- Capitalism and Alternatives -

Marxism served up fresh (daily)

Posted by: Stoller on January 11, 19100 at 21:03:35:

In Reply to: A bottom up approach? posted by Gee on January 11, 19100 at 14:54:38:

I believe that only the production process creates use-values; therefore, the circulation process can only add to capital investment (reducing profit). You, on the other hand, believe in the STV---so anything goes (for you)... But let's not rehash it all again...

: Produce toys at a New Jersey factory and see how much use a child in Seattle gets out of it without all the 'circulation' work. when the toy is bought in Seattle the whole package is bought - not just what rolled off the aseembly line.

OK, let's rehash it again...

Once upon a time commodity production was localized---small proprietors and all. Circulation, consequently, was localized. Therefore, circulation costs were nominal. The child in Jersey got toys made in Jersey; the child in Seattle got toys made in Seattle.

For the sake of theoretical clarity, I'm going to ask you to presuppose that the toys in Jersey and the toys in Seattle are of the same quality...

Then along came rationalized, centralized, merger capital. One big plant that produced a million toys (as well as food, TVs, religious experiences, etc., etc.) faster and cheaper than any small proprietor could. The merger capital company's toys, therefore, sold at lower prices than the small proprietor's ever could---and the small proprietors either go bust or are acquired by the merger company (same difference).

Nevertheless, the quality of the toys ARE THE SAME. The only reason the big company's toys are cheaper than the small proprietor's toys is due to rationalization, centralization, and 'economies of scale.'

Continuing... (If you read Marx like you say you did, you'll recall that he claimed that not all of production surplus is realized by production, some of it is 'sacrificed' to the retailer. What goes to the customer, in the final sale, is the TRUE VALUE of the commodity. This is an important point to keep in mind when considering circulation...)

So, the rationalized, centralized company makes toys at a lower cost, making a larger profit as well as selling toys at a lower price than the localized petty proprietors did. But competitive pressures result in the need for better accounting, advertising, and so forth; the market, ever expanding (due to the increased productivity that powers these lower production costs), requires faster delivery, further delivery. Hence, circulation costs increase.

Do these costs improve the toys in any way? No, these costs merely hasten the sale. Therefore (according to Marx's LTV) circulation costs CANNOT be 'passed on' to the customer, they must be absorbed into constant capital expenses. (Which necessitates further increases in productivity, i.e. cheaper labor costs per aliquot commodity.)

Recall this post:

The circulation sphere has been growing larger and larger since the universalization of computers... Once upon a time a businessperson made a sale without the highly developed network of computers and computer-based services ubiquitous today. Now these things must be added to the list of constant capital...

Marx stated in no uncertain terms:

The process of circulation is a phase of the total process of reproduction. But no value is produced in the process of circulation, and, therefore, no surplus-value. In fact, nothing occurs there outside the metamorphosis of commodities, and this has nothing to do as such either with the creation or changes of values [Marx, Capital volume three, International 1967, p. 279].

Thus, the growing circulation sphere brings us again to the problem of the organic composition of capital, the increasing reliance upon dead labor and the increasing reduction of living labor---which is the only thing that can create value---in the production of commodities. Put simply, it's costing more and more (in investment dollars) to realize the same buck as before (although, admittedly, the scope of accumulation continues to grow---for the moment). This redistribution of investment dollars, which threatens the rate of profit gained, is accompanied, not surprisingly, by lowering the standards of living for those amongst the proletariat who remain employed (as well as proletarianizing more and more of the 'middle class' supplanted more and more by the very machines they initially thought were so wonderful).

Marxist theory NEVER CLAIMED that circulation isn't (increasingly) vital to the reproduction of capital. It posits, however, that it ADDS NO VALUE---which is ultimately problematic for capital. If you read Capital you'd know this paradigm as the 'law of the tendency of the rate of profit to fall.' Which means capital, ever expanding its production and circulation (and costs) must ever squeeze labor (the only source of use-value creation).

But since you believe in the STV instead, all I've just said has been alien to you (I speak to the lurkers, you know)...

The 3rd World is being rapidly industrialized. Plants moving overseas and all that, right? Therefore the peasantry of the 3rd World is rapidly becoming proletarianized---which means revolutionary potential. Add to that the imperialist (labor aristocracy) implications of my production sphere / circulation sphere paradigm and you will see how the industrial development of the 3rd World will take a DIFFERENT course than ours did (having less affluence to bribe the workers). And then there's Russia, which is materially and politically READY for socialism...

: Lets sit back and wait for that to happen then - because I think they will simply 'go west' more than 'go marxist'. Russia though - thats a roller coaster ride after all those decades of rampant statist control of people. Might get some votes there.

Not everyone can 'go west.' The internal logic of capital must have wage-slaves and capital (intrinsically imperialistic) cannot afford to bribe the proletariat of EVERY country, 50 wages and all...

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