World Systems Network: The “unequal exchange” thread, July 1998

6 posts of mine, recovered from the sent mail of the period

The World Systems Network list at the University of Colorado. Six interventions in one thread on unequal exchange and declining standards, in English. Quoted text from other people has been removed, so some replies start mid-argument; other people’s addresses are omitted. The posts were public on the list when written.

585 BC:

"The philosopher and the physicist of today share another common link:
the same man, Thales of
Miletus, is claimed by each as the FATHER of his profession. His
biographer, Diogenes Laertius,
narrated anecdotes about him which are worthy of mention for the sake of
tradition rather than
fact. Two of these anecdotes are quite famous, namely, that he fell into
a well or irrigation ditch
while star-gazing, and that, predicting a scarcity of olives, he
cornered the olive market"

"One time when Thales was still poor, Thales was talking to a friend who
was
just as poor as he. His friend moaned and groaned about how hard it was
to
be poor and how he'd be poor the rest of his life. Thales said it would
be easy
to become rich. He told his friend to come back and visit him in six
months.
In six months when his friend returned he was astonished to see Thales
the
richest man in town. Thales told his friend how he foresaw a bumper crop
and bought all the olive presses. He rented them back to the same people
that sold them to him and made a fortune. More interested in the science
than the money he sold them all back eventually"

Well, I have heard more versions of the history, for instance one in
which he
only buys the rights to use the presses that year.

Still, I'd like to hear more about this issue of "surplus
labour as origin of capital accumulation", even after
reading the long posting from Andy, it seems to me a
combination of two mistakes.

Actually, I can imagine systems where additional labour drives
the owner to benefit loss, due to the offer/demand mechanism.
So "surplus" labour, if it exists, is different of additional
labour. Similarly, I can imagine porcess where an actual
decrease of labour time would increment owner benefits, so
"surplus" labour could be less labour!

As for capital accumulation, while I can imagine such concept,
the use given in Andy post sounds, so to say, as "flogisto
theory". I can not see why the interaction of capital with
itself is forbidden to produce additional capital. If the
argument is about conservation laws, the only one Nature
accepts is energy, and well, capital can stole energy from
a variety of sources, human work being only one of them.

Yours,

					Alejandro

"produces more than it consumes" implies you are able to compare two
quantities. You can say "produces more energy than it consumes", or
"produces more grain than it consumes", but no "produces more apples
than the meat it consumes".

To solve this you can say "produces more capital than
it consumes", and then you have a consistent definition of surplus.
Only that it is circular, as your capital is built (defined) in terms
of surplus. Of course there is also an abstract definition of
capital, but no proof about if it is actually a measurable concept,
which you need in order to use the word "more". Of course money
is measurable per se, but capital is not.

OR by the offer/demand mechanism. The whole point is that the benefit
of the owner is not linearly related to any measurable quantity
attached to labour.

I like this concept of "expanding" capital, from there it is clear that
no conserved object lies under it, and then you dont need the concept
of surplus to make capital to increase. But I don't understand the need
of "fixed" and "variable" capitals, perhaps it is only a trick to
restore again the need of "surplus"?

(no "I", but "we" :-)

Well, one of them was the source of capital, I see it is solved
by including the so-called "expansion".

The other one bas the use of "surplus". And, from your explanation,
I think that it is more a rhetorical word than a real point of
the theory. I think you use "surplus labour" as a synonym
of "labour", at least it seems that your whole answer can be formulated
without this adjective. Probably "necessary" amd "surplus" were two
good buzzwords for revolutionary propaganda, but no more.

Generically, the main problem I see in this focus is that it seems to
imply that the whole production under socialism must be, at best, of the
same
order that under capitalism. From here, one deduces that the only goal
is redistribution, making the standards of living of some "families" to
fall down.

With the marxist "language", it seems a difficult task to proof that
socialism would be in fact more productive that capitalism. For
instance,
is very difficult to show that destruction of capital is actually a
legitimate source of income for capitalists.

Yours,

						Alejandro

If money value is one of the fundamentals of the theory, then I resign.
Money must be a deduction: Capital ownership drives to bartering, and
bartering
against additive objects drives to money. Your counterexample is
CONFUSE:
you invite people to think of capital as money, which it IS NOT.

I was trying to show that you seem to define capital as the accumulation
of surplus, and surplus as the origin of capital. So the catch-22
should not strike you, as it was a purposeful play. Only a minor
correction;
in:
the first "it" was meant to be "grain". For instance, a field produces
more
grain than the quantity of grain needed to grow the new plants. So no
circularity here, no need to abstract grains to "capital".

                         ^^^^^^^           ^^^^^^^^
      ^^^^^^^^^
Hmm even Aristoteles' physics is better for this task.

Claiming the existence of a common measure is only that, a claim. Would
you
be so kind as to propose an actual experiment showing the existence of
such substance? If you can not, I'd beg you to avoid to use the
word "empirical" in any follow-up of this discussion.

Pity, so here you really think that capital "adds", ok, not "expands".
Expansion
is very different of addition.

The empirical facts in your parragraph are the ones related to humans:
They
will die if they do not eat, etc. But you put the label "empirical" to
the
most theoretical concept in your discussion. Well, that is really
propaganda
if I saw one!

The two last parragraphs are more interesting, so I'll split discussion
here.

						Alejandro

Ok, let me then to raise then the black flag, as the "other" theory is
needed
for this, so lets invoke Proudhon' spirit and point out that Ownership
is the key of capitalism system. A capitalist gets its benefit by
trading
ownership rights through a bartering process. Such process contains
random
and structural components. A capitalist is aware of such random
components
and manages them to maximize benefit. Sometimes this implies to increase
production to sell more products. Other times this is done by exercising
*his right* to destroy production then increasing price.

With Marxist vocabulary (surpluses, etc.) it is very difficultous to
study
the process of capital destruction. Even worse, such destruction is
rarely physical; sometimes it takes the form of resource deallocation or
so, usually the owners purposefully avoid to produce the maximum
quantity of
product they could make from the available resources.

But even a bad axiomatic systems gets results if the thinker proceeds
adequately,
and so Marx was able to see how such destruction was needed in order
to equilibrate the capitalist system. But he claimed that it was a
weakness
of the system, postulated that the destruction process would drive to
a succession of "crisis" which would drive to the final destruction
of capitalism, etc...

Actually, capital retention (destruction if needed, or simply avoiding
production increases) can be done in a quasi continuous form; and even
if a "crisis" happens, the mechanism corrects capitalism and surviving
capitalists get benefit from it.

It is to be noticed thats that common preach contain a lot of
conditionals:

    For if the doomsayers are right, and continued growth is
unsustainable,
     threatening the integrity of the biosphere on which all life
depends, and if
     resource limits are insurmountable, then what IS the alternative to
     capitalism? What OTHER way from the impasse but the relentless

Other common error is malthusianism and its derivations:

     First of all, it is capitalist science and technology, capitalist
rapacity,
     and the vast overgrowth of surplus population ('the most general
law of
     capitalism', as Marx called it) in the form of a colossal reserve
army of
     labour, which has created the world we now live in. It was
precisely the
     capitalist Green Revolution which triggered a second population
     explosion among the dispossessed of the world, in just the same way
     that the population of the first industrial countries exploded, as
peasants
     were made landless and forced into the cities.

Malthusianism was initially claimed as an excuse for the existence of
poor
people and an argument to displace charity and redistribution efforts
in favour other social tasks.

The oldest version was "people will expand always to saturate existing
resources". This was sophisticated to a pseudocientifical claim:
"resources
grow polinomically while population grows exponentially".

Now, it is clear that resource harvesting is related to the number of
people
available to do such task, thus resources harvested grow exponentially
if
population do. This is so until we reach the *physical* limit of
resources,
which probably have not happened yet; such physical limit would be
surely related to Sun energy and Earth albedo (the capacity of earth to
radiate heat out of the planet), if we agree to reject earth-based
nuclear sources and/or perhaps controlled oil burning.

Mike,

I doubt if we can label such civilizations as "capital accumulating"
ones. At least, it is clear that they didn't got to accumulate enough
capital to survive the first millennium BC "disturbances". Yet, most
accounting of the old empires continues sleeping, as it seems we
lack of enough students to finish the analytics. So please let me
to avoid strong claims in this area. In any case, the capital
accumulated
in that civilizations was completely destroyed, so it does not originate
"our" actual capital.

It is interesting to remark that first civilizations are located
in very specific sites, the nature of the terrain and clima are
characteristic. If, on the other hand, labour were the only implied
factor, civilizations would be randomly scattered around the globe.

Your point about water wheel seems to me more fundamental. I think
you would move the invention some centuries back, but I am
unsure. Note that by first century BC the principles of mechanics
were well known (Archimedes "support point" and all that). Perhaps
I would choose sailing as the first example of direct intake
of energy for social/economical purposes.

I think that capital accumulation is closely related to the intake
of energy each civilization was/is able to do. So, we start playing
animals (very indirect sun energy), and primitive uses of wood and
coal, then we proceed to wind and water, then a centuries wide
epoch of harvesting again from nature (and humans), and finally
we restart  with vapour machine, and now oil and nuclear. Capital
seems very related to this intake. Aside, let me to note that
Wall Street fundamental line has only two "plains", correlating
to 1929 crisis and to seventies' oil crisis.

Last but no least, we must not forget that we look for an egalitarian
society as a mean to continue our civilization, no to starting it.
Our guess is that a non-egalitarian society (or species) has a survival
probability lower than an egalitarian one. I am sorry if I sound too
crude, but if anyone want spiritual reward, I'd urge him to contract
some religion.

						Alejandro