From pen-l (Mandel on "transition")

Jurriaan Bendien bendien at tomaatnet.nl
Sat Nov 8 13:55:21 MST 2003


(I posted this on PEN-L previously, but I have added a small bit to it)

In a paper he will give this Monday at the International Institute of Social
History in Amsterdam, LSE Professor Patrick O'Brien argues:

"With the aid of data (rarely cited by Mandel to support his
representations) European economic history has been reconfigured as one of
gradual and continuous rises in 'measured' rates of growth for agriculture,
industry, trade and urbanization which required some (but manageable)
uplifts in the rates of saving and investment.  Although discontinuities are
visible in records dramatic depictions of 'great divides', 'watersheds', and
'industrial revolutions' have all but disappeared from European economic
history. While the funding of transitions to urban industrial economies
seem, on close investigation into capital markets and financial
intermediation, have been handled without massive and abrupt resorts to
plunder overseas, or the mobilization of  reserve armies of dispossessed
peasants, artisans and workers in domestic manufacturing. Furthermore,
colonization and integration of Third World economies (with their abundant
supplies of cheap labour) was not required to stave off diminishing returns
to capital invested in Europe. After 1873 an increasing volume of investible
surpluses did migrate overseas but flowed overwhelmingly into regions of
white settlement and upon far too small a scale to mitigate ecological and
demographic constraints on development and structural change throughout the
Third World - and almost regardless of whether the regional and national
economies of Africa, Asia and Southern America happened to be nominally
independent or under imperial rule."

Source: http://www.iisg.nl/research/mandelprogram.html

I do not know whether he is correct about that - I haven't had the
opportunity to research it as I would like -  that's a scholarly argument
that must be tackled historically, empirically and quantitatively,
distinguishing sharply between waffly retrospective postmodernist
narratives, and solid objective analysis of historical facts, rejecting
arbitrary and philosophical-ideological strictures which legislate a priori
about all the things we cannot know about human history (only scholarly
investigation itself establishes the limits of what we can know within
specific areas; but since scholarly investigation may be a  competitive,
uncoordinated, politicised process, the limits of what we can and cannot
know may not even be correctly established, i.e. research doesn't occur in
outer space but in a social context where there are competing interests
which interfere with a common concern to establish objective truth about
human history).

Characteristic of Mandel is that he uses the rich heuristics which Marx
provides to develop far more theory than is actually disciplined by
empirical, historical and quantitative research, and that is partly due to
the pressures of his orthodox stance (Marx gave the answer already, he
explained it already, or at any rate we must consistently develop Marx's
idea) and partly his lifestyle (consistent lifelong participation in
political activism, which rarely permitted him to do sustained, systematic,
in depth empirical research). Often his analysis is therefore more of
heuristic, anecdotal, inspirational or methodological value than really
answering the question, because to answer the question would require a lot
of investigative work, a lot of research, causing some people to say that
his analysis was a bit shallow, a bit superficial because he doesn't do it.
I personally don't really think that was the problem so much, Mandel knew
far more than he could tell, I think it was more the conflict one encounters
between doing research and partisan ideologies encroaching on that research,
the logic of discovery versus the logic of justification; plus the view that
the orthodox Marxists had, about how you actually go about obtaining
knowledge of a kind that transforms the world. At the end of his little book
on Trotsky, Mandel remarks about the difficulty of realising a high level of
unity between theory and practice in a consistent way, even if you have good
organisation, and he remarked to me personally in 1984 that the best things
get done through team work, both politically and scientifically - but this
of course conflicts with the bourgeois-individualist norm of giving credit
only to private, individual research outside the capitalist workplace, and
admitting team-work only if there is a boss employing employees.

As regards myself, I would generally agree politically with Amin as against
the globalisationists, in scholarly terms I would have some differences of
emphasis, but okay, who cares. Specifically, the concept of transfer value
suggests a "transfer", i.e. an income which results out of a transaction in
the sphere of circulation, not directly related to production, which
therefore cannot be said to be part of the value-added, the new value
created. Nevertheless it represents a claim on the social surplus product. I
have not studied Amin's use of this term, but presumably he uses it to
restrict the concept of surplus-value to the new value added. If the
form of private appropriation is robbery and plunder, then new
tradeable values are created which do not arise out of capitalist
production or circulation itself, and I suppose you could also call that
a "transfer". At stake here
is the question of the distinction between the production of surplus-value
and the distribution of surplus value, and if you admit that unequal
exchange is an integral part of capitalist business operations (rather than
being satisfied with the abstract consideration by Marx of capitalist social
relations on the theoretical assumption of equal exchange), then it turns
out that production values can be modified very significantly in the sphere
of circulation, which raises the question of whether Marx is correct in
denying the creation of additional new value through exchange processes
only. This discussion becomes more prominent these days because, especially
after two decades of "liberalisation" of world trade, the financial circuit
has become increasingly semi-autonomous from the sphere of material
production, i.e. there is no longer any automatic relationship between
capital accumulation and net output growth of goods and services. But what
complicates the controversy is that operating financial trade is itself an
activity of "production", it takes a lot of work to operate and process
financial claims, and an increasing portion of employees in the developed
countries is exclusively preoccupied with the transfer and management of
financial claims to assets of any kind, which may be presented as "financial
products".

Following Marx and Engels, Mandel says that the law of value and the
category of surplus-value (the additional value, the incremental value, the
returns) are not specific to the capitalist mode of production, but rather
specific to the existence of trade and capital as such, and these categories
historically undergo metamorphoses and development, such that for example
the operation of the law of value in a ful-fledged capitalist society is
historifically specific and different from the way it operated in
pre-capitalist society, where trade did not dominate the entire production
process. In particular, in the end, in modern capitalism, it does not matter
anymore from the viewpoint of capitalists, morally or economically, whether
the net income is obtained from interest, profit or rent or some derivative,
the increase of fictitious capital encourages the fetishism of money, but at
this same time, this just shows that the category of surplus-value is
perfectly valid, i.e. the precise source of the net income which constitutes
a financial claim to the social surplus product is not what matters, it is
the ownership of the claim itself, based on private property, which matters.
So the very concept of surplus-value should not be taken as defined once and
for all, but seen as an historically evolving category.

Surplus-value comprises the sum of profits, interest and rent (plus derived
or intermediate forms which generate net income from property ownership),
but all these forms already existed long before the capitalist mode of
production existed, before commerce engulfed the entire production process.
But whatever else you may take the category of surplus-value to mean, it
refers to monetary claims to a fraction of the social surplus product, and
only when these claims are realised through private appropriation of goods
and services, it becomes truly visible what this means. However, a large
portion of financial claims these days exist as entitlements to future
appropriations to the social surplus product, and in that case the valuation
of production becomes much more difficult, because the financial claims to
the social product become dispersed and distorted in space and time, and it
is much more difficult to link the financial flows back to flows of goods
and services and back to the allocation of labour time. The only way in
which you resolve this issue, I think, is through a systematic quantitative
analysis of production and distribution of the world social product, but few
people do it, because they don't even know what the questions are that you
need to ask in this analysis.

But anyhow the main point to note is, that as Mandel himself says, in
bourgeois society the claims of property owners to the social surplus
product are never certain and guaranteed until they are realised, because
those claims are mediated by a competitive market. It is not sufficient for
surplus-value to be created in production, it must be realised in exchange,
and if it is not realised, the surplus-value is lost or destroyed. This is
an important observation that is not understood by fundamentalist Marxists
who just want to focus on "class struggle at the point of production", but
this fundamentalism is a departure from Marx who insists very specifically
that the capitalist mode of production must be understood as the "unity of
the production process and the circulation process", i.e. not just
production based on class-exploitation, but commercialised production. His
discussion of the capitalist production process and its social relations on
the assumption of unequal exchange, is intended to reveal precisely that
which the observable surface appearance of the competitive market hides or
inverts, and cannot reveal. Marx's analysis of capitalism is based on the
insight that goods must be valued before they are priced and exchanged, and
that the sale prices of products can in general only be definitely
established AFTER they are produced, a posteriori, they cannot be completely
known in advance of purchase and payment (even here there is a distinction),
and this uncertainty is founded on competition between privately owned
enterprises within the framework of an impersonal market to which they must
adjust. The bourgeois economists talk about "the market" in general as if
"the market" does something, "the state of the market""and so on, because
the reality is, that economic actors must adjust their own behaviour to the
market. But the followers of Marx know that "the market" is only the
appearance form, the mediation through which the law of value asserts itself
and works itself out such that the allocation of labour responds more or
less adequately to social needs. Bourgeois economists seek to extrapolate
future trends on the basis of an empiricist analysis of the observable
surface appearance of the competitive market, but Marx seeks to reveal the
social forces which drive the market long-term, i.e. how the law of value
specifically operates in a full-fledged capitalist economy, where most goods
and services are appropriated on a commercial basis.

The whole mystery about the "law of value" is only the result of the fact
that prices are definitely established only after the products to which they
refer have already been produced. And so von Bortciewicz faces the problem,
"how can you have an equation where inputs are values whereas outputs are
priced products ?". But this misunderstands the very nature of capitalism,
which creates a situation where products must be valued before they are
priced, and produced before they are exchanged, and priced before a definite
final price for the output is established in the sphere of circulation; the
consequence of which is, that values can only be established in principle
after prices are definitely established in a market where everybody tries to
adjust to price movements at the same time.

But the existence of this very market uncertainty makes Marx's total
analysis rather useless to capitalists, because their aim is to predict
price movements precisely in order to secure investements and privately
appropriate the maximum surplus-value. It is only useful to them insofar as
Marx reveals the social forces shaping aggregate prices and the
developmental dynamic of the system as a whole, i.e. the "social stability
of private accumulation question", more a concern for insurance analysts
really (it is not accidental that the economist J.J. van Duijn, who wrote
about the lomg waves, has been working as researcher for the insurance
business). But labour-values are for the most part rather useless to the
money-makers, and therefore the bourgeois economists say they do not need
this useless value theory, because everything can be talked about in terms
of prices, and if there is exploitation, this is not limited to the
production process. But as I pointed out to Justin again recently off-list,
this dismissal of value theory is a fraud, because even in just talking
about aggregate prices we are implicitly and necessarily referring to a
concept of economic value anyhow, and this concept of value can ultimately
only reduce to labour-time or to privately owned assets of any sort, since,
upon closer analysis, what a "price" actually is, is no more self-evident
than what economic value is, especially under conditions when a purchase no
longer automatically or immediately implies payment.

Marx wrote a very large manuscript on "Theories of Surplus-Value" in which
he demonstrates that the whole discussion about the "additional value, the
value-added" and where it originates from, the process of chrematistic
activity through trade is very old, and precedes industrial capitalism.
People were trying to theorise coherently about surplus-value long before
Marx tried to find the coherence in their discussion of it, but, unless you
subscribe to an idealist interpretation of history, you must admit that this
discussion in economic theory was based on the actual mind-independent
existence of specific trade relations, which gave rise to the category of
surplus-value in thought in the first place, the search for the sources of
the additional value and the sources of self-enrichment. The denial that
surplus-value existed also in pre-capitalist trade, and could be realised
through unequal exchange, carried out on the basis of private capital
ownership, turns the very origins of industrial capitalism into a mystery,
because it can no longer answer the question of how the relentless pursuit
of maximum surplus-value becomes generalised through the commercialisation
of production, and how it historically becomes the driving force of the
capitalist system. And the theoretical consequence of that error is also,
that it becomes impossible to understand how capitalism can be transcended
and transformed into a socialist society, how all the capacities that
already exist for a just, egalitarian society can be realised for that
purpose, or transformed for that purpose. It is just like the discussion
about imperialism: if the different sources of primitive accumulation are
mystified through excessive dogmatism, we are not even able to understand
the economic reasons which explain why rapacious acts of imperialism occur
under our very eyes. And, without the category of surplus-value, we can no
longer understand why economic growth took off tangentially since the first
quarter of the 19th century.

Personally, I believe that Mandel's own analysis contains indispensable
content which advances Marxian thought and should not be thrown out, but at
the same time, his analysis is distorted by ideological pressures, and just
like Marx's, incomplete. But his clear discussion of the relationships
between necessary social product and social surplus product, and how they
thus become monetized, relative and elastic, increasingly determined
directly by the intensity of class conflict, competition between private
property owners, and the accumulation process, is vital to the progress of
Marxian scholarship. Sometimes you have to defend Mandel against the
Mandelistas, and sometimes you have to criticise Mandel against the
Mandelistas. This point is of course lost to the ideologues and infantile
communists, who look for easy, cut-and-dried partititions between "good and
evil" theories viewed as having immediate ideological or political relevance
or implications, or sexy postmodernist narratives, but a genuine scholar
must distinguish between the search to discover the objective truth about a
question, and the justification of a political policy with an ideology. As
Marx himself says in the Preface to his magnum opus, "All scientific
criticism is welcome, but I do not cater to vulgar prejudices and deformed
ideologies arising out of the furies of private interests."

Jurriaan






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