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Introduction
Method1
1 For my exposition of the method of systematic dialectic, see my book: Arthur 2002a.
orthodox value theory, in which the magnitude of value correlates with time
measured by the clock. He argues convincingly that, although the innovating
capitalist loses much of his advantage, as competitors in the same sector
imitate the new productive force, there can be no such process of imitation
that is effective across sectors. Rather, what happens, he suggests, is that, in
the case where the increased productive power of labour is not costless, but
is linked to a higher capital composition, then a new general rate of profit
ensues, which retains within its generality a higher rate of surplus-value in the
innovative sector. Even if the average rate of surplus-value increases, through
the generation of relative surplus-value, the traditional sectors are penalised
through a lower than average rate for failing to potentiate social labour. But it is
important to see that, since the potentiation of labour in the innovative sector
generates more value than average during a constant working day, necessary
labour is thus compressed. This is not because the value of labour power falls;
so the extra surplus-value is a form of absolute surplus-value.
Reuten argues that the rate of surplus-value varies between sectors perman-
ently. This point chimes with something that has always intrigued me, namely
that little notice is taken in the literature of the fact that, as a consequence
of the transformation in value from the ‘simple prices’ of Capital i to the ‘pro-
duction prices’ of Capital iii, just such inequalities emerge even in Marx’s own
presentation. Marx argues from an impossible situation (adumbrated in Reu-
ten’s points a–e) to one that may never obtain empirically, but which, non-
etheless, tendentially finesses the original problem. In the first situation, he
assumes there are equal rates of surplus-value, and consequently unequal rates
of profit. In the second situation, there are equal rates of profit, and, I argue,
correspondingly unequal rates of surplus-value. Applying the rule of a uniform
rate of profit to generate production prices yields the result that there are now
unequal rates of surplus-value, in money terms. Thus, in Reuten’s Table 8.1, the
rate of surplus-value changes from 100 percent in every case beforehand, to
20/30, 20/20, and 20/10, after the ‘transfer’. (All these terms are in monetary
dimensions; Reuten correctly underlines the point that value is a monetary
variable. It is true that this monetary revaluation of the exploitation of labour
maintains untouched what may be called the physical rate, namely the labour-
time ‘embodied’ in the surplus product compared with that ‘embodied’ in the
real wage. I return to this in my last section.) So labour-intensive industries end
up with a low rate of surplus-value, and labour-saving sectors a high rate of
surplus-value.
In Reuten’s paper, it is said that Marx drops the assumption of sales at value.
Reuten prefers to retain this, and to drop Marx’s assumption of equal rates
of surplus-value. But as I have just pointed out, Marx implicitly drops equal
comment on geert reuten 199
rates of surplus-value also. It is not strictly true, therefore, that the premise of
equal rates of surplus-value is maintained throughout Marx’s transformation
procedure. I believe this is the main thing that worried him; for he was still at
that time influenced by the embodied labour reading of value to some extent.
Given this reading, the same physical rate of exploitation necessarily expressed
itself in the same value rate. So how could exchange at production prices ever
occur if price is simply the expression of labour time? Moreover it seems that,
since it is a premise of the problem that the same physical configuration is
maintained across the transformation, the rate of exploitation cannot change.
Yet, in money terms, which Marx knows is the only real existence of exchange
at value, it has! This is not merely an analytical problem but a conceptual one,
for it touches on the very nature of value and surplus-value.
The merit of Reuten’s approach is that inequality in rates of surplus-value
is derived, not as a consequence of the existence of differing capital compos-
itions, but as their very premise. Thus he reaches dynamically the same result
that Marx exhibits statically.
I now would like to add that this result may be illuminated by taking up the
category of time and relativising clock time. If value arises only during the time
of labour, it seems now that some times must count for more, even though the
workers on the shop-floor of different factories do not notice this consequence
of differently potentiated labours.
This has an intriguing analogy in the time paradoxes of relativity theory.
Processes have a homogeneous time dimension only relative to an inertial
frame of reference. If a spaceship leaves earth at a high speed, the time taken
to boil an egg in the spaceship will take the usual three or four minutes to the
cook; but to an observer located on the earth it will take longer. It counts for
more, so to speak, because time is dilated, so an hour on a moving spaceship
equates to many hours on earth.
By analogy, the time of production is not absolute; it is always measured in
the context of a common frame of reference. The comparison of the different
frames of reference for productive activity, predicated on different organic
compositions of capital, means that labour time in capital-intensive industries
is dilated relative to average and counts for more, while, conversely, labour time
in labour-intensive industries counts for less.3
I stress that these relative weights are social determinations; the workers
involved experience their labours in the same way because their frame of refer-
ence is the factory. Time on the factory floor seems unchanged to these workers,
but in the more productive sector there is ‘time dilation’ in that an hour ‘counts’
as more than an hour from the point of view of the fixation of time in value;
relative to the backward sectors that have failed to potentiate labour, each hour
in the advanced sector generates more value.
I turn now to what I call the ‘double duty’ of productive labour, which in
my opinion casts fresh light on the assumption of a uniform profit rate and the
distribution of surplus-value according to the size of capitals.
So-called ‘constant’ capital is treated far too casually, when deriving the
value of a commodity, if it is said the value of the constant capital is simply
carried forward to reappear in the value of a commodity. But it is not. It is
totally destroyed during the production process. The capitalist has undertaken
an enormous risk in sacrificing all his capital in this way. His constant capital is
all productively consumed. He can only pray that if his commodity is sold, and
sold at the right price, his capital is resurrected in new material shape. When
we look at capitalist production we find that two important things go on during
the valorisation process: as we know, new value is created, but as importantly,
and as a condition of that, the original capital value is recreated; it must be
resurrected in a reflux from its destruction. Thus living labour does ‘double
duty’, since it is not pure activity but work on materials with instruments
of production, both getting used up. It both generates new value, and, also,
resurrects in a new material shape the value of constant capital. That ability
to transform inputs into outputs such that their value is resurrected really is an
intensive dimension of labour’s value-generating power, according to the size
of the constant capital carried forward through its productive consumption
to the final commodity. The productive power of labour includes its power of
shifting constant capital to the final product such that it is renewed rather than
lost along with its consumption.4 Hence, in the process of value-determination,
labour may rightly be regarded, in a way, as the source of all the value embodied
in a commodity.
If a firm turns over more social capital per hour than average, it must be
rewarded accordingly, even if this changes its rate of surplus-value. It turns
over with greater momentum, so to speak. I conclude that the new rate is in
accordance with the concept of capital. Competition merely realises more or
less adequately the demands of the concept. Accumulation, as the life cycle of
capital, is a growing body of wealth, not a mechanical addition of dead value to
dead value.
In Capital i Marx claims that, beside time, intensity also determines the mag-
nitude of value created.5 Moreover he also thought that changes in the intensity
of labour are generalised across the economy through competition between
labourers. I doubt this latter point, but in any case I regard intensity as utterly
irrelevant to the determination of value magnitudes.
Remember workers do not commensurate their labours. It is capitals that
commensurate, and the only thing they care about is the time it takes to
produce and market a commodity. Intensity is not relevant as an additional
factor of which account must be taken. It is relevant only insofar as it reduces
the time embodied in each item because more are produced per hour. There
is no need at all to try to commensurate intensity across sectors. Moreover I
find the whole notion incomprehensible. How can the intensity of working
on a factory line be compared with the intensity of computer programming?
Concrete difference overwhelms any abstraction here. In sum, there is no way
of assessing the degree of intensity in a given sector except by reference to
its effect on the time taken per unit of output; no ‘intensive magnitudes of
5 Sadly, Marx’s view may be attributable to an ‘embodied labour’ approach, in which all the
‘effort’ of labour must be seen as embodied in the product; he was influenced by the new
science of physiology, which considered labour as a machine-like activity. In physics, the
‘work’ done is a function of ‘power’ and ‘time’. Insert ‘labour’ before each variable, and there
is a labour theory of value!
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labour’ are in reality compared across sectors; only time is compared. Of course,
within the same sector, intensities may well be comparable. Every capital tries
to reduce the time taken per unit of output, and one way of doing this is by
increasing the intensity of labour, but when the others in the sector catch up
the effect cancels out, price per unit drops, and the rate of surplus-value in
money terms remains the same. There is no need to worry about whether or not
intensity can be generalised across sectors, because capital takes no account of
it, it being already ‘taken care of’ in its effects on time.
So far in this section, I have been assuming a ‘pure case’ in which the capital
composition stays the same, for example, weeding, fruit picking, and so on,
in which the increase of the intensity of labour is costless. However, there are
many cases in which this is not so; for example, a worker previously attending
one machine is now required to look after two at once, evidently a more
onerous task. There is a corresponding reduction in the labour time to produce
each unit of output. Moreover the capital composition is increased. So we find
here the same result that Reuten argued for in treating the introduction of more
powerful machinery, namely that, if the capital composition in the sector is
higher than average, the rate of surplus-value must be higher in order to get
the general rate of profit. This case is different, however, because here it is
not that better machinery potentiates labour but that the same machinery is
potentiated by the extra effort brought to bear by labour, each machine now
absorbs less labour-time in operation. The new working day is ‘denser’, as Marx
would put it. And, in this sort of case, the rate of surplus-value in the sector
remains higher than average.
We see then there are three important paradigm cases:
Geert Reuten underlines that his is a single system approach. Because of this
it makes no sense at any stage to refer back to some sort of ‘labour values’ to
ascertain if conservation of aggregates is maintained. I disagree. First, let us
notice that, even where Marx’s aggregates are concerned, any transformation
will change the general rate of surplus-value, because at production prices
aggregate surplus-value and aggregate wages will normally differ from the same
magnitudes as they were expressed in simple immediate prices.
Such mediated realisation of value, and surplus-value, does not mean that
the measure of value in simple prices is irrelevant; it allows the proper measure
of the exploitation of labour by capital, because it is nothing but the physical
rate of exploitation expressed in virtual prices, albeit this moment is therewith
abstracted out from the whole picture. Moreover, this rate is of great interest
to both classes, and determined in the struggle at the point of production.6
Whatever the price rule actually in operation, this physical rate remains a
crucial underlying variable.
It is not just a question of abstracting out an important variable for study, for
this abstraction is rooted in the ontological duality characteristic of the capital
system. On the one hand, we have the material side of the economic metabol-
ism, of prime interest to workers; on the other we have the ideal side, predic-
ated on the self-movement of abstraction, wherein capital re-conceptualises
the material variables under its alien measures. Both material and ideal meas-
ures are equally valid. The consequence of this duality is that capital is ideally a
hegemonic totality, yet also vulnerable because of its dependence on material
factors such as the productive power of labour.
Reuten makes a good point, without noting its importance, when he says
that the final determination of the rate of surplus-value is of no importance
for the workers, and their own competition. It is ‘capital’s thing’, so to speak,
the outcome of capital’s competition. Thus the working of the system must be
appreciated from two class standpoints.
In my opinion, it is this ontological duality that leads Marx to talk vaguely
of the difference between appearance, and some underlying reality. However,
6 When I refer to the labour-time ratio as ‘physical exploitation’ I simply follow capital’s
concern with time as it is present in the pure capital relation. However, from the workers’
point of view, time may not be their only physical concern; for example, some miners
have to endure ‘wet-working’; this is surely experienced as more exploitative than usual,
although time, and hence value, are unaffected; moreover, capital may well ignore any ‘moral
obligation’ to pay compensation for it, pleading poverty.
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Conclusion