = value of production (average price) - costs (wages and depreciation). Price = cost + profit




Profit = Total amount of sales - total expenses implied in the process of production



This is the same thing as saying....Profit = price - costs,

or Price (sales) = cost + profit. Profit is the surplus value added by the worker (or rather, the working class), which is, in reality, a cost of production which the capitalist receives at no cost.

The worker is paid wages, the worker produces surplus value. The capitalist appropriates the surplus value as profit.

Or, as Marx, put it: "The surplus value, or that part of the total value of the commodity in which the surplus labour or unpaid labour of the working man is realized, I call profit. The whole of that profit is not pocketed by the employing capitalist." Value, Price and Profit.That is, a portion of surplus value, profit, is split between rent, interest, taxes, etc.

[Ocean Seal]

What would "negative surplus value" be, if anything at all?

Luís Henrique


Capitalism without exploitation: The end of Marxism as we know it. Or just another claim of the neo-Ricardians that they finally proved Marx was wrong
If anything this would just be the government attempting to offput the capitalist crisis by employing workers where it is unproductive to do so. And this seems just as unsustainable as capitalism.