Income-based class vs Marxist (Production) based class

[Kotze]

A Scan from Erik Olin Wright's entire book "Class Structure and Income Determination" (1979) is available on his site. Alternatively, you can download scans from single chapters here.

From the foreword:

[Wright] finds, for example, that even a crude measure of class explains at least as much of the variance in income as the more elaborate Duncan occupational status scale. Similarly, he finds that when class position is held constant, the commonly reported differential returns to education between blacks and whites and between men and women virtually disappear.

[S.Artesian]

That's precisely why relying on the capitalist conception of capital is misleading and wrong.

However, the above have to individually account for $5,000 worth of capital value to be considered capital.

What if it only had to amount to $100? Well, my computer, video game console and bed could each be considered capital. Basically, any durable good which can provide for repeated economic function can be considered capital so long as it meets the threshold.

And that threshold is arbitrary. What matters is employment of capital and the viability of said employment - for instance, I can rent out a room in my house, at a profit, and the exploitative character of the system will be evident. But if one of a number of conditions are met, this exploitative act can in fact be trivial or even serve to balance wealth rather than accumulate it.

This is because the lessee could be far wealthier than me and in extracting surplus value, and indisputably capitalist act can actually serve to equalize wealth.

This rarely happens. What often happens is that working class individuals are in possession of marginal capital which is often unemployed. This possession is unique from the Marxist conceptualization of capital accumulation because it doesn't serve the accumulative function well (or often at all) and provides little to no real economic leverage in the sense that wholesale production and financial systems do.

It's not the ownership, nor the market price, that determines its status as capital, it's the social relation. So unless the worker uses the car, or the apartment, to command the labor of others to produce commodities, no capital.

[cenv]

I think part of the problem here is our tradition of abstracting this question into a theoretical issue (ie. concerning ourselves with definition instead of engaging these definitions on a concrete and personal level). The heart of this issue isn't about deducing some categorical formula -- it has to do with the fundamental content of people's day-to-day lives.

Ultimately, proletarians are people who passively sit by as the content of their lives is processed and structured in terms of economic efficiency by the machinery of capitalism. They are denied the right to create and interact with the world around them that comes with owning property.

Classes in Marxism transcend the sociological constructs that spring to mind when most people hear the term "class." This is why it's so important that when presenting Marxism, we explain how things like alienation are integral to our understanding of social reality.

Capitalism constantly draws people's attention to quantifiable and superficial aspects of social existence -- like money. Our responsibility as Marxists is to inspire people to look beyond this and see the underlying, qualitative patterns that determine the structure of our lives, hopes, failures, possibilities, and so on.

[Dean]

It's not the ownership, nor the market price, that determines its status as capital, it's the social relation. So unless the worker uses the car, or the apartment, to command the labor of others to produce commodities, no capital.

I don't think that's accurate enough. In that concept, goods can be phased in and out of the "capital" section by simple nature of its employment or lack thereof. In other words, an economic downturn can transfer significant portions of capital to "non-capital" simply because its not being used.

However, this transfer says little to nothing in terms of economic capacity or the particular social character of the ownership of the capital, except that it is no longer being actively used in Marx's system of exploitation.

[S.Artesian]

I don't think that's accurate enough. In that concept, goods can be phased in and out of the "capital" section by simple nature of its employment or lack thereof. In other words, an economic downturn can transfer significant portions of capital to "non-capital" simply because its not being used.

However, this transfer says little to nothing in terms of economic capacity or the particular social character of the ownership of the capital, except that it is no longer being actively used in Marx's system of exploitation.

Exactly right. That's exactly one of the ways and economic downturn is an offsetting factor to the tendency of the rate of profit to fall. At one time, about 30% of US railcar fleet, 14% of commercial airliners, and 10% of the maritime container fleet were in storage.. in sidings and yards, in the desert, or at anchor outside Singapore's, Malyasia', and China's container ports. Those means of production/transportation were no longer capital, were not functioning as capital, were not expanding the value of capital.

Doesn't mean there weren't expenses associated with their sequestering, does mean to be capital, the object/commodity has to function as capital, has to operate in the effort to realize expanded value.

Marx explains this in some detail in his Economic Manuscripts in vols 33 and 34 of the MEGA-- and in other places. No exchange with wage labor, no extraction of surplus value. No surplus value, no valorisation. No valorisation, no capital.

[Dean]

Exactly right. That's exactly one of the ways and economic downturn is an offsetting factor to the tendency of the rate of profit to fall. At one time, about 30% of US railcar fleet, 14% of commercial airliners, and 10% of the maritime container fleet were in storage.. in sidings and yards, in the desert, or at anchor outside Singapore's, Malyasia', and China's container ports. Those means of production/transportation were no longer capital, were not functioning as capital, were not expanding the value of capital.

Doesn't mean there weren't expenses associated with their sequestering, does mean to be capital, the object/commodity has to function as capital, has to operate in the effort to realize expanded value.

Apparently, you're right about the specific point that capital only exists as such when it is employed but I still think that notion is unnecessarily restrictive.

Marx explains this in some detail in his Economic Manuscripts in vols 33 and 34 of the MEGA-- and in other places. No exchange with wage labor, no extraction of surplus value. No surplus value, no valorisation. No valorisation, no capital.

This is where you differ from Marx. For him (and others) capital is not only that capital which can valorize, but any realizable/realized capital.

He describes the accumulative process of capital via this method, but I don't think he discounts non-valorized capital as "non-capital."

[S.Artesian]

Apparently, you're right about the specific point that capital only exists as such when it is employed but I still think that notion is unnecessarily restrictive.


This is where you differ from Marx. For him (and others) capital is not only that capital which can valorize, but any realizable/realized capital.

He describes the accumulative process of capital via this method, but I don't think he discounts non-valorized capital as "non-capital."

In all of Marx's economic manuscripts,and Marx is clear, capital is capital only to the extent that it can command the labor of others, only to the extent that it accumulates, that it increases value through the aggrandizement of surplus value; through the exchange of the objective and objectified conditions of labor-- the means of production and raw materials-- with labor. It, capital, can only do this if the objectified conditions of labor are organized as private property, and labor itself is organized as wage-labor, i.e. has no use value for its "owner" save its value in this process of exchange.

Realized capital is valorized capital. That's what realization means, realizing the increased value gained through the extraction of surplus value.

Now aggrandizing labor does not automatically mean that the capital will be realized. That's where the market comes in. But without that aggrandizing, there's no capital to begin with, to move to the market. And in fact, if the realization doesn't occur, then the commodity capital ceases to exist as capital. It cannot make its transition to money, to reengage in the circuit of production to engender another round of accumulation. It becomes worthless, non-capital.


If we have 30 percent of the rail freight car fleet in storage, they are not functioning as capital. If we depreciate them to zero, then we offset a fall in the rate of profit. If we don't depreciate them, well then we still have them on the books, and we're still liable for the debt accrued in the purchase thereof, unless we have special covenants governing the cessation of payment of such fixed investment.

The point is capital to be capital has to accumulate; it can only do that through the exchange with living labor.

[Dean]

Realized capital is valorized capital. That's what realization means, realizing the increased value gained through the extraction of surplus value.

Not so. Valorization is a distinct process in that it is realization which expands the capital of capital, not merely produces a profit.

This is why its important: I can extract surplus value by renting out my home for 150% of my total expenses of maintaining the property. But my actual stock of capital doesn't necessarily expand. This is important because it describes the difference between "petty capitalists" and real, bona fide capitalist accumulation of wealth.

[S.Artesian]

Not so. Valorization is a distinct process in that it is realization which expands the capital of capital, not merely produces a profit.

This is why its important: I can extract surplus value by renting out my home for 150% of my total expenses of maintaining the property. But my actual stock of capital doesn't necessarily expand. This is important because it describes the difference between "petty capitalists" and real, bona fide capitalist accumulation of wealth.

You can claim a portion of the total, socially available surplus, you can claim part of someone's wages, you can claim revenue, but you are neither participating in a valorisation process, nor the realization process. You are not extracting surplus value, a surplus labor time. Rent, as Marx investigates it is a claim on the surplus value produced, or aggrandized, by others.

What exactly is valorisation? It is the "self-expansion" of capital. It is precisely the expansion of value through the command over labor-power.

In one of his draft versions of Capital [vol 28 of MECW] Marx writes: "Capital has so far been considered under the aspect of its physical matter as simple process of production. But this process is, under the aspect of its formal determination, a process of self-valorisation. Self-valorization includes both the preservation of the original value and its multiplication."

Your house is not organized as a condition of labor, a component of the labor process and therefore cannot be part of the valorisation process. Valorisation requires that labor process in a specific social configuration.

Realization is just that-- realization of the multiplied, expanded value embedded by the labor process in the commodities. It is the realization in the markets, the "confirmation" through a universe of exchanges, of the claim to a portion of the total socially available surplus value made by each particular capital through valorisation.

The original point is made over and over by Marx in his economic manuscripts-- without engagement of the objective conditions of labor, the means of production as property, with living labor as wage labor -- no valorisation. Without valorisation, no realization. Without realization, which is after all the realization of profit, no accumulation. Without accumulation, no expanded reproduction of capital, hence no preservation of the original value. Hence the loss of capital, its devaluation.

[Dean]

You can claim a portion of the total, socially available surplus, you can claim part of someone's wages, you can claim revenue, but you are neither participating in a valorisation process, nor the realization process. You are not extracting surplus value, a surplus labor time. Rent, as Marx investigates it is a claim on the surplus value produced, or aggrandized, by others.

What exactly is valorisation? It is the "self-expansion" of capital. It is precisely the expansion of value through the command over labor-power.

In one of his draft versions of Capital [vol 28 of MECW] Marx writes: "Capital has so far been considered under the aspect of its physical matter as simple process of production. But this process is, under the aspect of its formal determination, a process of self-valorisation. Self-valorization includes both the preservation of the original value and its multiplication."

Your house is not organized as a condition of labor, a component of the labor process and therefore cannot be part of the valorisation process. Valorisation requires that labor process in a specific social configuration.

Realization is just that-- realization of the multiplied, expanded value embedded by the labor process in the commodities. It is the realization in the markets, the "confirmation" through a universe of exchanges, of the claim to a portion of the total socially available surplus value made by each particular capital through valorisation.

The original point is made over and over by Marx in his economic manuscripts-- without engagement of the objective conditions of labor, the means of production as property, with living labor as wage labor -- no valorisation. Without valorisation, no realization. Without realization, which is after all the realization of profit, no accumulation. Without accumulation, no expanded reproduction of capital, hence no preservation of the original value. Hence the loss of capital, its devaluation.

The wikipedia article directly contradicts you here:

Valorisation of capital is for Marx not at all the same as the "realisation of capital". Value may be added in the production process, but this additional value may not be realised as an additional sum of money, unless the outputs are sold at a favourable price.

I haven't read the appropriate texts for years and the article is poorly cite (namely, not at all). But it looks like some facts are missing here.

Furthermore, it seems that Marx's description of rent in contradiction to capitalist production are in the furtherance of explaining the rent charged by landowners to those who produce or manage production on their land. In other words, he describes rent here as an outdated model for exploitation of production.

Do you think that Marx would have said that firms which specialize in the acquisition and rent of housing units was not involved in a capitalist model?

[S.Artesian]

The wikipedia article directly contradicts you here:

I haven't read the appropriate texts for years and the article is poorly cite (namely, not at all). But it looks like some facts are missing here.

Furthermore, it seems that Marx's description of rent in contradiction to capitalist production are in the furtherance of explaining the rent charged by landowners to those who produce or manage production on their land. In other words, he describes rent here as an outdated model for exploitation of production.

Do you think that Marx would have said that firms which specialize in the acquisition and rent of housing units was not involved in a capitalist model?

As I pointed valorization is the labor process by which capital aggrandizes surplus value and expands itself. Realization is just that, realization, the materialization as money of that valorized capital, that expanded value. Any or many or even all particular capitalists may realize some or none of the valorization, depending on market relations etc., but what they do realize is based on valorization that occurs in the labor process.

What would Marx say about renting housing? He would have said what he did say-- they are part of capital, of the distribution of surplus value. They are not part of the valorization process, nor do they realize the surplus value of commodity production.

[Dean]

What would Marx say about renting housing? He would have said what he did say-- they are part of capital, of the distribution of surplus value. They are not part of the valorization process, nor do they realize the surplus value of commodity production.

Ok, I agree with you then. Capital can be a surplus-value generating resource without engaging in valorization.

[Kiev Communard]

Actually Marx himself, as Eric Olin Wright noted, had never set forth the systematic criteria of the class definition. The Orthodox Marxist definition of the social classes was actually formulated by Vladimir Lenin.

"Classes are large groups of people differing from each other by the place they occupy in a historically determined system of social production, by their relation (in most cases fixed and formulated by law) to the means of production, by their role in the social organisation of labour, and, consequently, by the dimensions of the share of social wealth of which they dispose and their mode of acquiring it". (Vladimir I. Lenin: 'A Great Beginning: Heroism of the Workers in the Rear: 'Communist Subbotniks' in: 'Collected Works', Volume 29; Moscow; 1965; p. 421).

I think that this definition still holds true but that instead of classic petty bourgeoisie (small artisans and petty traders) that was either relegated to the status of "self-employed" (quite diverse transitional social group that does not consitute a socila group in itself and can be thought of, to a certain degree, as "fringe social strata" similar to Lumpens) or elevated to the lofty position of "small businessmen", which are just representatives of the lower strata of bourgeoisie itself. Therefore the traditional "leftish" accusation of "petty bourgeois" class character of any rival left-wing political groups and parties is simply without basis in current objective reality.

Instead of petty bourgeoisie, which was quite economically independent, even if suffering under the whims of the market and haute bourgeoisie economic pressure, the role of the "middle class" in modern Capitalist societies is played by the so-called "New Middle Class", as Anton Pannekoek put it, or, as Barbara and John Ehrenreich argued, the Professional/Managerial Class (the PMC). The PMC cannot be simply considered a certain "stratum" of a broader "working class" because its members are obviously in distinct relationships with both the industrial and services workers and employers/capitalists. And, unlike petty bourgeoisie, it is not a leftover of Absolutist simple commodity production economy of 16th - 18th centuries, it is a social class born out of the development of Late/Monopoly Capitalism itself and should be viewed as such - as intrinsic part of the modern class structure, not as a some kind of "residual" class that would eventually turn into members of the working class.

So, the PMC can be defined as "consisting of salaried mental workers who do not own the means of production and whose major function in the social division of labour may be described broadly as the reproduction of capitalist culture and capitalist class relations" (Ehrenreich, Barbara and John Ehrenreich. "The Professional-Managerial Class." In Between Labour and Capital. Ed. Pat Walker. Montreal: Black Rose P, 1979. - P. 12). So the PMC encompasses, on the one hand, specialists who are directly concerned with social control or propagation of ideology (teachers, social workers, entertainers, etc.), and, on the other hand, its members directly participate in the process of production - e.g., middle-level administrators and managers, engineers, supervisors, etc. as well as the scientists who, though not directly occupied in the process of production, facilitate it with their discoveries. For more reading, see this - http://books.google.com.ua/books?id=-LPgx62t86gC&printsec=frontcover#v=onepage&q&f=fals e