Letter: A Reconsideration of Surplus Value, Machines, and Profit

Date: 2022-09-20T15:24:25+00:00

Location: cosmonautmag.com

Dear Cosmonaut Magazine,

You recently published my letter in your magazine, in which I criticized Marx’s theory of profit and surplus value along the lines of Steve Keen, the post-Keynesian economist. Steve Keen – while he admires some aspects of Marx’s work, and even claims to found his post-Keynesian economics on allegedly Marxian axioms – rejects Marx’s theory of profit (and with it the theory of the falling rate of profit). According to Keen, it is an arbitrary assumption on Marx’s part that the machines (and other non-labour inputs of the capitalist production process) don’t create surplus value, but only transfer the value (socially necessary labour time) congealed in them. In my previous letter, I criticized the argument of Ian Wright, who defends Marx’s position with regard the machines. But thinking in a thoroughgoing way about these questions, and after I had read an article of Peter King and Arthur Ripstein, I came to different conclusions than those in my previous letter. Thus I would like to formulate my recent “more orthodox” Marxist position about the origins of surplus value and profits – and I hope I hope to receive some response to these. I still believe that Marx erred, or at least made an arbitrary assumption, when he supposed that machines don’t create new exchange value in capitalist production (of course, they create new use value). And neither Ian Wright’s nor other Marxists’ arguments have convinced me that living labour is the sole source of exchange value.1

However, the owners of the other – non-labour – inputs of the capitalist production process can – and mostly do – have their own share from the created surplus value, while the owners of the living labour – wage-workers – generally don’t. Capitalist generally don’t produce machines themselves, but buy them – mostly from other capitalists.  And they buy them at a price, which contains not only the value embodied in the machines but – generally – the whole, or a part of the new value, which will be created by the machines. For the capitalists  producing the machines assess – more or less exactly – the future value-creating capacity of the machines – and they ask a higher price for the machines from the buyers than the value embodied in them. In the opposite case, there would be no reason to sell the machines to the buyers. The machines are exchanged in the capitalist market OVER their value. Thus the capitalists must pay for the value created by the
machines. But they don’t have to pay the future surplus value created by living labour – because the “owners” of living labour – the proletarians – must sell their labour for them at its value, i.e. the value of the wage-goods necessary for the reproduction of themselves. Thus while machines generally are exchanged over their value, the labour congealed in them, units of living labour, generally, will be exchanged at their value. Thus the NET profit of the capitalists – the difference between their expenditure (constant capital expended for machines, and variable capital paid in the form of wages) and their profit is still created by the “theft of alien labour,” to using Marx’s phrase – the unpaid labour of the workers.  Machines create, of course, use value. Machines create – not necessarily, but very likely – exchange value, and thus surplus value for their owners. But machines generally don’t create UNPAID surplus value, because the capitalists who buy machines can’t coerce the sellers to sell the machines at a price corresponding their value (corresponding the quantity of work necessary to reproduce them), as they can (and must, for the sake of cutting their costs) coerce the workers, who had to sell their labour force.

This consideration vindicates  – for the most part – Marx’s theory of profit – and even his “law of the tendency of the profit to fall.”

In Solidarity,

Miklos Szalai

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  1. For example, the Marxist blogger Mathijs Krul’s response to Steve Keen: http://mccaine.org/2012/07/04/steve-keens-critique-of-marxs-theory-of-value-a-rejoinder/.