ANOTHER INTERMISSION, THIS TIME TO REPLY TO SOME COMMENTS

Several of you, most notably David Palmeter, have raised questions to which I need to respond. The questions all concern matters that Marx discusses at length in Capital and which I have discussed in my books and articles, but I am afraid that in an effort to limit the length of this multipart essay I skipped over issues that I mistakenly assumed would be clear to the readers of this blog.

 

David Palmeter raises two different questions which require different answers. First of all, he asks what Marx has to say about labor that is not manual labor of the hammer – on – nail sort. Second, he asks about the labor of management performed by the owner of the company. Let me discuss each of these in turn.

 

Of course it is the case, as Marx and every other political economist was aware, that some of the labor required for the production of commodities was labor of design, planning, organization, of record-keeping, and so forth. Marx’s analysis applies exactly as directly to the office of an insurance company managing claims and keeping records, to a high-tech digital firm designing state-of-the-art iPhones, to for-profit hospitals, and to trucking companies as it does to companies that produce commodities on production lines dominated by relentlessly moving conveyor belts (think Lucille Ball making candies). The examples Marx gives in Capital are drawn from the Parliamentary Factory Inspectors Reports, which deal mostly with the factory production that dominated the English economy in the first three or four decades of the 19^th century, but everything in what he says can be more broadly applied.

 

There is one major shortcoming in Marx's discussion of capitalism that is in fact quite important, but I have chosen not to go into it here in the interest of brevity. Writing in 1860s England, Marx was convinced that he was seeing the progressive deskilling of the traditional crafts in the transformation of the working class into a mass of semiskilled factory workers. Marx failed to foresee that capitalism would develop a steeply pyramidal working class structure in which the employees of companies would be making anywhere from starvation wages to salaries that supported a lavish lifestyle. I have talked about this and other problems with Marx’s analysis in my essay “The Future of Socialism,” which you can find that box.net by following the link at the top of this blog.

 

The second question David asks concerns the compensation to the owners of the companies for the extremely valuable labor of oversight or management that they provide. This too is a question that Marx considers with some deliciously mocking remarks in the early chapters of Capital. This is a much more important issue because it touches on one of the most important ways in which modern capitalism successfully mystifies itself and misrepresents itself to even sophisticated onlookers.

 

The answer requires distinguishing two cases. The first case is the more traditional case in which an entrepreneur launches a company, hires labor, buys inputs, sets them all to work making commodities, sells the output in the marketplace and pockets a profit. Since the labor of management performed by the entrepreneur is essential to the enterprise, a part of what the entrepreneur takes home at the end of the year must be written up as his managerial salary, and in any well-run enterprise it will appear therefore on the books as one of the costs of production. But a little thought makes it obvious that in any well-run company that managerial salary will not be all that the owner takes home. When I taught a course on Marx at UNC Chapel Hill in the spring of 2020, I tried to illustrate this point by telling a story about the time that I lived in Northampton Massachusetts. Driving west out of Northampton and up into the hill towns of the Berkshires, I drove along the Mill River. At one point I came to an old mill on my left which in the 19^th century had been powered by the water rushing down the river but which was now converted to a number of little shops of the countercultural sort. On my right, across the street, were two large homes, virtually identical, each of which featured large garish white pillars. (I even managed to grab a screenshot of them from Google maps which I showed to the students.) The story was that one of the two homes was built by the owner of the mill and the other was built for his daughter when she got married. I made up a story that went something like this: the mill owner married his daughter off to an impecunious but wellborn young Boston man from an old Boston family. When he died, his daughter and her husband inherited the mill but the young man had no intention of actually working as the manager of the mill so he hired a paid manager at what was then the going market rate for middle managers, and then took his new wife off on a European tour. When he returned, he asked how much profit the manager had to turn over to him, and the manager said “why, sir, there is nothing at all.” Outraged, the young man asked how his hired manager had contrived to run the mill so badly and the manager replied, “I ran it exactly as efficiently and profitably as did your late father-in-law, but his profit was his salary which he earned for the labor of management and since you chose not to run the mill yourself you have paid all of that money to me.” Well, we all know, as did Marx, that the manager was just pulling his leg. Of course there is a profit left over after the salary of management has been added to all the other costs of running the mill.

 

Everyone is mesmerized by the extraordinary wealth of Jeff Bezos, who not only owns Amazon.com but started it and at least until recently ran it, but richer yet than Bezos is the Walton family whose collective wealth outstrips even his. These are the heirs to the fortune of Walmart, created by their father, Sam Walton. Unlike their late father, they provide little or no direction for this great company, but no defender of capitalism would suggest for a moment that therefore they have no right to the shares that they inherited.

 

In the balance sheet of a corporation, costs appear on the left-hand page and income appears on the right-hand page and when the two columns are added up, profit is what results from the first subtracted from the second.

 

But the modern corporation is not a business run by its owner. It is a joint stock corporation run by hired managers whose compensation is determined by a Board of Directors. What confuses things is that in a regular, systematic, unquestioned process of theft, a portion of the profits is directed away from the shareholders who are the owners of the corporation and into the pockets of the managers, who are paid vastly more than the going rate for managerial labor. To be sure, through the device of stock options, these managers often become the owners of very large stakes in the corporation, but they are not chosen as managers because they own large numbers of shares of stock – they own large numbers of shares of stock because they are employed as managers. Rex Tillerson is said to own $600 million in Exxon shares but he was not made CEO of Exxon because of that huge ownership share. Rather, his holding was the consequence of his rise to senior executive positions in the corporation.

 

The simple fact remains that capitalism is a system of economic organization that regularly, quietly, unremarkably transfers a portion of the annual collective social product into the hands of a small segment of the society who have come to own the means of production. As each year goes by, the owners of capital expand their ownership and thereby reinforce their control of the workers whose labor creates what they take as profit.

 

It is for this reason, Marx teaches us, that the essence of capitalism can be captured in a sentence of just nine words: capitalism rests on the exploitation of the working class.

 

Now, back to my exposition. Tomorrow things get genuinely complex and difficult.

MY UNDERSTANDING OF MARX PART VI

 

My Interpretation of the Thought of Karl Marx

 

Part Six: The Problem Ricardo Did Not See

 

Marx goes on for quite some time portraying commodities and commodity exchange in deliberately mystified and buffoonish ways. Those who are interested in exploring this in greater detail can take a look at my little book, Moneybags Must Be so Lucky. But let me move along with my exposition of Marx’s argument. You will recall that I said Marx chose to write volume 1 as though Ricardo’s simple Labor Theory of Value were correct because he thought there was a deeper problem that neither Ricardo nor any of the other classical political economists had recognized. The problem quite simply is that they are unable to explain why there is any profit at all in a capitalist system of the sort we are examining.

 

Entrepreneurs purchase the materials of production in the market, they combine them – or more precisely command that they be combined – in the factory, and then they bring the finished commodities back to the market to be sold. Assuming that commodities exchange in proportion to the quantities of labor directly or indirectly required for their production, labor that in Ricardo’s felicitous phrase is “embodied” in those commodities, it follows, or so it would seem, that the labor embodied in the output in any cycle of production exactly equals the labor embodied in the inputs and communicated by them to that output. So how is it that in England in the middle of the 19^th century, and indeed everywhere in the world then and since where capitalism rules, commodities are selling for more than what it costs to produce them so that normal efficient standard capitalists make a non – zero going profit rate on their invested capital?

 

Marx has some fun ridiculing the explanations offered by those whom he calls “vulgar economists”.  One common explanation was that the capitalists simply slapped 10% onto the cost of their production and charged more than they had paid for their inputs, but the geniuses who offered this as an explanation for profit neglected to note that the producers of the inputs would be doing the same thing so that there would be simply universal inflation but no profit. There were also some religiously minded political economists who suggested that the enormous profits manifestly being reaped by capitalists could be explained by their puritanical self-discipline in limiting their lifestyle so as to hold back a little bit as profit, what might be called the cheese – pairing explanation. But in fact neither Smith nor Ricardo had realized there was a problem to be solved here and so neither of them offered a coherent explanation for the existence of profit in a capitalist system. (I might note in passing, though it has nothing to do with the subject we are now discussing, that in the general equilibrium models so favored by the Nobel laureate neoclassical economists of the modern era the profit rate is also zero, but that seems not to trouble them in the slightest.)

 

Finally in the very last paragraph of chapter 5, Marx poses his problem. “Our friend, Moneybags, who as yet is only an embryo capitalist, must buy his commodities at their value, must sell them at their value, and yet at the end of the process must withdraw more value from circulation then he threw into it at starting.”

 

Just a word of comment about this translation from the German, which was done by Samuel Moore and Edward Aveling and overseen by Engels himself. The German for “moneybags” is “Geldbesitzer,” which simply means possessor of money.  But the German conveys the image of someone sitting on a bag of money, rather like the little capitalist in the top hat and cutaway coat on the card from the old Monopoly game. “Moneybags” is a brilliant translation that captures perfectly Marx’s mocking tone. It is for that reason – and there are many such examples in the early chapters of the book – that I prefer this old translation to newer translations which are strictly speaking closer to the text but lose all sense of irony, scorn, and mystification that are essential to an understanding of what Marx is about.

 

Immediately in the first paragraph of the next chapter Marx offers his solution to the problem he has posed. “(O)ur friend, Moneybags, must be so lucky as to find, within the sphere of circulation, in the market, a commodity, whose use – value possesses the peculiar property of being a source of value, whose actual consumption, therefore, is itself an embodiment of labor, and, consequently, a creation of value. The possessor of money does find on the market such a special commodity in capacity for labor or labor – power.”

 

The point is this: in a capitalist economy the workers are treated theoretically, although of course not in practice, as though they were petty capitalist producers of one more factor of production, namely labor. Assuming with Ricardo and with Marx in volume 1 that commodities exchange in proportion to the quantities of labor required for their production, the capitalist will buy this particular input into the productive process at a price proportional to the amount of labor required for its production and hence embodied in it. How much labor does it take to produce one day’s labor power? The answer is obvious. It takes as much labor as is required to produce the food, clothing, and shelter that the worker needs in order to make himself or herself ready to work for another day(plus a little bit for a depreciation fund, which is to say for the children.)

 

Now let us suppose with Marx that it takes six hours of labor somewhere in the entire economy, whether in the agricultural sector or the clothing sector or the housing sector, to produce one day’s food, clothing, and shelter. Then that is what the rational entrepreneur will pay. But he (it was usually he in those days) has purchased one day’s labor power and he can put that to work in his factory for 10 or 12 hours. In the first six hours that the worker labors, he or she compensates the entrepreneur for the money that the entrepreneur has laid out but what of those extra four or six hours? That extra labor or surplus labor confers additional value on the commodities being produced in the factory, and that extra or surplus value is the source of the capitalist’s profit. The problem has been solved.

 

This is a crazy way to talk! The worker is not a commodity producer like a farmer or tailor or silversmith! Exactly so! But capitalism treats the worker as though he or she were just that and therein lies both the craziness, the mystification, the verücktheit of capitalism and the secret of its fundamental nature, which is Exploitation.

MY U.NDERSTANDING OF MARX PART FIVE

 

My Interpretation of the Thought of Karl Marx

 

Part Five: The Mysterious Nature of Commodities

 

(I refer interested readers to my book Moneybags Must Be so Lucky for a more detailed discussion of what follows.)

 

In the simple case to which Marx is restricted himself in volume 1, commodities according to Ricardo exchange in proportion to the quantities of labor required directly or indirectly for their production, or what came to be called “embodied labor.” But if we think about that for a moment we realize there is a very elementary problem. Suppose that we are talking about the exchange of 10 yards of woolen cloth for a wooden chair. The labor required to produce the woolen cloth is quite different from the labor required to produce the chair. Making the woolen cloth involves shearing sheep, washing and drying wool, carding the wool, spinning it into thread, weaving the thread into cloth, and cutting the cloth into a piece 10 yards long. Making the chair involves sawing wood, turning it on a lathe, sanding it, nailing it or joining it with pegs, and so forth. Clearly if we are to compare the labor that produced the cloth with the labor that produced the chair we must abstract from all of these differences. So at the very least, we must be claiming that the wool and the chair exchange in proportion to the quantities of abstract labor required for their production.

 

Now then, Marx writes in the famously mysterious section 4 of chapter 1 The Fetishism of Commodities and the Secret Thereof, “when I state that coats or boots stand in a relation to linen, because it is the universal incarnation of abstract human labor, the absurdity of the statement is self-evident.” Marx goes on: “nevertheless, when the producers of coats and boots compare those articles with linen, or, what is the same thing, with gold or silver, as the universal equivalent, they express the relation between their own private labor and the collective labor of society in the same absurd form.”

 

But even this is not enough to capture what is mysterious about Ricardo’s seemingly transparently clear theory. For not all abstract labor counts when we are comparing boots and linen or wool and chairs. Suppose that a chair has been made by an apprentice carpenter who has not yet learned the trade. That young man (carpenters were always men in those days) might spend 10 hours making a chair that a master carpenter could make in five. The buyers of chairs in the market would laugh at a carpenter who charged a higher price for chair because it had taken his apprentice longer to make. Only such labor as is “socially necessary” at any given stage in technological development counts when calculating the relative price of goods in the marketplace. Indeed, the problem is more complex even than I have suggested. Suppose that the carpenters making the chairs are averagely expert in their woodworking skills but find themselves under the direction of a novice manager who has not yet mastered the technique of combining the labor available to him in an averagely efficient manner. The time spent by the carpenters making the chairs may be devalued not because of any lack of skill on their part but because of problems elsewhere in the firm.

 

Thus, when Ricardo says that in the simple case (remember, we are still in volume 1) goods exchange in proportion to the quantities of labor directly and indirectly required for their production, he must be interpreted as actually meaning (although he himself failed to recognize this fact) that goods exchange in the market in proportion to the quantities of abstract socially necessary labor embodied in them.

 

Such talk is, Marx argues, thoroughgoingly mystified but, he insists, we must not commit the error of supposing that it is therefore mistaken. Quite to the contrary. In the paragraph immediately following the one from which I quoted above, Marx writes “the categories of bourgeois economy consists of such like forms. They are forms of thought expressing with social validity the conditions and relations of a definite historically determined mode of production, viz., the production of commodities. The whole mystery of commodities, all the magic and necromancy that surrounds the products of labor as long as they take the form of commodities, vanishes therefore, so soon as we come to other forms of production.”

 

What does Marx mean when he says that this absurd form of thought has social validity? His meaning is profound and goes to the heart of his critique of capitalism. The form of thought whose absurdity he has just revealed has social validity both on the side of the capitalist and on the side of the worker. This mode of thought has social validity for the capitalist because only by conforming his thought and action to it can he function in a competitive marketplace and earn the going rate of return on his investment. If he makes the mistake of thinking of these commodities actually as useful objects made by the labor of real men and women and designed to satisfy human needs, he may become distracted by the reality of the factory or workplace and find himself lavishing more labor on a fabric than will be justified in the market by the price he can get for it. As I say in Moneybags, he will become like a tailor seduced by the feel of fine cloth between his fingers or like a whiskey priest drunk on sacramental wine.

 

On the side of the workers, the necessity that they stifle their natural desires, instincts, and creative efforts in their labor in order to work steadily, efficiently, and in a fashion that produces an adequate profit for their employers will of course have a severely destructive effect on their human being. But in so far as they yield to that necessity and even embrace it, they will be sought after by employers, praised by their families as good workers, blessed by their priests, and even publicly celebrated as Stakhanovites. 

 

Thus the capitalist way of viewing productive labor, assumed without question by Ricardo or the other classical Political Economists, is a form of thought that has, in Marx’s felicitous phrase, “social validity,” despite being absurd.

DOUR REFLECTIONS

(1) I have been spending a good deal of time watching the trial of Derek Chauvin, the police officer who killed George Floyd by leaning on his neck with his knee for nine minutes. It is enormously upsetting. It is also quite astonishing. I have never seen or read of a trial in which the crime was so meticulously recorded on videotape from many different angles. It is even the case that the police hierarchy has decided to throw Chauvin under the bus. If the jury does not bring in a guilty verdict this country is going to erupt and so it should.

 

(2) Well, I have completely struck out in my effort to arrange to teach my course on Marx, Freud, and Marcuse next year. I approached the philosophy department at Columbia at the suggestion of a senior member of that department to ask whether they would be willing to host the course. I was not asking them to pay for the course – that I could arrange through the Society of Senior Scholars. The negative response I got from the chair, after she had brought the proposal before the department, was oddly hostile and defensive. I have no idea what is going on but it was a flat rejection that, according to the chair, was “not negotiable.” I very much fear that like a loaf of stale bread or a pound of rancid butter, I have passed my sell – by date. As at least some of my blog readers will understand, this is not cheerful news to receive when you are 87.

 

(3) Paris remains closed and as the days pass I grow anxious about whether we will be able to return one more time in June or July before selling our apartment. I seek out Netflix miniseries set in Paris and binge watch them, but it is not the same, alas.

BRIEF CLARIFICATION

 Several commentators have raised the question whether modern economists use the concept of natural price. The answer is yes. They all use it, but they do not call it "natural price." They call it "equilibrium price." Of course they have a different theory of the concept but it is the same idea. That is one reason why Adam Smith can be viewed as the grandfather of modern economic theory as well as the father of classical political economy.

MY UNDERSTANDING OF MARX PART IV

 

My interpretation of the thought of Karl Marx

 

Part Four: The Church and the Supermarket

 

As we begin to read Volume 1 of Capital, we must recall that half a century has passed since the publication of Ricardo’s Principles. If I may adopt a lovely trope used to such great effect by Thomas Piketty, the England of David Ricardo was Jane Austen’s England, whereas the England of Karl Marx was Charles Dickens’ England. In the intervening 50 years, factories had sprouted up not only in the north of England but in London as well and a large working class of low-paid factory workers had absorbed some but by no means all of the population that had flooded into the cities as a consequence of the enclosure of agricultural land to make way for herds of sheep.

 

The subtitle of the entire three volume work, Capital, is A Critique of Political Economy. It is not merely capitalism itself but the ruling theories of capitalism that are the object of Marx’s devastating criticism. Marx, who had steeped himself for almost 20 years in the economic literature written in German, French, English, Italian, and Spanish, was well aware of the theoretical problem about differing capital and labor intensities that Ricardo had failed to solve. Marx believed that he had found the solution of that problem, but nevertheless he wrote the entire text of volume 1 of Capital as though Ricardo’s theory of embodied labor was correct as stated. A puzzling decision. It was not until volume 3 that Marx would explain his solution of Ricardo’s problem. Why make so odd a choice?

 

The reason is twofold: first, Marx saw a problem lying at the very heart of political economy so fundamental that it had to be confronted and analyzed and solved before he could address the relatively less important problem that had stumped Ricardo; and second, Marx believed that he could successfully analyze capitalism only if he challenged the foundational assumption on which all of Political Economy rested, namely, to put it as simply as I can, that capitalism was what it seemed to be. Capitalism, Marx was convinced, was deeply mystified and in the process of its demystification the problem would emerge that neither Ricardo nor Smith or any of their lesser fellow economists had ever conceived or understood.

 

To begin our confrontation with the puzzling language and profoundly original doctrines of volume one, let us make two visits, first to a Catholic cathedral in 19^th century Germany or France or England, and then to a modern American supermarket. Since the closest supermarket to my home here in North Carolina is a Food Lion, let that be where we make our visit.

 

Before we even enter the Cathedral we must be sure to put on our best clothes for one ought not to enter a church as if one were going to the beach. The Cathedral is the tallest building in the city. It is quiet inside and dimly lit by light filtering through stained-glass windows high above and by banks of candles. In alcoves to the side parishioners kneel in silent prayer. The Cathedral is attended by men wearing robes tricked out in iconic symbols. They speak softly in a language that the common people do not understand. Far down the aisle opposite the entrance is a brightly lit altar. It is here that a priest presides at a miraculous event. When the priest utters incomprehensible incantations and raises high above his head first a dish containing wafers and then a goblet containing wine, God Almighty performs a miraculous transformation, turning the wafers into the body of Jesus Christ and the wine into the blood of Christ. This transformation is doubly miraculous, for although the substance of the wafer is transformed into the body of Christ and the substance of the wine is transformed into the blood of Christ, the accidents of the wafers and wine are not altered. They smell the same, they feel the same, they look the same, they taste the same, but by the intervention of Almighty God they have become the body and the blood of Christ. This Is the Miracle of Transubstantiation, a miracle performed by God in every Catholic Church in the world during every mass that is celebrated.

 

Everything about the church and what happens there is designed to create awe and wonder in the common folk who come to attend service. From childhood they are taught to revere the priests, to stand in awe of them, to submit to them, to obey them.

 

These are the mysteries that the Enlightenment worked so hard to expose as false and meretricious.

 

Now let us visit my local Food Lion, which will stand in for any market in the modern world. There is no need to wear special clothing when visiting the Food Lion.  Shorts, a T-shirt, and flip-flops will suffice. The store is as large as a cathedral but in every other way differs completely. It has a flat ceiling and is brightly lit without a shadow-darkened apse anywhere. Rows of shelves are piled high with groceries. The people working in the store look just like me and they speak English in the local accent. They are friendly, accommodating, and welcoming. As Marx says at the end of chapter 6, “There alone rule Freedom, Equality, Property and Bentham.”

 

There are puzzles in the Food Lion, to be sure – where are the fresh fruits and vegetables, which aisle has the soups? But there are no mysteries, nothing to inspire fear or awe or humility. Everything is just exactly as it seems.

 

And yet. AND YET. Marx is convinced that there is more mystery in a grocery store than in a cathedral! He is convinced that nothing is as it seems, nothing is simple, everything is clothed in mystery. Indeed, in a brilliant philosophical tour de force that would have made Hegel proud, Marx actually suggests that the simple process of exchanging one commodity for another is nothing less than the inversion of the Catholic miracle of transubstantiation. In the miracle of transubstantiation the substance of the wafer and wine are transformed into the body and blood of Christ while the accidents of the wafer and wine, their taste and feel and look and smell, remain unaltered. In the exchange in the market of a package of wafers for a carafe of wine, the quantum of embodied labor contained in each, their substance as commodities, remains unchanged – for their labor value is their substance to the capitalists and you will recall that in volume 1 equals are exchanged for equals –while the accidents of the wafers are completely altered into those of the wine.

 

And now we can see the problem Marx confronted in writing the opening chapters of Capital. When Voltaire undertook to demystify the church, he did not first have to persuade its communicants of its mystery. That was immediately obvious to them. But before Marx can demystify commodity exchange and with it capitalism, he must persuade the political economists and his lay readers that there is more mystery in the marketplace than at the altar, more mystification in the writings of the Political Economists than in the sacred texts of the Old and New Testaments.

 

 

INTERMISSION

 

Intermission

 

Several people have raised important questions about the materials of the first several parts of this extended essay and I thought it would be helpful to address some of them before continuing. The first thing to understand is that Smith, Ricardo, Marx, and the lesser political economists of the classical period all assumed more or less without argument that prices in the marketplace for commodities, for inputs into the production of commodities, and also for labor were regulated by competition in the absence of governmental rules fixing prices by fiat. They also assumed that entrepreneurs – what we would call capitalists – were motivated more or less single-mindedly by a pursuit of the greatest possible profit on the investments they made in their enterprises. This meant that they were assumed not to have traditional, religious, or personal preferences for one technique of production rather than another, the production of one commodity rather than another, or for the hiring of laborers of one racial, religious, or other character rather than another. The implication of these assumptions, which they all accepted without question, was that workers would go where they could get the highest wages, sellers in the market would sell to whomever offered the highest price, and capitalists would switch their investments from one line of production to another in so far as they could in pursuit of a higher rate of return on invested capital. They also assumed, without much discussion, that capitalists were rational calculators capable of figuring out, with available resources and techniques, how best to maximize their rate of return.

 

In addition, the classical political economists tended to suppose that there was one obviously best technique for the production of each commodity and that the information required by buyers, sellers, workers, and producers to make rationally self-interested decisions was readily available to all.

 

There were a number of implications of these pretty much unquestioned assumptions and they seem to have been obvious to Smith, Ricardo, and their fellow political economists. One implication was that capitalists would transfer their investments from one line of production to another solely as a consequence of their calculation of relative profitability rather than as a consequence of personal or family or national or religious or other traditions and preferences.

 

The second implication was that a rational capitalist would always take into account not only how much more his output sold for than was invested in the inputs of production but also how long the production process took.  Profit was calculated as a percentage return on investment per annum. Thus, if one technique of production of a given commodity took three months from the start of the process until the commodity could be brought to market and sold whereas another technique involving, perhaps, tools and materials of the same cost, required six months brfore the commodity could be brought to market, a rational capitalist would take this into account and recognize that tying up his money in materials and tools for a longer period of time was more costly and therefore could only be justified by selling the output at a correspondingly higher price. This is what Smith had in mind when he observed that the “accumulation of stock” posed a problem for the Labor Theory of Natural Price.

 

Third, Smith, Ricardo, Marx, and the other early political economists took it for granted without much discussion that at any stage in the development of capitalism in each line of production there was one dominant technique that was obviously more profitable than the others and to which rational capitalists would gravitate. By the time Mark was writing, capitalist techniques of production had developed to the point at which this may not have been quite true but very little attention was paid to this fact.

 

Finally, although everybody knew that there were skilled craftsmen in certain lines of production whose labor was more productive and hence more valuable, not much thought was given to how to deal with the distinction between unskilled, semiskilled, and skilled labor. Marx at several points chooses simply to treat skilled labor as a multiple of unskilled labor, as though a skilled weaver could be treated as interchangeable with several unskilled weavers. This was clearly not true and eventually economists began to pay a great deal of attention to the issue of variations in levels of skill among workers, but it plays no important role in Marx’s theories, so I will ignore it here.

 

I hope this helps. Now let me continue with part four of my essay, which as promised will begin with a trip to the supermarket.