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By Sevan
#1358140
I undertstand Marx's explanation for falling rate of profit under capitalism being caused by the fact that a larger percentage of production is taken up by machines and not workers' labor. Since profit is only derived from exploitation of workers, in the form of surplus value, having a greater portion of production performed by machines in turn means a drop in the rate of profit.

Now, why does production performed by machines produce no surplus value? And also, how is it that surplus value is only tied to living workers?
User avatar
By getfiscal
#1358166
Producers need to pay for their inputs at the price that commodity fetches on the market. If it were all just this sort of buying and selling, with no labour involved in any part of the chain, then there would be no accumulation. It would just be someone selling goods for the same price they were buying them for. The one commodity where this is different is labour-power. Because of class power differences and cultural norms, you can buy labour-power at a price that is lower than the total product of the labourer during the time they are employed. You can't do that with any other commodity. In that way, surplus value is connected to labour exploited.
User avatar
By Eauz
#1358933
Sevan wrote:Since profit is only derived from exploitation of workers, in the form of surplus value, having a greater portion of production performed by machines in turn means a drop in the rate of profit.
The higher profit of more mechinized (or automated) enterprises is derived from the redistribution of total surplus revenue, which is created by the surplus labour of all wage-earners in the sector of market production. Surplus labour as a source of profit is not a postulate but an actual reality. In other words, this total revenue is distributed according to essentially two criteria:
(1) the degree of mechinization of the enterprises and branches
(2) the market power of the branches.

From the text Understanding the Economy by Jacques Gouverneur, he has provided us a chart to understand how distribution of surplus revenue occurs between unequally mechinized enterprises within the same average branch of production.

Image

Meanings of the symbols used:

L = Number of wage-earners
C = Total Constant Capital
V = Total Variable Capital
S = Total Surplus labour or Total Surplus Revenue
V + S = Total Present Labour or Total Revenue created
C + V = Total Cost of Production
C + V + S = Total Value
P = Total Profit
K = Total Capital Invested
s' = S/V = Rate of Surplus Value
Q = Quantity produced
c = Constant Capital per Unit
v = Variable Capital per Unit
s = Surplus Labour per Unit or Surplus Revenue per unit
v + s = Present Labour per Unit or Reventue Created per Unit
c + v = Cost of Production per Unit
c + v + s = Value per Unit
p = Profit per Unit
p' = P/K = rate of profit
c' = C/V = Composition of Capital.


To understand this, assume that Enterprise1 is the most mechinized ($3600 invested in machines), Enterprise2 is the norm for society and Enteprise3 ($2000 invested in machines) is the marginal enterprise or less mechinized. From the first glance, it would appear by theory that the company with the least number of employees would produce the least amount of surplus value, while Enteprise3 with the most would produce the most surplus-value.

Now, in this time frame (1 day possibly?), Enteprise1 produces 450 commodities since they are highly mechinized. We can use this figure to find the per unit value for C, V & S. For all enteprises, the constant capital per unit is $8. However, in terms of the variable and surplus labour, they vary. For enteprise1, they only require the use of $0.90 in terms of production costs for each commodity (400/450 = 0.9), while the other two enterprises, which employ more employees require more variable capital per unit value of each commodity.

Now, since the goal of capitalism is to create a profit, reducing the production cost is essential (Economics 101). So, lets add up all the values of c, v & s. For Enterprise1, it only costs the company $8.90, enterprise2 a production cost of $10.00 and Enterprise3 requires $12.00 to produce the same commodity. Now, the market price for the commmodity at the time is $12.00, which means enterprise1 is going to have a profit of $3.10 per unit. This gives them a total profit of $1400 and a rate of profit of 35%.

We thus see that the total profit of the branch is equal to the total surplus revenue created by the wage-earners in that branch ($2000 in the example). However, the total surplus revenue is distributed among the capitalists according to the degree of mechinization of the enterprises, so that the more mechinized enterprises enjoy a higher rate of profit than the others.

Now, let's assume the most extreme case where a factory does not employ labourers (no variable capital). This means that no surplus revenue can be created (S = 0). The enterprise will, however, make a profit since the unit individual value of its commodities (reduced to c) is lower than the average.
User avatar
By Sevan
#1362552
The enterprise will, however, make a profit since the unit individual value of its commodities (reduced to c) is lower than the average.
So profit is not exclusively tied to generating surplus value?
User avatar
By Eauz
#1362583
Sevan wrote:So profit is not exclusively tied to generating surplus value?
Total profit of the branch is equal to the total surplus revenue created by the wage-earners in the branch ($2000 in th example). The enterprises distribute the surplus revenue according to their degree of mechanisation of each enterprise. Therefore, the enterpries, which are more mechanised enjoy a higher rate of profit than the others.

Just take a look at the chart. Look at C6. Enterprise1 only gains $400 of surplus revenue from their 100 employees, while looking at cell E6, we see that Enterprise3 gets the most. Unfortunatly, due to the fact that Enterprise1 has a higher degree of mechanisation (and assuming more market power), they are capable of employing less employees but receive a higher rate of profits (created by all employees in the branch (sector)).

So, a company, if it was possible, wouldn't have to pay for any (V) variable capital, which means they will not produce any surplus revenue, but as long as there are marginal enterprises in existence, the fully-mechanised enterprises would benefit greatly, until it becomes an issue on their profits (as well as the need to continually improve its market share of the branch (sector), or the goal of capitalism), at which point, they would either try to bring it out of business or some how gain ownership, directly or indirectly.
User avatar
By HoniSoit
#1379555
If I may ask a related question, how useful is the labour theory of value and expolitation in the real world? I understand what has been said in this thread so far - but besides (1) the degree of mechinization of the enterprises and branches (2) the market power of the branches, the power relation between capital and labour surely plays a role in determining the profit, and this could be entirely independent of the value of the products.

So would I be wrong to suggest which the theory provides some insight into how profits are extracted from the surplus value of labour power, it says little about how in real world, profits can be extracted by simply having a stronger capitalist class vis-a-vis labour that has nothing to do with the labour theory of value?
User avatar
By Stawko
#1379703
I always thought that mechanisation just allows higher surplus generated per worker minus the cost of running the techology.
Because the running cost for technolgy (i.e. energy supply) can be considered as part of the wages, and technology as workers. Since a worker operating a mechanised system produces many-fold more than a worker with hand-labour, we can say that that worker is economically equivalent to, say, ten workers, and the cost of paying the one worker his wages and running the technology is effectively paying ten workers their wages for the same produce, with the sum split in ten.
Imagining it that was implies that far more surplus value is generated per worker.

At least I think that's right, but I'm not an economist...
User avatar
By Eauz
#1380175
HoniSoit wrote:So would I be wrong to suggest which the theory provides some insight into how profits are extracted from the surplus value of labour power, it says little about how in real world, profits can be extracted by simply having a stronger capitalist class vis-a-vis labour that has nothing to do with the labour theory of value?
What I presented to you was an understanding of how the capitalist system works in terms of profit and mechinisation. Sevan suggested that there would be a drop in the rate of profit if we just reduced the number of labourers with machines. Now, eliminating all the surplus-value (S =0), one can still make a profit since the unit individual value of that commodity is lower than the average. What you suggesting is correct, since it has nothing to do with what I'm discussing. Sure, if a labouring class has a stronger say in society, the surplus-value extracted will definetly be lower (possibly 60% compared to 100%). As we have seen in our society, the majority of the public and unionised parts of society are being destroyed, increasing the strength of the capitalist class. However, there is no contradiction between what you are saying and what I have said.
User avatar
By HoniSoit
#1380186
However, there is no contradiction between what you are saying and what I have said.


Neither did I suggest there was any contradiction.
#15262289
https://kapitalism101.wordpress.com/2013/12/11/surplus-value-draft/
When the capitalist invests in production she buys different types of commodities, materials, machines/tools, and labor-power. The non-labor inputs into production Marx calls “constant capital” because these inputs do not transfer any more value to the final product than the original cost of their purchase. If Susan buys a bag of apples for $5 and bakes 5 pies with these apples then value of $1 of apples is passed onto each pie.

The same logic applies to machines which transfer their cost onto the final product over a longer period of time. We call these ‘fixed capital’, a subset of constant capital. If a machine costing $1,000 is used in the production of 1000 widgets over a period of years then $1 of value is transferred into the final value of each widget. Sometimes this way of looking at the value transfer of fixed capital is not intuitive to people. For instance, it is not uncommon to hear the opposite (hypothetical) conception: “I spent $1000 on grow-lights and fertilizer. It was a big expense but after the first batch of marijuana was sold it was all paid off. All future batches were pure profit.” In this conception the cost of the inputs are transferred in full to the first production period (or as many as it takes to pay off the fixed capital) and the successive production period pass on no fixed capital value to the final product. However, such an interpretation is not as logical as it sounds. On one hand, the question is just one of perspective. If, say, we grew 2000 plants over the life of the grow-lights and fertilizer then we could say that each plant contained .50 cents of fixed capital value ($1000 divided by 2000) or we could say that the first 1000 plants contained $1 and the next 1000 plants contained no fixed capital value. When looked at in the aggregate, over the lifetime of the fixed capital, it is the same regardless of how choose to look at the division.

On the other hand, if we want to really be specific, it would be wrong to say that some plants created with the fixed capital contain this value while others do not. If the grower is a reasonable capitalist he does not raise his prices when he buys a new grow-light and then drop the prices as soon as the grow-light is “paid off”. He keeps his prices consistent with the market price. This is obvious evidence that the value of fixed capital transfers over the life of the machine, and not all at once.

This brings us to a second conversation principle, one related to production: constant capital transfers its value into the value of the final product but it does not create surplus-value. This accords with Marx’s basic concept of value, that value is abstract labor. While labor is done on constant capital, while human labor transforms constant capital into new products, it is not the constant capital that is doing the labor and therefore constant capital cannot increase in value during production.

This law of conservation even applies to fully-automated production such as in “lights-out manufacturing” where production is carried out in the dark because there are no humans present in the factory. From Marx’s perspective a totally automated factory produces no value but that does not mean that its owners receive no profit from their investment or that the commodities produced by robots cannot have prices. This is explained through the transfer of value in exchange. We will explore this concept in more detail later, however for now we can at least shed a little light on the subject by analogy with a laundromat. A laundromat is an investment that requires little or no human labor yet the owner of the laundromat makes a profit every time their machines are used by customers. The machines, in Marx’s system, are not creating value but they are certainly filling up with quarters. Rather than being value creation, these machines function more like rent. In the same way you might rent a house or a car, you rent the use of a washer/dryer for an hour. Rent doesn’t involve value creation at all. It just involves extracting money from consumers in exchange for the use of something. There are many ways in which profit can be made without creating value. But these are not methods that increase aggregate value in society. This is the fundamental distinction to be made between surplus-value through production (which we will get to in a moment) and the transfer of value in exchange which happens any time something is rented or when a labor-less product is sold. These forms of making money are parasitic upon the dominant mode of production in society, capitalist production, which produces value. Without capitalist value production there could be no automated factories, laundromats or landlords siphoning off value.
#15262293
Wellsy wrote:https://kapitalism101.wordpress.com/2013/12/11/surplus-value-draft/

The quoted passage is packed with infantile Marxist absurdities that any normal person over the age of nine knows are false and dishonest. Watch:
The non-labor inputs into production Marx calls “constant capital” because these inputs do not transfer any more value to the final product than the original cost of their purchase.

That claim is idiotic anti-economic nonsense.
If Susan buys a bag of apples for $5 and bakes 5 pies with these apples then value of $1 of apples is passed onto each pie.

No, the author of those words merely proved he does not know anything about value, production, or economics. The cost of the apples is completely irrelevant to the value of the pies, which is determined solely by their combined scarcity (supply) and utility (demand).
The same logic applies to machines which transfer their cost onto the final product over a longer period of time.

That claim is objectively false for the same reason.
If a machine costing $1,000 is used in the production of 1000 widgets over a period of years then $1 of value is transferred into the final value of each widget.

No, that is also objectively false.
Sometimes this way of looking at the value transfer of fixed capital is not intuitive to people.

Because it is objectively false and anti-economic bull#@!+.
For instance, it is not uncommon to hear the opposite (hypothetical) conception: “I spent $1000 on grow-lights and fertilizer. It was a big expense but after the first batch of marijuana was sold it was all paid off. All future batches were pure profit.” In this conception the cost of the inputs are transferred in full to the first production period (or as many as it takes to pay off the fixed capital) and the successive production period pass on no fixed capital value to the final product.

No. No value is "passed on" from the cost of the inputs in any case. The costs are sunk costs the moment they are incurred, and the value of the product is determined by the market -- supply and demand -- not by the costs of production. The producer's job is precisely to find some way of making the product worth more than it costs to make it, or cost less to make than it is worth.
However, such an interpretation is not as logical as it sounds.

But it is infinitely more logical than the absurd and dishonest Marxist interpretation.
On one hand, the question is just one of perspective.

No it isn't. It's a question of fact.
If, say, we grew 2000 plants over the life of the grow-lights and fertilizer then we could say that each plant contained .50 cents of fixed capital value ($1000 divided by 2000) or we could say that the first 1000 plants contained $1 and the next 1000 plants contained no fixed capital value.

No we couldn't, unless we were either ignorant, stupid, or lying Marxists. None of the plants contain any capital value. Their value is strictly determined by supply and demand. The capital is a sunk cost.
When looked at in the aggregate, over the lifetime of the fixed capital, it is the same regardless of how choose to look at the division.

There is no division.
On the other hand, if we want to really be specific, it would be wrong to say that some plants created with the fixed capital contain this value while others do not.

Right, because none of them contain any at all.
If the grower is a reasonable capitalist he does not raise his prices when he buys a new grow-light and then drop the prices as soon as the grow-light is “paid off”. He keeps his prices consistent with the market price. This is obvious evidence that the value of fixed capital transfers over the life of the machine, and not all at once.

No, it is obvious evidence that the value of fixed capital does not transfer to the product at all.
This brings us to a second conversation principle, one related to production: constant capital transfers its value into the value of the final product but it does not create surplus-value.

That is just another absurd falsehood.
This accords with Marx’s basic concept of value, that value is abstract labor.

Which is objectively false.
While labor is done on constant capital, while human labor transforms constant capital into new products, it is not the constant capital that is doing the labor and therefore constant capital cannot increase in value during production.

That is pure, anti-economic Marxist idiocy, and is easily proved to be pure idiocy:

Abby has a wood-fired pizza oven, with which she is able to bake 100 pizzas a day worth $10 each, in between chopping the wood, tending the fire, etc., for total revenue of $1000. The pizza ingredients cost $5/pie, and the wood costs $1/pie, so her profit (wage) is $400/day. Her husband Ben then buys her a $300 electric pizza oven. So now, because she doesn't have to tend the fire, she can make 300 $10 pizzas a day, for total revenue of $3000. The electric power also costs $1/pie, so her profit is $1200. The value of her labor did not magically triple. She is just, thanks to the new oven, doing more productive work making pizzas rather than tending the fire. The difference is due to Ben's contribution, not hers, and has nothing whatever to do with either the cost of the oven or the value of Abby's labor. The situation is not altered if rather than being her husband, Ben is her employer. Marxists will say, do, and believe anything whatever in order to avoid knowing such facts.
This law of conservation even applies to fully-automated production such as in “lights-out manufacturing” where production is carried out in the dark because there are no humans present in the factory.

There is no such "law." It is just a bald falsehood, as proved above.
From Marx’s perspective a totally automated factory produces no value but that does not mean that its owners receive no profit from their investment or that the commodities produced by robots cannot have prices.

The notion that the robot factory produces no value is literally Marxist insanity. It is completely divorced from reality, and no one whose brain has not been rotted by Marxism could possibly believe it for one second.
This is explained through the transfer of value in exchange.

Which is an outright fabrication with no basis in economics.
We will explore this concept in more detail later, however for now we can at least shed a little light on the subject by analogy with a laundromat.

Without reading further, I know this analogy will be idiotic.
A laundromat is an investment that requires little or no human labor yet the owner of the laundromat makes a profit every time their machines are used by customers.

That's revenue, not profit. We don't know if the laundromat is profitable.

Strike One.
The machines, in Marx’s system, are not creating value but they are certainly filling up with quarters.

<yawn> If the machines are creating no value, what makes the customers willing to put in the quarters, hmmmmmmmmmmm?

Strike Two.
Rather than being value creation, these machines function more like rent.

Marx is unable to tell the difference between charging rent for something that you supply and charging rent for something that would otherwise have been available anyway.

That's Strike Three, and Marx is Out.
In the same way you might rent a house or a car, you rent the use of a washer/dryer for an hour.

That's pretty much true. But providing customers with the use of a house or car is certainly creating value.
Rent doesn’t involve value creation at all.

Rent of LAND doesn't, because the land was already there anyway. Renting out houses, cars, and washing machines does, because those things were NOT already there anyway. Marxists just refuse to know such facts.

Strike Four.
It just involves extracting money from consumers in exchange for the use of something.

Something that would not otherwise have been available for use, or that would?

Blank out.
There are many ways in which profit can be made without creating value.

But providing people with the opportunity to use something that would not otherwise have been available is not one of them.

Strike Five -- but who's counting?
But these are not methods that increase aggregate value in society.

:lol: :lol: :lol: This is a person who has never tried doing laundry by hand...
This is the fundamental distinction to be made between surplus-value through production (which we will get to in a moment) and the transfer of value in exchange which happens any time something is rented

See above for the comprehensive and conclusive demolition of that purported distinction.
or when a labor-less product is sold.

There are no labor-less products.
These forms of making money are parasitic upon the dominant mode of production in society, capitalist production, which produces value.

Gibberish.
Without capitalist value production there could be no automated factories, laundromats or landlords siphoning off value.

See? Marxist know-nothings have to refuse to know the fact that the laundromat and factory would not otherwise have been available for use, while the land would.

Your infantile, anti-economic, and dishonest Marxist source has been destroyed utterly, whether you can find a willingness to know that fact or not.
#15262294
@Truth To Power

That’s nice but have you ever considered….




You have a different notion of value than Marx and not clear you know what sense Marx has of it. Especially as you likely deny its existence as you seem fixated on only the appearences of supply and demand which precludes consideration of value as Marx conceives it. Marx does not deny supply and demand having a role but only that it is not independent production in itd material and social relations.


https://www.marxists.org/archive/marx/works/1865/value-price-profit/ch01.htm
But to consider matters more broadly: You would be altogether mistaken in fancying that the value of labour or any other commodity whatever is ultimately fixed by supply and demand. Supply and demand regulate nothing but the temporary fluctuations of market prices. They will explain to you why the market price of a commodity rises above or sinks below its value, but they can never account for the value itself. Suppose supply and demand to equilibrate, or, as the economists call it, to cover each other. Why, the very moment these opposite forces become equal they paralyze each other, and cease to work in the one or other direction. At the moment when supply and demand equilibrate each other, and therefore cease to act, the market price of a commodity coincides with its real value, with the standard price round which its market prices oscillate. In inquiring into the nature of that VALUE, we have therefore nothing at all to do with the temporary effects on market prices of supply and demand. The same holds true of wages and of the prices of all other commodities.


And in your attack on Marx one sees little distinction between use and exchange value such that it makes out production appears largely for social use value as if money is neutral.
Be self satisfied because I see nothing productive to be had between us, nothing to be learned, so save yourself the trouble of repeating the same points again because you can’t engage with ideas beyond your own other than to denounce them.
#15262302
Wellsy wrote:@Truth To Power
That’s nice but have you ever considered….


<yawn> I suppose that when you realize your beliefs have been conclusively demolished, that sort of thing serves as a substitute for fact and logic.
You have a different notion of value than Marx

Because his is an anti-concept contrived to prevent use of the valid concept: what something would trade for.
and not clear you know what sense Marx has of it.

I know his sense of it makes no sense.
Especially as you likely deny its existence as you seem fixated on only the appearences of supply and demand which precludes consideration of value as Marx conceives it.

Value is what something would trade for. Anything but supply and demand is irrelevant. Marx merely conceives an anti-concept.
Marx does not deny supply and demand having a role but only that it is not independent production in itd material and social relations.

That is nothing but anti-economic gibberish.
https://www.marxists.org/archive/marx/works/1865/value-price-profit/ch01.htm
But to consider matters more broadly: You would be altogether mistaken in fancying that the value of labour or any other commodity whatever is ultimately fixed by supply and demand.

No, that is most certainly and exclusively how all value is fixed.
Supply and demand regulate nothing but the temporary fluctuations of market prices.

Which are precisely the measure of value.
They will explain to you why the market price of a commodity rises above or sinks below its value,

No they won't, because the market price is its value.
but they can never account for the value itself.

They can and do, because that is all value is.
Suppose supply and demand to equilibrate, or, as the economists call it, to cover each other. Why, the very moment these opposite forces become equal they paralyze each other, and cease to work in the one or other direction.

Anti-economic gibberish. Why would they work in any particular "direction"?
At the moment when supply and demand equilibrate each other, and therefore cease to act,

They don't cease to act. They sell and buy.
the market price of a commodity coincides with its real value, with the standard price round which its market prices oscillate.

The "standard price" is a mirage.
In inquiring into the nature of that VALUE, we have therefore nothing at all to do with the temporary effects on market prices of supply and demand.

Anti-economic gibberish. The effect on prices of supply and demand determines value.
The same holds true of wages and of the prices of all other commodities.

I.e., the same is false of wages and all other prices.
And in your attack on Marx one sees little distinction between use and exchange value such that it makes out production appears largely for social use value as if money is neutral.

No. What you call "exchange value" is value. "Use value" is just utility: the capacity to satisfy human desires. Utility + purchasing power = demand. Marx didn't understand anything about money, and certainly had no idea of how different kinds of money affect production and exchange.
Be self satisfied because I see nothing productive to be had between us, nothing to be learned,

Because you refuse to learn from having been conclusively refuted.
so save yourself the trouble of repeating the same points again because you can’t engage with ideas beyond your own other than to denounce them.

I have engaged with the purported "ideas" of Marxism, and demolished them utterly.
By Truth To Power
#15262420
Eauz wrote:What I presented to you was an understanding of how the capitalist system works in terms of profit and mechinisation.

No, a misunderstanding.
#15262698
Wellsy wrote:



If Susan buys a bag of apples for $5 and bakes 5 pies with these apples then value of $1 of apples is passed onto each pie.



Truth To Power wrote:
No, the author of those words merely proved he does not know anything about value, production, or economics. The cost of the apples is completely irrelevant to the value of the pies, which is determined solely by their combined scarcity (supply) and utility (demand).



You're being *ridiculous*, TTP, by denying that people make *investments*, of *capital*, for *returns on investment*.

Here you're effectively denying that equity capital exists *altogether*.



Financial capital is a much broader term than economic capital. In a sense, anything can be a form of financial capital as long as it has a monetary value and is used in the pursuit of future revenue.



https://www.investopedia.com/ask/answer ... apital.asp



---



For instance, it is not uncommon to hear the opposite (hypothetical) conception: “I spent $1000 on grow-lights and fertilizer. It was a big expense but after the first batch of marijuana was sold it was all paid off. All future batches were pure profit.” In this conception the cost of the inputs are transferred in full to the first production period (or as many as it takes to pay off the fixed capital) and the successive production period pass on no fixed capital value to the final product.



Truth To Power wrote:
No. No value is "passed on" from the cost of the inputs in any case. The costs are sunk costs the moment they are incurred, and the value of the product is determined by the market -- supply and demand -- not by the costs of production. The producer's job is precisely to find some way of making the product worth more than it costs to make it, or cost less to make than it is worth.



*But*:



At the moment when supply and demand equilibrate each other, and therefore cease to act, the market price of a commodity coincides with its real value, with the standard price round which its market prices oscillate.



---


Truth To Power wrote:
Abby has a wood-fired pizza oven, with which she is able to bake 100 pizzas a day worth $10 each, in between chopping the wood, tending the fire, etc., for total revenue of $1000. The pizza ingredients cost $5/pie, and the wood costs $1/pie, so her profit (wage) is $400/day. Her husband Ben then buys her a $300 electric pizza oven. So now, because she doesn't have to tend the fire, she can make 300 $10 pizzas a day, for total revenue of $3000. The electric power also costs $1/pie, so her profit is $1200. The value of her labor did not magically triple. She is just, thanks to the new oven, doing more productive work making pizzas rather than tending the fire. The difference is due to Ben's contribution, not hers, and has nothing whatever to do with either the cost of the oven or the value of Abby's labor. The situation is not altered if rather than being her husband, Ben is her employer. Marxists will say, do, and believe anything whatever in order to avoid knowing such facts.



Does Abby receive a *profit*, or a *wage* -- if she's the one investing her own capital, for the initial oven, pizza ingredients, and wood, then she's the one enjoying *profits*, from the $1000 revenue, due to her investments.

If Abby is an *employee* of Ben and she does the same workday, she will *not* be allowed to handle the new daily revenue of $3000 per day, because her employer and husband Ben is the one who put up the $300 for the new electric pizza oven. She will *not* receive $400 in wages per day, nor *triple* that, due to the revenue tripling, because the $400 / $1200 number -- for profits -- is attributed wholly to the technological benefit / improvement of the *electric* oven, producing three times as many pizzas as Abby's original wood-fired oven.

Ben has an interest in receiving the $1200 in profits every day, and seems to value Abby's labor in making pizzas as being *slave* labor since there's no mention of how she'll be compensated for her daily pizza-making labor using the new electric oven paid-for by Ben.

*Abby* has an interest in continuing to work on the older, original *wood-fired* oven, since she at least *owns* that oven herself, and can make her original $400 of profits per day from the revenue of $1000 per day -- instead of allowing Ben's hostile-takeover and her own enslavement to the electric oven, for the sake of Ben's profit-making.


---



Rather than being value creation, these [laundromat] machines function more like rent.



Truth To Power wrote:
Marx is unable to tell the difference between charging rent for something that you supply and charging rent for something that would otherwise have been available anyway.



Your *land* fixation aside, the author here is simply noting that *other* assets and resources, like laundromat machines, function *the same way* as land and all types of *rentier* capital -- which are all *non-productive* of commodities, and are a *cost* to both wages and equity capital.

In other words the mechanical service of *clean clothes* is a *must* for workers and executives alike, and is therefore a non-productive *cost* to the entire *pre-existing* economy -- a *drain* on the pre-existing pool of wages and equity capital, both.


---



Rent doesn’t involve value creation at all.



Truth To Power wrote:
Rent of LAND doesn't, because the land was already there anyway. Renting out houses, cars, and washing machines does, because those things were NOT already there anyway. Marxists just refuse to know such facts.



Land, and *all other* asset and resource classes, are all *rentier* capital, and do *not* involve value creation at all.

Paying for the labor to transform raw land into *usable* land -- as with landscaping -- turns the land into a commodity with *exchange value*, 'land', or 'real estate'.

Renting out pre-existing assets like land, houses, cars, and washing machines, means that material-economic *services* *are* being rented-out, for revenue, but nothing *new* (commodities) is being produced.


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Without capitalist value production there could be no automated factories, laundromats or landlords siphoning off value.



Truth To Power wrote:
See? Marxist know-nothings have to refuse to know the fact that the laundromat and factory would not otherwise have been available for use, while the land would.



Raw land itself *has no value*, because it can't be readily used as an 'automatic' resource, like sunshine. Once *labor* is applied, the land can then be transformed into a *usable* parcel of land, or 'real estate'.

Yes, capital had to be invested, for the making of the usable land, the auto-service washing machines, or the privately-owned factory infrastructure.

Now guess which of these investments actually produce *new commodities* -- is it the [1] land, the [2] washing machines, or [3] the factory -- ?
#15262701
Truth To Power wrote:
something that would otherwise have been available anyway. [land]



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Natural monopolies can also arise when one firm is much more efficient than multiple firms in providing the good or service to the market.



Natural monopolies are allowed when a single company can supply a product or service at a lower cost than any potential competitor, and at a volume that can service an entire market. Since natural monopolies use an industry's limited resources efficiently to offer the lowest unit price to consumers, it is advantageous in many situations to have a natural monopoly.



Since it's economically sensible to have utilities operate as natural monopolies, governments allow them to exist. However, the industry is heavily regulated to ensure that consumers get fair pricing and proper services.

Another example of a natural monopoly is a railroad company. The railroad industry is government-sponsored, meaning their natural monopolies are allowed because it's more efficient and the public's best interest to help it flourish. Further, the industry can't support two or more major players given the unique resources needed, such as land for railroad tracks, train stations, and their high-cost structures.



https://www.investopedia.com/terms/n/na ... nopoly.asp




Public goods: Public goods are another example of market failure because they defy the tenets of supply and demand that drive the free markets. Public goods and services are nonexcludable—once something like a street light is produced, it is accessible to everyone, and the producer cannot limit consumption only to paying customers. Public goods are also nonrival, as use by one individual does not limit consumption by others. Given these characteristics, the private sector has little incentive to produce public goods, which leads to market failure, and the government usually has to provide these goods or subsidize their production.



https://www.investopedia.com/terms/m/marketfailure.asp



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the National Recovery Act (NRA). It was designed to take control of the economy through a series of codes agreed on by management, labor, and the government, fixing prices and wages, limiting competition. From the first, the NRA was dominated by big businesses and served their interests.



https://www.historyisaweapon.com/defcon ... hel15.html
#15262705

In the end Roosevelt pushed through emergency powers which involved state controls on the operations of capitalism. These included guarantees of the funds of banks through the Federal Reserve system, use of government money to buy up and destroy crops in order to raise their price, a civil construction corps to provide work camps for 2.3 million unemployed young men, a limited form of self regulation of industry through cartels to control price and production levels, limited amounts of direct state production through the Tennessee Valley Authority, and even measures which made it easier for workers to form unions and raise wages, so increasing consumer demand. The speed and audacity with which these measures were implemented caught the enthusiasm of those suffering from the recession, and of political liberals who wanted an alternative to fascism or socialist revolution. They seemed to stand in sharp contrast to the previous administration. Its response to mass unemployment had been to send in 25,000 troops with bayonets fixed, led by General MacArthur on a white charger, to disperse a protest by unemployed war veterans. At least Roosevelt seemed to be providing some jobs, even if at rock bottom wage rates and under appalling conditions.

However, Roosevelt’s measures were neither as innovative nor as effective as many people thought. Roosevelt remained highly orthodox in one respect—he did not use government spending to break out of the crisis. In fact he cut veterans’ pensions and public employment. As Kindelberger writes, ‘Fiscal means to expand employment remained limited, since the Democratic administration under Roosevelt remained committed to a balanced budget’.224



Harman, _People's History of the World_, p. 513
#15262707
land --> world war PATH UP A HILL:


land - flat, terrain, landscape

asset / resource ('rentier' capital) - built-up non-commodity-productive infrastructure, like a raised area or building foundation, or building

natural monopoly - like a 'rooftop' zoned area on top of that building that supports a single tree and its fruit

market failure - like a skylight or defined area above and/or *around* that tree, that 'removes' it from the open air and most day-to-day market trading

statism - bureaucratically-consciously 'finds' all such trees and their fruit, to administer over all of them in the general interests of the trees' owners

economic nationalism - broader nationalist consciousness / sentiment, expressed as 'monetarism' / strong-currency-values economically, and at the economic expense of rival empires over colonies and territories

currency devaluations - increasing inter-imperialist competitiveness, over a shrinking remainder of market share

trade war - aggressive currency devaluations, for imperialist-type market share, leading to inevitable geopolitical tensions and conflict

hot war - military mobilizations, sustained sites of conflict

world war - theaters of warfare, and international treaties kick-in, resulting in Orwellian super-states of international authoritarian coordination, for endless, destabilizing warfare on foreign (or domestic) populations.
#15262711
Picasso could buy some paint and canvas, hire an assistant to clean his brushes, create a masterpiece, sell it for a million dollars, and all the profit was created from exploiting his assistant because of surplus value.

Picasso paid for the paints, brushes, canvas, studio, advertised his paintings and found the buyer, had all the creative ideas that provided the value to the product, provided a job for the assistant, but its the assistant who is being ripped off.

Imagine showing up to a job and doing absolutely nothing to create the company or its products or its customer base, supply chain logistics etc, then signing a contract to work for the company that has already been established for you like a money-making gift appearing magically out of thin air and then complaining you're being exploited. Sure maybe if the boss treats you like crap you can be exploited, otherwise STFU.
#15262716
Image

In your example, @Unthinking Majority that painting being presented as a Picasso is not one, because Picasso did not paint it. If it is sold as a Picasso painting, that would be fraud even under a capitalist system. People have been prosecuted for this before.

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