Roberts says,
“Capital appropriates surplus value by exploiting labour-power and buys capital goods with that surplus value.”
This is pure Keynesianism. Firstly, he has completely obliterated raw materials as a component of constant capital in this formulation, reducing it to being solely fixed capital. Secondly, like Keynes, he explains the demand for capital goods entirely on the basis of, what Keynes calls Net Investment, i.e. capital accumulation, evading the question, thereby, of where the demand, and the fund, is to come from for the replacement of the worn out fixed capital, whose value has been transferred to output, but forms a revenue for no one. What is more, in a perverse reversal of Ricardo, who only saw accumulation as an accumulation of variable-capital, Roberts fails to notice that accumulation from surplus value also involves not just the purchase of capital goods, and raw materials, but also additional labour-power. Including that, however, would make his fudge, by the merging of investment with the replacement of constant capital obvious.
In essence, all that Roberts has done, here, is to take the Keynesian equation of Saving = Net Investment, or S = I, which Keynes introduced in an attempt to save Say's Law, and has relabelled savings to surplus value. In fact, even in these terms, this is wrong, because, as Marx sets out in Capital II, firms do not accumulate just out of surplus value. They accumulate out of the value accumulated from wear and tear of fixed capital, not used for actual replacement, and they accumulate out of other money reserves and hoards, including those brought together by banks out of workers savings not immediately consumed.
Roberts then says,
“Thus it is wages plus profits that determine demand (investment and consumption).”
Again this is just Keynes updated version of Say's Law. In place of the equation C = Y, where C is consumption, and Y is National Income, Keynes introduced the reality that not all income is consumed, i.e. there is saving. He then equates saving with investment S = I, so that the overall requirement of Say's Law is met, as now C + I = Y. But, as Marx describes, this is totally false, because consumption and investment are not the only elements of expenditure – leaving aside government spending, and exports and imports. The other main element of expenditure, which becomes the increasingly dominant element of expenditure, is the expenditure on productive consumption, on replacing the consumed raw materials and worn out fixed capital. Roberts completely evades explaining where the fund and the demand for this element comes from, and so like Keynes fudges the issue by conflating it with Net Investment.
What Roberts does is to repeat Adam Smith's “absurd dogma”, as Marx calls it, that the value of commodities, and so also the national output, resolves entirely into revenues. Its this absurd dogma that Roberts now purveys, in the name of Marxism! But, Marx, in Capital II, III, and in Theories of Surplus Value, Part I, sets out in detail that the total output value cannot be equal only to revenues, that the total product cannot be equal only to that which finds its equivalent demand in those revenues from wages, profits, rents and interest, because the latter are only equal to the consumption fund, in conditions of simple reproduction, and to consumption plus accumulation (net investment) in conditions of expanded reproduction. By claiming that the question of demand for, c, constant capital is answered by the purchase of capital goods out of surplus value, Roberts simply offers up the same sorry explanation as put forward by Proudhon and Forcade, who when asked this same question of where the demand for the constant capital came from, answered that it came from the continual expansion of production each year! That is the same explanation as provided by Keynes who equates it with Net Investment, in his identity equation I = S, where I is Net Investment, and S is normal or planned savings. The only difference in Roberts formulation is that he calls normal savings that part of surplus value that is accumulated.
But, this clearly cannot be the same as, or equal to that part of the value of output that is accounted for by the value of the consumed constant capital!
“The fundamentally erroneous dogma to the effect that the value of commodities in the last analysis may be resolved into wages + profit + rent also expresses itself in the proposition that the consumer must ultimately pay for the total value of the total product; or also that the money circulation between producers and consumers must ultimately be equal to the money circulation between the producers themselves (Tooke); all these propositions are as false as the axiom upon which they are based.”
(ibid)
As Marx describes, the revenues (v + s), are equal only to the consumption fund, i.e. the value of output of Department II, as set out in the formula for Simple Reproduction, in Capital II, Chapter 20. It is not equal to that part of national output, equal to the value of output of constant capital by Department I. And, of that value, the value of the consumed constant capital of Department I, never exchanges with revenues, never finds demand from any such revenue, but is reproduced by, and finds its demand from capital in Department I, via mutual exchange, or direct replacement on a like for like basis, by each capital, i.e. a farmer who replaces their own seed, a coal mine that replaces its own coal used to power steam engines, and so on.
Faced with this impossible conundrum, Roberts, like Keynes conflates the replacement of the consumed constant capital, with the accumulation of capital, net investment out of the surplus value. That is also what Proudhon does, and which is the answer provided by Forcade.
Speaking of the latter, Marx notes,
“Secondly, he correctly generalises the difficulty, which Proudhon expressed only from a narrow viewpoint. The price of commodities contains not only an excess over wages, but also over profit, namely, the constant portion of value. According to Proudhon’s reasoning, then, the capitalist too could not buy back the commodities with his profit. And how does Forcade solve this riddle? By means of a meaningless phrase: the growth of capital. Thus the continual growth of capital is also supposed to be substantiated, among other things, in that the analysis of commodity-prices, which is impossible for the political economist as regards a capital of 100, becomes superfluous in the case of a capital of 10,000. What would be said of a chemist, who, on being asked, How is it that the product of the soil contains more carbon than the soil? would answer: It comes from the continual increase in agricultural production. The well-meaning desire to discover in the bourgeois world the best of all possible worlds replaces in vulgar economy all need for love of truth and inclination for scientific investigation.”
As Marx notes,
“One may therefore imagine along with Adam Smith that constant capital is but an apparent element of commodity-value, which disappears in the total pattern. Thus, a further exchange takes place of variable capital for revenue. The labourer buys with his wages that portion of commodities which form his revenue. In this way he simultaneously replaces for the capitalist the money-form of variable capital. Finally: one portion of products which form constant capital is replaced in kind or through exchange by the producers of constant capital themselves; a process with which the consumers have nothing to do. When this is overlooked the impression is created that the revenue of consumers replaces the entire product, i.e., including the constant portion of value.”
(ibid)
Only in this way can the fallacy that GDP equals total output, equals total expenditure, equals total incomes (revenues) be purveyed in the identity formula of Keynes that Y = C + I, i.e. National Income (Y) equals consumption plus Net Investment, and Net Investment = planned savings, which equal National Income minus consumption spending.
Marx refutes this in Capital III, Chapter 49.
"The entire value portion of the annual product, then, which the labourer creates in the course of the year, is expressed in the annual value sum of the three revenues, the value of wages, profit, and rent. Evidently, therefore, the value of the constant portion of capital is not reproduced in the annually created value of product, for the wages are only equal to the value of the variable portion of capital advanced in production, and rent and profit are only equal to the surplus-value, the excess of value produced above the total value of advanced capital, which equals the value of the constant capital plus the value of the variable capital.
It is completely irrelevant to the problem to be solved here that a portion of the surplus-value converted into the form of profit and rent is not consumed as revenue, but is accumulated. That portion which is saved up as an accumulation fund serves to create new, additional capital, but not to replace the old capital, be it the component part of old capital laid out for labour-power or for means of labour. We may therefore assume here, for the sake of simplicity, that the revenue passes wholly into individual consumption. The difficulty is two-fold. On the one hand the value of the annual product, in which the revenues, wages, profit and rent, are consumed, contains a portion of value equal to the portion of value of constant capital used up in it. It contains this portion of value in addition to that portion which resolves itself into wages and that which resolves itself into profit and rent. Its value is therefore = wages + profit + rent + C (its constant portion of value). How can an annually produced value, which only = wages + profit + rent, buy a product the value of which = (wages + profit + rent) + C? How can the annually produced value buy a product which has a higher value than its own?"
Roberts then makes a comment that seems nonsensical.
“Over the longer term, growth in T tends to slow. Why? Because T is based on capitalist production for profit and, as capitalists tend to try and raise profits through mechanisation and the replacement of labour, there is a relative decline in new value produced (because only labour can create value, not machines).”
But, T, as Marx describes it in the Contribution stands for transactions, in other words, the physical quantity of commodities produced and circulated. Far from this number declining, it increases massively as a result of the rising productivity that capitalist production brings with it, precisely by the process Roberts describes of replacing labour with machines. The consequence of this increase in transactions is contradictory. In Theories of Surplus Value, examining Quesnay's Tableau Economique, Marx looks at the way commodities buy commodities, and so reduce the need for money. In other words, in the exchanges between farmers and industrial producers, the industrial producers buy agricultural products from farmers with money. Money is obviously required for this purchase. The farmers, then buy commodities from industrial producers, but no additional money is required for this because the farmers simply use the money they have received. In effect, they bought these industrial commodities with their own agricultural commodities.
What determines how much money is required, here? If, the industrial producers buy all of their requirements in one go, for the year, they will require money to that extent to buy these commodities from farmers. Let us say £1200. However, suppose the farmers supply £100 of agricultural products to the industrial producers each month. Now, the industrial producer needs only £100 in money. The farmers then use this £100 to buy industrial commodities, and having received it, the industrial producers use this £100 once more to buy agricultural commodities and so on. In other words, in the first instance, there are just two transactions, one the purchase and sale of £1200 of agricultural products, two the purchase and sale of £1200 of industrial products. £1200 was required to circulate this £2400 of value. In the second, instance, just £100, now acts to facilitate 24 transactions, and the same £2400 of value. In other words, it makes a difference whether a given quantity of commodities as exchanged in simultaneous transactions, each requiring currency, or in serial transactions, in which case a given amount of currency can also function several times.
But, the number of transactions is not just a function of the number of times the same total quantity might be divided into separate transactions, but is also a function of the total number of commodities produced, and exchanged. With rising productivity, this quantity necessarily rises, and so as Marx says, this expansion of the market, and of the range of commodities being traded also brings with it a much larger number of simultaneous transactions, each one requiring the currency to facilitate it.
No comments:
Post a Comment