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On Thu, 24 Jun 1999 10:29:40 Doug Henwood wrote:
>Perhaps I didn't make myself clear. I find the basic Marxian categories,
>like the ones you name in the rest of your post, profoundly useful and true
>- but mainly as political categories. What I don't understand is the
>usefulness of a Shaikh/Tonak kind of exercise
The point you are missing is precisely a political one, the same Marxian categories that you find profoundly useful loose all meaning and political content if they are identified with conventional accounts. Take, for example, the work of Glyn and Sutcliffe in England during the 70's-80's. These well intentioned leftist economists believe that you can tell a Marxist story by using conventional accounts. They observed that the English economy was stagnat due to a fall in the rate of profit(r). They defined r as total profits/capital advanced, p/k which can also be expressed as r=(p/y)/(k/y) where p/y is the profit to wage ratio (the profit share) and k/y the capital-output ratio. Since they observed that k/y was constant and the p/y ratio was falling, they attributed the fall in the rate of profit to what they called a profit-squeeze by labor. According to their story, the English labor movement was so strong that it was able to squeeze profits, re-distributing income toward! s wages creating a fall in the profit share (p/w). The rate of exploition or the rate of surplus value (identified with the conventional account p/w) was therefore declining due to the strenght of the labor movement. In other words, the growth of the real wage was outpacing the growth of productivity (which implies that capitalist firms continue hiring workers althought they are loosing money, something that can only take place in the minds of economists). This was a great pro-labor leftist political story, strong labor kicking capitalist ass and signaling a new stage of capitalism, but the only problem was that about the same time M. Tatcher took over and destroyed most of labor's institutions. Well intentioned but errouneous theory with wacky accounts defeates its ownself.
What was wrong with their story? Looking at the same period using Marxian accounts (like Shaikh/Tonak) it shows that the rate of surplus value increased throughout the period, ie. productive workers were exploited at an increasing rate. The political story that follows is therefore one that instead of reflecting wishful thinking, reflects a crude and consistent reality, the increasing exploitation of the working class. Of course that these theory do not lead to nice political slogans or utopian dreams but provides you with a more realistic insight into the working of system.
So making the distinction between prod/unprod. labor does count from a political point of view. One version says that the labor movement is incredily strong because it sees a falling profit share ratio. Its political message works great for conservative economists who rush to recommend contractionary policies to avoid inflation. The other version doesn't get anybody in office and offers an ugly picture of capitalism where workers continue to be exploited. The political implication is simply that you better get busy organizing workers or things will continue getting worse.
So there you have your political stories, you choose.
Fabian
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