Filleting Nick Rogers Latest Argument - Part 3

Nick says,

“I think Arthur treats Marx’s discussion of capital in general and many capitals in a manner that is as undialectical as his understanding of the category of value. Marx’s study of capital requires the analytic unity of capital in general and many capitals. Marx’s method was to move from the abstract (capital in general) to the concrete (many capitals, including competition and the division of surplus value between different factions of the capitalist class) and back again.

Many features of Marx’s theory can only be examined by moving towards the study of many capitals: capitalism’s drive towards increasing the productivity of workers; the creation of a general rate of profit; the tendency of the rate of profit to fall and its countervailing factors; the role of financial capital; the causes of cyclical crises.”

I've dealt with Nick's attitude to the Law of Value elsewhere, along with his undialectical concept of time and history. For Nick, time is not continuous but broken down into discrete periods. This also determines his approach to the Law of Value. For Nick, the Law of Value only exists under Capitalism. That is despite all of the instances where Marx states the opposite, and demonstrates how historical development proceeds according to this “Natural Law”, as he calls it, until society arrives at commodity production, and when Value is able to take the form of Exchange Value. But, Nick's syllogistic approach forbids any such evolution. Instead, for him Value springs into existence fully formed like Minerva, along with Capitalism.

For Nick each period of time, like Capitalism here, is discrete and sealed off with huge Chinese walls, to prevent any contact with everything that went before, or that comes after. Yet, according to Nick, it is my approach which is undialectical!!!

In the Preface to Capital I, Marx writes,

"The value-form, whose fully developed shape is the money-form, is very elementary and simple. Nevertheless, the human mind has for more than 2,000 years sought in vain to get to the bottom of it all, whilst on the other hand, to the successful analysis of much more composite and complex forms, there has been at least an approximation. Why? Because the body, as an organic whole, is more easy of study than are the cells of that body."

Marx details how
Aristotle tried to understand
Value, yet according to
Nick, Value is only as old
as Capitalism!

Which illustrates two points.  Firstly, Marx states that he is beginning his analysis at the microscopic level of commodities, and working up through "Many Capitals", to "Capital in General" or in this analogy "the body as an organic whole", which is the exact opposite of what Nick says.  Secondly, if the human mind has been trying for 2000 years to get to the bottom of the "Value Form", how can it be, as Nick claims that "Value" only came into existence alongside Capitalism!  If, the Value Form found its fully developed shape in the money form, which was established in Antiquity, how can Nick claim that it only arose with Capitalism a few Centuries ago? 

Marx describes how coins circulated
as the Universal Equivalent Form of
Value in Antiquity, but according to Nick
Value only exists under Capitalism! 

It is as though Nick has never even read Capital. Otherwise, how can we explain this view of Value, and the Law of Value, when we compare it with Chapter 3 of Volume I of Capital, where Marx details the evolution of Money as the Universal Equivalent Form of Value? How on Earth can Nick maintain his view that Value is specific to Capitalism, given Marx’s statement there that Money first emerges amongst nomadic tribes, because of their regular contact with other tribes, and the exchanges between them? How does Nick explain the circulation of coins as the Universal Equivalent Form of Value in Antiquity, if Value only exists under capitalism?

Marx's analysis and examples in Vol I, of things
like the working day, of child labour is done at the
 level of firms and industries, with data taken from
Engels and Factory Inspectors Reports i.e. the
level of "Many Capitals".

But, the rest of Nick's comments here give the impression that Nick has never read Capital. A cursory look at Capital Volume I illustrates that Marx begins by looking at the “cells” of Capitalism i.e. commodities rather than with Capital in General. Marx then continues to analyse  Value throughout history, and the way it develops into Exchange Value, itself through a whole process of stages until it arrives at its mature form under generalised commodity production, prior to the establishment of Capitalism. He goes on, then to examine Exchange Value embodied in labour power and constant capital, and does so, not as Nick says in terms of Capital in General, but in terms of Many Capitals. All of the analysis, and examples Marx provides in Volume I of Capital, are at the level of the individual firm or industry i.e. “Many Capitals”. It is only when Marx gets to Volume III, that he moves to the analysis of Capital in General, whilst at the same time, breaking it down once more into Money Capital, Commercial Capital and Productive Capital alongside landed property. Moreover, Marx’s analysis of “the creation of a general rate of profit; the tendency of the rate of profit to fall and its countervailing factors; the role of financial capital; the causes of cyclical crises” is undertaken in Volume III of Capital, precisely in terms of his analysis of “Capital in General”, and could be no other! In other words, the reality is the opposite of what Nick says here.

Nick continues,

“I embrace Arthur’s charge that the role of many capitals interests me, for it is only on the basis of Marx’s complete method that we can usefully analyse the dynamic of capitalist reality.”

But, I have never charged Nick with that. What I have charged Nick with, as other advocates of the TSSI, is a subjectivist analysis based upon Capitalists rather than Capital! Nick's statement is all the more ironic given that his argument is based on a rejection of Marx’s method of determining the Rate of Profit, not to mention his rejection of Marx’s method based on Historical Materialism and the dialectic, which is manifest in his syllogistic concept of time. That is also illustrated when Nick writes,

“However, the second thing a current-replacement-cost rate of profit does is to treat the production cycle as if time were abolished. Inputs and outputs, remember, are valued at the same moment. This is its ultimate absurdity.”

But, as I've described elsewhere it is Nick whose argument relies on a syllogistic view of time, as being divided into discrete blocks, which abolishes time, because it posits a “point in time”, which could only be a “zero point”, i.e. one with no dimension, no beginning or end, and therefore, one that does not exist in the material world, but only within the realm of ideas!

A metre of cotton cloth has the same Value (because it
represents the same fraction of social labour time) as any
other metre of cotton cloth of the same type, whether that
metre has just emerged as an output, or whether it is currently
being bought as an input, or is in the process of being made into
 clothes.  For Marx, the division of labour, and social division of
labour form one continuous process with identical commodities
appearing simultaneously at different stages within it.  Value is not
 something inherent within the commodity.  The commodity merely is
the outward manifestation of the Value contained within it i.e. the
portion of average social labour-time.

What is really absurd is that Nick can think that two commodities existing within the same period of time can have two different values provided we call one an input, and the other an output. So, a kilo of cotton produced as an output, for Nick can be valued at £10, whereas a kilo of cotton bought at the same time as an input, can be valued at £9!!! In reality this is just another example of Nick's commodity fetishism, because it implies that the Exchange Value of the commodity is something intrinsic to it, rather than being as Marx makes clear simply a measure of the average social labour-time required to produce the particular species of commodity, of which any one specific unit is in Marx’s words, “the same as any other, so far as it has the character of the average labour power of society, and takes effect as such..”

Nick says,

“Their measurement of the rate of profit does two things. It treats all investments as if they had just been purchased at the prices that currently obtain for all the elements of fixed and circulating capital. It therefore abstracts from the effects of capital devaluations. While such a procedure will clearly miss many disturbances in the economy up to and including a slump, we might think that it ought to tell us something useful about the potential profitability of the economy once the crisis is overcome.”

The first charge is rather rich, for someone who wants to value that Capital not at this devalued price, but at its original purchase price! But, of course, it is precisely the Marxist method of valuing the capital according to its current replacement cost that DOES capture this devalued price. That applies equally to where the Capital is devalued due to a crisis of overproducion, precisely because Marx includes in his determination of Value, the concept of “socially necessary labour-time”, and labour-time spent on producing any commodity, including those that comprise Capital, that was not socially necessary, which is the case with an overproduction of Capital, does not contribute to Value!

But, it is precisely, because the current replacement cost DOES capture these changes in the Value of Capital, whether they arise from “Moral Depreciation”, or because of an overproduction of Capital, that it provides an accurate and appropriate basis upon which to calculate the Rate of Profit, because it indicates the rate at which accumulation can proceed given those prices, and the volume of profit, whereas the historic cost of capital has no bearing upon that relation.

Nick says,

“The procedure cannot capture changes in value over the course of the production cycle - let alone phenomena such as the falling rate of profit.”

This is bizarre! It is precisely the current replacement cost method that DOES capture changes in Value during the production cycle. That is exactly what Marx does when he says that a change in Value of cotton in stock or other parts of the production process, arises if the current-replacement-cost changes! It is Nick who insists that these changes have to be ignored, and that only the price paid for that cotton at some time in the past can be used, both as the basis for calculating the Rate of Profit, and as the basis of the Exchange Value of the Constant Capital transferred to the end product!

And, it is precisely because of that that the current replacement cost DOES take account of both a falling and rising rate of profit due to changes in the Value of Constant Capital! On Nick's Historic Cost basis, however, neither the Value of the Constant Capital, nor its component transferred to the end product change, and so with a constant quantity of labour-power employed, and constant rate of exploitation, there can be no change in the Rate of Profit!

Nick continues,

When newer better machines raise productivity
it means more Use Values are produced with
less labour-time.  This means that the same number
 of Use Values have less Value than previously -
the opposite of what Nick claims!

“Since an increase in productivity, by definition, will increase the output of physical use-values, productivity increases can only be represented in the current-replacement-cost model by an equivalent increase in the output of values - yet we know that an increase in productivity lowers the socially necessary labour time required to produce commodities and reduces both values and prices compared to the physical quantities of commodities produced.

The current-replacement-cost rate of profit effectively parts company with the labour theory of value.”

This is once again bizarre, and suggests that he does not at all understand the Marxist analysis.

Marx makes clear in Volume I of Capital, that Value moves in an equal but opposite direction to Use Value as a consequence of changes in productivity. Suppose, in 10 hours, 1000 kilos of Cotton can be produced. The Value of 1 kilo of cotton equals 0.01 hours of labour-time. If productivity doubles the quantity of Use Value doubles i.e. 2000 kilos are produced. But, the total amount of value produced, in 10 hours, remains Constant! 10 hours of Labour-time remains 10 hours of labour-time. The difference is that the Value embodied in each Kilo of cotton has halved. Each Kilo now has a Value of 0.005 labour hours.

So, why on Earth does Nick say that the Marxist replacement cost method can only be represented by an increase in the output of “Value(s)” (sic). If 10 hours of labour-time are expended then 10 hours of Value is produced, whatever the level of productivity! It can be represented in the same quantity of Use Values, with half the previous Value! That is the whole point. An increase in productivity in the production of Constant Capital, means that the same quantity of Constant Capital is produced with a lower Value, which means that a higher rate of profit can be obtained from it!

That is illustrated in Example (3) given in Part 2. There I demonstrated that in the following production function.

C 500 + V 1000 + S 1000 = E 2500.

Here the labour-time required to produce the constant capital had halved compared with the previous situation where,

C 1000 + V 1000 + S 1000 = E 3000.

Far from the rise in productivity resulting in an increase in Value produced, it has resulted in a fall in Value from 3000 to 2500, equal to the reduction in Value of the Constant Capital. Yet, exactly the same quantity of Use Values are produced here! If we assume this production function represents that for Capital in General, and we assume that £1 = 1 hour of social labour-time, then we have a directly comparable situation, but in reverse, to where the Constant Capital appreciated. In other words, formerly the society had to work for 3000 hours, now it can produce the same quantity of Use Values by working for just 2500 hours. Once again, its important to point out that this is true, as Marx points out, whether the society we are discussing is a primitive communist society, a slave owning society, a natural society based on peasant production, Robinson Crusoe on his island, or a Communist Society. The only difference is the form in which in these different societies, the means of production, the means of subsistence, and the social surplus are produced and distributed.

Its also important to note here that if we take the first production function here as being at the level of Capital in General, it indicates that even working this reduced number of hours, this society would have a higher proportion of social surplus to means of production and means of subsistence, and consequently would be able to grow more rapidly. Finally, it should perhaps also be pointed out that under Capitalism, its unlikely that the fall in the Value of Constant Capital would result in less total labour time being expended. Instead, the fall in the price of the Constant Capital would be likely to prompt the purchase of additional Constant and Variable Capital during the year. Once again, because the current replacement cost method operates with a dialectical concept of time, whereby the production process is continual, it is able to capture this within its analysis.

Having come to a dead end in his previous insistence on using the historic cost as the basis for determining the value transferred to the end product Nick declared, “I intend to spend time working through this issue”. I think he really needs to spend time working through Marx’s philosophical method, and his scientific method elaborated in his analysis in Capital, because its quite clear that even if Nick has read it, he certainly does not understand it.

Back To Part 2