The conclusion of Smith's absurd dogma that the value of commodities/national output resolves entirely into revenues is that everything produced is consumed. That leaves no room for the reproduction of means of production. The basic equality between the value of output and revenues, and so aggregate supply and aggregate demand forms the basis of Say's Law that supply creates its own demand. It is also the basis of neoclassical economics and Austrian economics. Keynes recognised that not all revenues are consumed – there is saving. But, Keynes did not reject Say's Law, he merely modified it to take account of savings. He equates savings with investment, thereby, returning the overall balance of aggregate supply and demand, whilst also providing a fund for capital accumulation – net investment.
“The classic statement of Say's Law maintained the thesis that the free price system tends to provide a place for a growing population and an increase in capital. In an expanding society, new firms and new workers wedge their way into the productive process, not by supplanting others, but by offering their own products in exchange. The market is not regarded as fixed or limited – incapable of expansion. The market is as big as the volume of products offered in exchange. Supply creates its own demand. Viewed as a broad generalisation, this statement presents in the large a picture of the exchange economy... (p 4)
Keynes was careful to state that he was making no attack on the neoclassical theory of value and distribution. This part of classical theory had been erected, he said, 'with great care for logical consistency.' (p 19)”
(Alvin H. Hansen “A Guide To Keynes)
In an article by Michael Roberts some months ago, in the Weekly Worker, he attempted to explain the divergence between output value consisting of c + v + s, and GDP consisting of only revenues comprised of v + s, by equating the missing c with that portion of the total output that goes to capital accumulation. In other words, he basically accepted this argument of Keynes. He wrote,
“The demand for goods and services in a capitalist economy depends on the new value created by labour and appropriated by capital. Capital appropriates surplus value by exploiting labour-power and buys capital goods with that surplus value. Labour gets wages and buys necessities with those wages. Thus it is wages plus profits that determine demand (investment and consumption).”
That is pretty much a verbatim repetition of Smith's "absurd dogma", and of Say's Law as modified by Keynes. But, everything said so far shows this is wrong. It is right only in respect of consumption goods, and net investment. The demand for means of production, required to reproduce those consumed, does not at all, and cannot depend upon that new value created/revenues, but depends rather on the value preserved and transferred of existing constant capital, in the form of materials and wear and tear of fixed capital. In accepting the essentially Keynesian notion, Roberts evades the question of where that fund for the replacement of constant capital comes from.
As Marx says,
“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.” (p 834)
So, in order to summarise the process of social reproduction, Marx takes simple reproduction, with no accumulation, as the model, and it is in that context that this process can be seen clearly as one in which existing material balances must be replaced “on a like for like basis”. Marx restates the problem.
“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?” (p 834-5)
Marx also makes clear, here, that when considering this element of c, he is not including the value of fixed capital, or its residual value, i.e. that not consumed in production, but only the element of wear and tear of it. The element of c he is considering is only the wear and tear of fixed capital (which, as he describes in Theories of Surplus Value, Chapter 23 and in Capital III, Chapter 6, becomes a decreasing proportion of total output) and consumed materials (which form an ever increasing proportion of total output). So, on the other hand, this wear and tear and materials “must be replaced by an equivalent value. If not, then reproduction itself cannot take place on the former scale. But who is obliged to perform this labour, and who does perform it?” (p 835)
In fact, what Marx demonstrated in Volume II, and does so again, in Theories of Surplus Value, is that, although the use values are produced by current labour that labour does not and could not reproduce the value of that consumed constant capital, but merely preserves the value already contained in it. The current labour has a two-fold nature. On the one hand, as abstract labour it creates new value equal to the amount of labour undertaken, but even as it performs this labour, it operates also as concrete labour, creating new use values, by processing existing use values, and in so doing, preserves their value, and transfers it to the value of the new product.
So, in the schemas of reproduction, in Capital II, Chapter 20, the value of output is equal to three social working years. It is impossible for the abstract labour of one social working year to reproduce all of that value, and it doesn't. The value of 2 social working years comes not from current labour, as abstract labour, but merely from the transferred value of constant capital, i.e. mostly materials, preserved by the action of that labour as concrete labour. As Marx described in Capital I, this preservation of value by concrete labour is not a function of time, as with the case of the new value created by abstract labour.
“Who is obliged to pay for the constant portion of value contained in the product, and with what? — It is assumed that the value of constant capital consumed in production reappears as a part of the value of the product. This does not contradict the assumptions of the second difficulty. For it has already been demonstrated in Book I (Kap. V) [English edition: Ch. VII.—Ed.] ("The Labour Process and the Process of Producing Surplus-Value") how the old value remains simultaneously preserved in the product through the mere addition of new labour, although this does not reproduce the old value and does no more than add to it, creates merely additional value; but that this results from labour, not in so far as it is value-creating, i.e., labour in general, but in its function as definite productive labour.” (p 835-6)
No comments:
Post a Comment