Before moving on to the second half of his critique of Arthur and Value-Form theory, I want to note a specific point he makes in a critique of Ben Fine and Alfredo Saad-Filho ("Production vs. Realisation: A Critique of Fine and Saad-Filho on Value Theory", Historical Materialism 15:4, 2007)
15:4 p. 151 fn 37
"In a critique of Chris Arthur’s distinctive variant of value-form theory, I have tried to
identify what I believe should be rejected in this tradition of Marx’s interpretation, and to clarify the value-form reading of Marx as the indispensable basis for the concepts of system, the
historical formation of systems, and the role of law-of-value selectivity (via capital allocation as
implemented by the financial system) for the concrete analysis of capitalism today. One of the
reasons for engaging with Arthur closely is that his stress on value-form explicitly allows a
conceptual space for price formation. Since I believe that price is a vitally necessary category in
Marxist political economy, Arthur’s work is relevant to concrete analysis of the law of motion of
capitalism today in a way that is not true of the commodity-fetishism accounts, such as those of
Georg Lukács or Moishe Postone which centre on a sociological account of reification. See
Kincaid 2005." [Italics mine - CDW]
This is a very important claim and I believe is relates fundamentally to Chris O'Kane's Doctoral Thesis and it's critique of Lukács and Postone.
An additional, very interesting point is raised by Kincaid in this article relative to the composition of capital, and while it is not immediately relevant to Chris Arthur or Chris O'Kane, it is relevant to my interests.
Starting on page 154, he is arguing that Fine and Saad-Filho's idea that the composition of capital, that is, the ration of means of production/labor involves and increasing ration of c (constant capital) over v (labor or variable capital), is incorrect on two levels. I believe he muddies two different aspects of c/v in his analysis, focusing only on c/v in terms of value. His goal is to show that a falling c/v is an effective counter-tendency to the tendency of the rate of profit to fall.
"Of course, Marx listed an array of countertendencies which act to raise the rate of profit or to slow its decline. But Fine and Saad-Filho want to relegate these to secondary influences. There is, however, one particular countertendency which poses a major difficulty for them. Productivity advance lowers the cost of production of the machines and raw materials used in production. If means of production are being cheapened in this way by technological progress, can we be sure that the composition of capital is actually going to rise, and so give rise a fundamental tendency for the
rate of profit to fall. Marx notes that if an increase in productivity cheapens the elements of constant capital, this acts as an offset to any rise in the capital-to-labour ratio.
Fine and Saad-Filho deal with this difficulty by arguing that such an effect of technological progress, in preventing the rate of profit from declining, would require a phase of market competition in which, over time, the price of machines and raw materials was forced down. Thus, if technological progress acts to raise the rate of profit, this can only be after market forces have played a role. Since their basic position is that market processes of value realisation are secondary to the essence of Marx’s political economy (a focus on production seen as an isolated moment in the circuit of capital), their view is that we can take as dominant the tendency for the capital-to-labour ratio to rise, and profit rates to fall as a result.
I believe that this argument cannot be sustained... 42
42. And, empirically, the trend in the recent period in the worldwide capital/labour ratio has been emphatically in the direction of more labour relative to capital. Richard Freeman estimates that ‘the entry of China, India and the former Soviet bloc into the global economy cut the global capital/output ratio by 55 per cent, to just 60 per cent of what it otherwise would have been’ (Freeman 2005, p. 1). Th ere is also much evidence that there have recently been extraordinary productivity advances in Department I (production of means of production). These have the effect of lowering the value of constant capital relative to variable capital."
The two paragraphs strike me as quite correct and succinct, and go to his point in this essay that valorization is both positing of value in production and realisation or actualization of value in exchange and that we can only discuss capital in the total cycle which includes therefore both production and circulation.
However, fn 42 gets dodgy. The "empirical" trend assumes that there has been an entry of effectively half the world's population into the world market only recently. Since all of these places were capitalist, it strikes me as at least a point needing to be proved that they entered, especially in the case of India.
Also, extraordinary advances in technology not only cheapen the means of production and raw materials, they also expel living labor from value-producing capitals.
In other words, even if the sheer number of workers employed globally were increased this dramatically, it does not imply that they will be uniformly employed in value-producing wage-labor.
He cites Freeman again in fn 46
"Richard Freeman of Harvard University estimates that the labour force available to global capital tripled from just under 1 billion workers in 1980 to over 3 billion in 2000. One factor was population increase in the poorer countries, already part of the capitalist system in 1980, especially in Africa and Latin America. A further 1.47 billion workers were added to the capitalist labour force by its incorporation of China, India and the former Soviet bloc. Freeman 2005."
This misses a wide array of specificities.
For example, Africa has been subject to de-industrialization for several decades and thus surplus-value producing labor has shrunk on the continent as the population has grown. Further, where direct investment from China, the new, major player in development in Africa, takes place, the labor used that is not unskilled is almost entirely Chinese workers.
This points to an additional issue: if the labor is cheaper in some places, this does not mean that the most advanced means of production are not employed, especially partially. Apple's outsourced productions facilities in China are an excellent example of this, where some automation and modern processes are simply unavoidable, while the cheapness of labor does allow for manual work that could otherwise be automated. China's steel industry has similar discontinuities that trouble the idea that a massive injection of new workers simply translates directly into cheap labor winning out over technology.
Some labor cannot be less technical or done without the most advanced means of production. You can't hand-build modern computer CPUs, even if you can hand-assemble motherboards.
Globally, this also misses the shift of the number of people subject to wage-labor in a "free market" (most workers in the former Soviet Bloc, China, and India, that is, non-subsistence farming populations were waged, that is, not serfs or slaves or something else) does not automatically entail access to wage-labor and certainly not to jobs producing value. More people subject to the need to engage in wage-labor in order to survive does not translate into more workers. In the present, it has been leading to a larger and larger population expelled from access to stable wage-labor (China and the former Soviet Bloc come to mind, as well as Africa and parts of most countries, highlighted in the European crisis in Spain, Portugal, Italy, Ireland, and Greece), up to an including a kind of permanent redundancy turning into lumpenization, rather than even being part of the "reserve army of labor".
In other words, Kincaid is citing Freeman to throw out big numbers loaded with unsustainable presuppositions.
This does not imply that the rate of profit will automatically fall for the reasons Fine and Saad-Filho believe, but rather there is a problem of successful valorization of value, that is, the realization of value on a sufficient scale through the exchange of commodities for money going back into the means of production and raw materials and the purchases of commodities by workers engaged in value-producing labor. Even with a fluctuating rate of profit (also uncritically stated by Kincaid, relying as his comment in the text does on the accuracy of rates of profit and the impact on actual measurability of rates of profit brought about by the Inconvertible Paper Money standard, or fiat money), crisis is really that of overaccumulation of capital, rather than simply the TRPTF.
Back to HM 13:2
100
"Abstract Labour and Money as Social Substances"
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