An alternative theory to surplus value.

[Nathyn]

I'm not sure if this is a new idea, as I'm not all that educated in Socialism. However, I am aware that Marx believed that the proletarian and the bourgoisie developed as a result of paying workers less than their labor was worth and profiting from the surplus value. I reject both surplus value and the labor theory of value on the same grounds as mainstream economics, but still believe in the polarization of classes for an alternate reason.

First of all, individual financial success is primarily a function of capital. This is why, for instance, that even in the absence of government protection of corporations, in general a small business is less likely to succeed in competition against a large business. Capital plays a larger role, in fact the primary role, in determining success.

Because of this, there is a marginal propensity to not labor. With each dollar a person earns, the amount of labor required to survive decreases. Beyond the survival threshold, they make profit and with each dollar a person earns, the amount of labor necessary to profit decreases. This creates a polarization and is the cause for why no unregulated market can inherently remain unregulated. As soon as the bourgoisie and proletariat are created, the bourgoisie use their money to influence the government to further increase their profit.

Adam Smith acknowledged this in Wealth of Nations that the wealthy do not work. Being that they do not labor, any claim by them to property is invalid, even assuming individual property rights were legitimate, which they are not. Smith also acknowledged that government should generally be for the benefit for the poor, because the rich generally use their wealth to their own political advantage.

[gilhyle]

I find your theory a bit difficult to follow. You might elaborate a bit more. Just a couple of comments:

1. the labour theory of value in Marx is not an explanation as to why classes are polarized, it is an explanation of where profit comes from (it is a realized form of surplus value). THat may seem a picky argument to you, but I think the distinction is important. Marx is not explaining how classes came, historically, to be polarized, or why it was rational for people to accept polarization, he is explaining how such a polarization is sustained throughout an historical period in which labour and capital are separated. The answer involves explaining how capital can get its hands on some of the benefits of labour. If you want to explain how the class division emerged, you turn to history - a different point, although one taken up in the final chapter of Vol One of Capital where his answer does not involve the labour theory of value so much as the class theory of the State!

2. Rather than being in anyway contentious, the labour theory of value actually rests on a banal and obviously true observation, so banal as to be incontrovertable. The observation is this - the only thing that really matters to a human, or to all humans is his/her time. That is all we have. All economic value must be derived from the expenditure of time. The economic issue is how the time of different people get compared and mutually valued and Marx's answer is that until the universalisation of capital, time has never been effectively valued. In particular localities and isolated or self sufficient communities there can be a temporary valuation of time, but this is only partial and temporary and does not encompass the species as a whole.

3. By systematically separating capital from labour, capitalism allows frozen time (capital goods) to be produced, valued and traded on an efficient market. That amazing achievement sustains capitalism.

4 . For socialists interested in the systematic suppresion of the law of value without the loss of the production and trading of 'frozen time' (capital goods), it is tempting to disregard the achievement of capitalism, but if we do not adequately respect the law of value, we will never complete its suppression, since the law of value can only be suppressed one way : by the overproduction of consumer goods, in turn only achieveable by the overproduction of productive capacity (i.e. frozen time) which is in turn only achievable by the most efficient production - i.e. by the intense application of the law of value

Twisted, eh ?

[Luís Henrique]

there is a marginal propensity to not labor. With each dollar a person earns, the amount of labor required to survive decreases. Beyond the survival threshold, they make profit and with each dollar a person earns, the amount of labor necessary to profit decreases.

You see, that's not possible. If labour is necessary to produce means of life, either each person must work for their own living, or there must be a method for making other people work for them. If a capitalist cannot live on other people's labour, then he must work for himself. If he so does, then there is no possibility that he lives without working. But, if he works, according to you, then he is not a capitalist.

Capital cannot create wealth out of itself; only the use of capital by human work can do so. So, if there was no exploitation of others, a capitalist could, at most, work very little, for his own consumption, and idle the rest of the time. But that is not what it happens; capitalists do no productive labour at all, but they "work" a lot in improductive tasks (sometimes they even overwork themselves to death).

As soon as the bourgoisie and proletariat are created, the bourgoisie use their money to influence the government to further increase their profit.

How would a government increase profits?

Luís Henrique

[Nathyn]

Originally posted by gilhyle@Aug 31 2006, 08:11 PM
I find your theory a bit difficult to follow. You might elaborate a bit more. Just a couple of comments:

1. the labour theory of value in Marx is not an explanation as to why classes are polarized, it is an explanation of where profit comes from (it is a realized form of surplus value). THat may seem a picky argument to you, but I think the distinction is important. Marx is not explaining how classes came, historically, to be polarized, or why it was rational for people to accept polarization, he is explaining how such a polarization is sustained throughout an historical period in which labour and capital are separated. The answer involves explaining how capital can get its hands on some of the benefits of labour. If you want to explain how the class division emerged, you turn to history - a different point, although one taken up in the final chapter of Vol One of Capital where his answer does not involve the labour theory of value so much as the class theory of the State!

2. Rather than being in anyway contentious, the labour theory of value actually rests on a banal and obviously true observation, so banal as to be incontrovertable. The observation is this - the only thing that really matters to a human, or to all humans is his/her time. That is all we have. All economic value must be derived from the expenditure of time. The economic issue is how the time of different people get compared and mutually valued and Marx's answer is that until the universalisation of capital, time has never been effectively valued. In particular localities and isolated or self sufficient communities there can be a temporary valuation of time, but this is only partial and temporary and does not encompass the species as a whole.

3. By systematically separating capital from labour, capitalism allows frozen time (capital goods) to be produced, valued and traded on an efficient market. That amazing achievement sustains capitalism.

4 . For socialists interested in the systematic suppresion of the law of value without the loss of the production and trading of 'frozen time' (capital goods), it is tempting to disregard the achievement of capitalism, but if we do not adequately respect the law of value, we will never complete its suppression, since the law of value can only be suppressed one way : by the overproduction of consumer goods, in turn only achieveable by the overproduction of productive capacity (i.e. frozen time) which is in turn only achievable by the most efficient production - i.e. by the intense application of the law of value

Twisted, eh ?

What you said regarding the "expenditure of time," is particularly confusing. From what I remember of Marx, he never clarified the ambiguity of "socially-necessary," time.

But I never read Das Kapital. I'll have to read it. For now, I'm out to smoke some weed with some friends, lol. What you've said about expenditure of time seems wrong, but I can't put my finger on why. I'll have to re-read your post later.

One question, though: How does the universalization of capital allow for proper evaluation of time? What I mean is, even under total communal ownership, we all won't necessarily work at the same rate.

[Phugebrins]

What Nathyn says does not actually contradict or impact on LTV at all; he's merely describing one process by which capitalism results in grossly disproportionate inequality.

"With each dollar a person earns (read: "makes"), the amount of labor required to survive decreases. Beyond the survival threshold, they make profit and with each dollar a person earns, the amount of labor necessary to profit decreases."
In other words, above a living wage, more money is paying for access to the means of production, hence the rich get richer.

[Nathyn]

Back early. The neighborhood is dry, so no smoke for me.

Originally posted by Phugebrins@Aug 31 2006, 08:48 PM
What Nathyn says does not actually contradict or impact on LTV at all; he's merely describing one process by which capitalism results in grossly disproportionate inequality.

"With each dollar a person earns (read: "makes"), the amount of labor required to survive decreases. Beyond the survival threshold, they make profit and with each dollar a person earns, the amount of labor necessary to profit decreases."
In other words, above a living wage, more money is paying for access to the means of production, hence the rich get richer.

Well, actually, no. I don't believe in the LTV, but the mainstream economic definition of value.

However, this is an alternative means of defining surplus value and the process of its accumulation by the bourgoisie without relying upon Marx's labor theory of value. It's identical in its results, because the bourgoisie are gaining wealth for which others labored for them to achieve: surplus value. It's the same process, but defined from a different starting point of value.

[Nathyn]

I'm taking a second closer look at the LTV. Also, Phugebrins, to revise what I said: I originally asserted that it could be an alternative explanation to surplus value in the LTV, but I see how it could also be compatible with the LTV, either as an alternative explanation of surplus value, or an additional process which increases inequality, more likely the former.

[gilhyle]

Originally posted by Nathyn@Aug 31 2006, 11:24 PM

Well, actually, no. I don't believe in the LTV, but the mainstream economic definition of value.

I dont think there is a mainstream economic view of value - only a mainstream view of price, which isnt the same thing.

[gilhyle]

You ask "How does the universalization of capital allow for proper evaluation of time?" THe answer is that it is only with the universal extention of a mode of production in which the product of the expenditure of time is then traded that the value of expenditures of time can be mutually measured.

Thinking about it, that doesnt actually happen in capitalism, since it is almost certainly incapable of the socialisation and commercialisation of the bulk of domestic labour. I was probably wrong to say that.

[ComradeRed]

I dont think there is a mainstream economic view of value - only a mainstream view of price, which isnt the same thing.

This is correct, although bourgeois economists throw around the words "value" and "price" sloppily and confuse the two to be one in the same.

They ain't.

Read The Production of Commodities by Piero Sraffa. He covers the concept of value thoroughly and extremely well, in the "classical" sense of the word.

[Luís Henrique]

[quote]Originally posted by Nathyn@Aug 31 2006, 08:18 PM

From what I remember of Marx, he never clarified the ambiguity of "socially-necessary," time.

He did, but most people have difficulties with the concept.

"Socially necessary" is socially defined. There is no "minimun threshold"; each society tacitly decides what is "socially necessary" to reproduce work force. The workers organise and fight back, that "socially necessary" rises; the capitalists strike back, defeat labour organisations, that "socially necessary" falls.

Luís Henrique

[Nathyn]

Originally posted by gilhyle@Sep 1 2006, 07:00 PM
You ask "How does the universalization of capital allow for proper evaluation of time?" THe answer is that it is only with the universal extention of a mode of production in which the product of the expenditure of time is then traded that the value of expenditures of time can be mutually measured.

Thinking about it, that doesnt actually happen in capitalism, since it is almost certainly incapable of the socialisation and commercialisation of the bulk of domestic labour. I was probably wrong to say that.

They consider price and value to be pretty much synonymous.

[Nathyn]

Originally posted by gilhyle@Sep 1 2006, 07:00 PM
You ask "How does the universalization of capital allow for proper evaluation of time?" THe answer is that it is only with the universal extention of a mode of production in which the product of the expenditure of time is then traded that the value of expenditures of time can be mutually measured.

Thinking about it, that doesnt actually happen in capitalism, since it is almost certainly incapable of the socialisation and commercialisation of the bulk of domestic labour. I was probably wrong to say that.

Perhaps that might be true for Communism, after it is established under radically different socioeconomic conditions. But under the current economy, wealth is upward flowing, so if you were to suddenly redistribute all wealth totally equally throughout the world, within a century, you'd have capitalism again unless a central authority prevented such.

Because many people are selfish and would want what you call "frozen labor-time." In a modern economy with a rather wide division of labor, only people who perform the same job (or have technical knowledge of such) would be capable of knowing exactly how much labor-time would be required. So, laborers would already be able to sell goods for higher than their labor value to those without such knowledge. Furthermore, due to non-homogeneity of individual productivity, in an economy with equal wealth distribution, price would still be pushed slightly above labor value for some transactions. Some people work harder and faster than others. But calculations of labor value only take into account the entire labor force, assuming it's homogeneous, which it isn't. It's virtually impossible to calculate labor value for one worker's productivity. Those individuals who are harder working would keep the excess value in profit. And that profit would be used as capital, therefore necessitating capitalism.

Having a central authority restrict such would also be problematic because it would be rather hard to tell when a worker is actually attempting to gain surplus value or when they're just being lazy yet still accepting the going-rate for their labor.

[gilhyle]

I think your argument may be in danger of slipping between two different arguments:

1. it is of the nature of human beings, as rational individuals always to revert to something like capitalism, or

2. it is of the nature of human beings as rational individuals, in the face of significant continuing scarcity to revert to something like capitalism whenever an attempt is made to go beyond it - if the scarcity is not promptly overcome.

Which of these, if either, do you identify with ?

You are correct to this extent - and it is a basic point for Marxism - the level of development of the forces of production determines what mode of production and form of distribution is practical. That is true. But it is also true only at a very high level of abstraction.

At the moments of transition such abstractions are at too high a level to inform and empower us to the right course of action ..... and, to use the cliche, the rubber is hitting the road.....once you get into a transitional period, the generalization that you have to wait until the forces of production are sufficiently developed before you can move beyond capitalist social relations becomes problematic, if not superfluous.

The recognition of this is what differentiated the Third International from the Second International at the level of theory.

I dont know - and you dont know - what level of wealth is necessary to INITIATE the transition to a socialist society. Among the things we dont know, is how much the transition to a workers state can facilitate the further boosting of the level of development of the forces of production. We dont know what the extent of the (undoubted) inefficiencies created by the imperialist stage of capitalism are and thus we dont know what the boost to the forces of production will be when those inefficiencies are unwound. Nor do we know if anyparticular state (country) has the wealth to intiate the process of unwinding them.

[Nathyn]

Originally posted by gilhyle@Sep 2 2006, 02:19 PM
I think your argument may be in danger of slipping between two different arguments:

1. it is of the nature of human beings, as rational individuals always to revert to something like capitalism, or

2. it is of the nature of human beings as rational individuals, in the face of significant continuing scarcity to revert to something like capitalism whenever an attempt is made to go beyond it - if the scarcity is not promptly overcome.

Which of these, if either, do you identify with ?

You are correct to this extent - and it is a basic point for Marxism - the level of development of the forces of production determines what mode of production and form of distribution is practical. That is true. But it is also true only at a very high level of abstraction.

At the moments of transition such abstractions are at too high a level to inform and empower us to the right course of action ..... and, to use the cliche, the rubber is hitting the road.....once you get into a transitional period, the generalization that you have to wait until the forces of production are sufficiently developed before you can move beyond capitalist social relations becomes problematic, if not superfluous.

The recognition of this is what differentiated the Third International from the Second International at the level of theory.

I dont know - and you dont know - what level of wealth is necessary to INITIATE the transition to a socialist society. Among the things we dont know, is how much the transition to a workers state can facilitate the further boosting of the level of development of the forces of production. We dont know what the extent of the (undoubted) inefficiencies created by the imperialist stage of capitalism are and thus we dont know what the boost to the forces of production will be when those inefficiencies are unwound. Nor do we know if anyparticular state (country) has the wealth to intiate the process of unwinding them.

I consider Capitalism to be temporarily partially necessary. While Capitalism is ethically unjustified and governments should inherently benefit the poor In some cases, I have not found that socialist reforms, such as the minimum wage and welfare, to be ineffective or counteffective yet see a negative progressive income tax as a reasonable alternative.