Value (to John Ernst 3/4)

Juan Inigo jinigo at
Wed Nov 15 11:35:07 MST 1995

John Ernst writes:

>Your post reproduced below is simply absurd. You have just
>defended in our own unique fashion the neo-Ricardian
>view of value.  You do not even know it.  You mount
>some high horse about ideal  and abstract and yammer
>away.   Now that I have vented, let's return to basics.

John's impotence to rationally deal with my arguments let this bad air out.
But, is it just that John's mind has farted or is it that his ideas always
smell like that? Let's see if what he understands for "basics" is not
another collection of abstract assertions and open negations of reality.

>1. Note that in example, I asked Jim about, I said nothing
>    about a drop in price.  Like Marx, I am unwilling to simply
>    assume that such dramatic drops take place. Thus,
>    I never assumed anything about a fall in price.  You did.
>    Why should it fall?  Because something called an LTV
>    tells us it will fall?   Nonsense.  We, adherents to Marx's
>    theory, have to show the how and why of the drop
>    in price takes place as the law of value takes control
>    of matters behind the backs of the producers.

John wants to have an increase in productivity but not a decrease in price,
in the name of ... Marx?! Or is it just in the name of the abstractions he
wants to adhere to? Let us go step by step.

In the first place, what are these prices John refers to? Are they prices
of production? John's own example says they are not, since he has
completely developed it without  including any mediation of total social
capital in the appropriation of surplus-value. Moreover, he explicitly
pointed out that he was leaving such mediation out of the point, since, in
his capitalistic mood, _he_ would directly appropriate the surplus-value
created by _his_ workers:

>If my
>workers only created $50 in surplus value, I would be
>short $250 as I gain $50.

A fortiori, John could not have been referring, for instance, to the
mediation of the differential ground-rent in the determination of prices
when productivity changes in the corresponding specific spheres of
production (Chapter 46, Capital III).

So John's prices are no less but no more than the expressions of value in
money. So to go back to basics here means to follow the determinations of
the value of commodities by the increase in the productivity of labor. And
this is exactly what I did in my post that makes John's impotence for
rational arguing explode. Did I resort anywhere in my post to a LTV? No, I
just followed the path originally opened by Marx by facing the simplest
form of our general social relation, commodities, and developing what
specifically concerns the change in productivity in the briefest way that
fits in the e-mail. And, of course, how and why the increase in the
productivity of labor has an inverse effect on the unitary value of a
commodity is not only something that becomes evident from the very first
step (chapter 1) but that constantly reappears all along Capital from books
I through III.

If John disagreed with the development I presented in my post, he should
have pointed out exactly where it was going wrong, or even where it
disagreed with Marx's. Moreover, if he disagrees with the fact that Marx
constantly makes explicit the necessary inverse relation between
productivity and unitary value, John should start by showing how
productivity and, first of all, value, are determined in the real world
beyond his fantasies.

Now, should I tell John: read Marx from the beginning to the end? I don't
suffer from the necessity to replace what needs to be rationally argued
with such pedantic assertions.

"We, adherents to Marx's theory, have to show ...", yes indeed! Just
another abstraction.

>2. You mention the notion of "moral depreciation."  The concept
>    itself is rather underdeveloped in Marx.  When he does intro-
>    duce the notion in Chapter 15 of Book I of CAPITAL, he
>    notes that capitalists allow for it in determining how long a
>    machine will be of use to them.  I will not say that that has
>    nothing to do with technical change, but it is unclear what
>    you are talking about in the case in question as no price
>    change is specified.  Thus, if you are going to refer to
>    accountants, you should at least note that they would
>    be concerned about changes in prices.  Since we do
>    not have any idea about why there would be a price
>    change in this case, your references to accounting
>    practices seem, at best, premature and, at worst,
>    absurd.

In the first place, I didn't base my reply to John in a "mention" of the
notion of moral depreciation. I developed in my post, starting from their
simplest form, the determinations of the increase in the productivity of
labor that result in what under capitalism takes the concrete shape of
"moral depreciation." Again, John should have shown where my development
was mistaken, and where it has departed from Marx's own one. But he can't.
So he tries to bring everything down to a "notion" that he claims is
"rather underdeveloped in Marx." On doing so, John presents us with the
perfect synthesis of his "ideal" abstract method:

In Section 2 of Chapter 15 (English edition, 13 in the rest I have
mentioned in my previous post), Marx develops how the introduction of
machines produces an increase in productivity and thus lowers the prices of
commodities vis a vis simple cooperation and manufacture, by lowering the
amount of living labor materialized in each unit produced beyond the
additional amount of dead labor needed to achieve the increase in
productivity. He advances then into the specifically capitalist
determinations that limit the introduction of machinery beyond that general
unavoidable condition. So, to claim that Marx faces the question of moral
depreciation leaving "unclear" or "unspecified" what happens with the
prices of commodities when productive increases in capitalism, John needs
not only to abstract from the whole development from Chapter 1 through 12,
but to abstract from the very Chapter he is supposedly referring to. And
John has of course to abstract from what follows from this chapter on. In
Chapter 6 Capital III, "The effect of price fluctuations," Marx follows the
development of his "rather undeveloped" "concept" of moral depreciation to
the stage where the capacity of capital for valorizing itself starts to
appear as a purely formal relation between profit and total capital. At
this point, Marx says:

"... moral depreciation. ... there arises a similar depreciation due to the
improvements in the methods of reproducing this fixed capital. The value of
the machinery, etc., falls in this case no so much because the machinery is
rapidly crowded out and depreciated to a certain degree by new and more
productive machinery, etc., but because it can be reproduced more cheaply."

Even accountants are specifically taught the facts of moral depreciation
originated in the increase in productivity in the spheres that produce
means of production. Of course, they are taught to start from the crude
appearance that productivity is an attribute not inherent in labor but in
total capital. So, contrary to John who does "not have any idea about why
there would be a price change in this case," accountants do know that
"technological change" makes prices fall. And they do know that when the
market price of a means of production has fallen bellow the cost once paid
for it, this fall must be immediately registered on the books. Of course,
accountants are taught this not just because. They are taught about the
facts of moral depreciation because they must reflect it in the way needed
by the operative agents of the individual capitals to properly rule their
everyday practical action. If any accountant is unfortunate enough not to
know the facts of moral depreciation, capital teaches them to her/him in a
further practical way: it "morally depreciates" him/her by throwing him/her
to the streets as soon as someone discovers that the supposed untouched
original capital registered on the books has actually vanished without
notice, since it can be replaced with much cheaper means of production
thanks to "technological change."

But economists have a rather different role to play. Only an economist can
invert the real facts, to negate reality as soon as it does not fit in
his/her model. So, in the kingdom of ideology, what can all those real
facts of moral depreciation weight against John's "ideal" method of
abstracting one real form after the other to make their caricature fit into
his model? It happens that any reference to John's ideal method being
concerned with real forms and not with abstractions "seem(s), at best,
premature and, at worst, absurd."

I will complete my reply later.

Juan Inigo
jinigo at

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