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8/12/2019 Nadvi, Khalid - Exploitaition and Labour Theory of Value. a Critique of Roemer's General Theory of Explotaition an
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Exploitation and Labour Theory of Value: A Critique of Roemer's General Theory ofExploitation and ClassAuthor(s): Khalid NadviSource: Economic and Political Weekly, Vol. 20, No. 35 (Aug. 31, 1985), pp. 1479-1484Published by: Economic and Political WeeklyStable URL: http://www.jstor.org/stable/4374775.
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8/12/2019 Nadvi, Khalid - Exploitaition and Labour Theory of Value. a Critique of Roemer's General Theory of Explotaition an
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SPECIAL
ARTICLES
xploitation
n d
abour
Theo r y
o
a l u e
A
Critique of Roemer's
General Theory
of
Exploitation
and
Class
Khalid Nadvi
The uniqueness n J Roemer'swork lies in his-attempt o put forward a model to deal with exploitation n
all modesofproduction. t is theauthor's
ontention, owever,hatRoemer'smethodand the model hat t
produces
are
highly lawed and reject certainaspects
of a Marxianapproachwhichare central
Roemer osits a modelof exploitation aseduponunequal wnership f human
skills)
and
non-human
roperty
(land,meansofproduction)and seeks to
prove the superiority f
this
property ights
model over
the
conventional
surplus
abour model of exploitation. n rejecting he labour theory of
value, however,
Roemer
oses the
core
of the
Marxist heoryof exploitation,namely, he social relationsof production
between
commodityproducers
and
the
exploitationof labour through he creationof surplus value
at the
point of production.
Thispaper
begins by presentinga briefoutline of the leading eatures of
Roemer'smodeL
This
is
followed
by the
author's
majorcriticisms f thesubstance nd methodology
f Roemer'sGeneralTheoryFinally, he
author
puts forward his argumentsor the need or
a surplus abour theory to understand xploitationand restates
his
position on the centralityof the labourtheory of value.
I
Introduction
OUT of the
celebrateddebate on
the
trans-
formation
problem
there has arisen
what
is
rather
fancifully termed as
a
neo-Marxian
approach,whose most renowned
exponent
Steedman
has utilised the
Sraffian
system
to
obtain
a
formulation for
prices. (See
Steedman1977
and
Steedman,
Sweezy,
t
al,
1981.)Such
neo-Ricardian
nalysis
has
con-
cerned
tself
primarily
with
value and
prices.
However
the recent
works
by
Roemer
(Roemer,
982a,
1982b)
whichwe
argue
have
to be seen as an extension of this school,
have aken
such
neo-Ricardian
nalysis
onto
an
altogether
different
dimension;
from
specific
price
formation
models to the
level
of
a
general
theory
of
exploitation.
His
writings
have
without a
doubt taken
Marxist
academia
by
storm,
a
reflection
of their
novelty as well
as
quality.
A
few
excellent
commentaries
nd
critiques
of Roemer
have
appeared
notablyAbell
1983;Eatwell
1982;
Przeworski
1982;
Elster
1982;Wright
1982);
however,
surprisingly,none
have
seriously
dealt
with
the
implications,
both
in
terms
of
theory
and
praxis,
of
Roemer's
rejection
of the
labour
theory
of value.
This
rather
simpleoversight on the partof these com-
mentators is
the focus
of our
arguments
against Roemer in
specific and the
neo-
Ricardian
school in
general.
The
uniqueness
n
Roemer'swork
lies in
his
attempt to
put
forwarda
model to
deal
with
exploitation n all
modes
of production.
The
aim of such
a general
theory
being to
lay
the; oundations
for
an
analysis of
the
laws of
motion of
socialism. Such
an aim is
an
achievement n
itself
and
deserves ap-
plause. There
s
without
a
doubt a
need for
Marxists
to
provide
critical
analysis of
the
socialist
mode of
production
which
goes
beyond
he
individual,
oncrete,
ase
specific
approach
put forward
within
the
format of
the Marxist
theories
of the
State.
Nevertheless,
it is our contention that
Roemer's method
and
the
model that
it
subsequently roduces
arehighly flawedand
rejectcertain
aspects
of a
Marxian
approach
whichwe
consider entral.Roemer,who pro-
fesses to be a concerned
Marxist,
somewhat
cheerfully,
acknowledges
he
'heresy'
n his
writing and
yet bravely carries on
not
so
much in
providing
a
critique
of
the
contra-
dictions
in
Marxist hought, but
in
putting
forward a
priori statements.
He
posits a
model of exploitation based upon
unequal
ownership
f human
skills)
and non-human
property (land, means of
production).
He
goes to great
engths o prove
he
superiority
of
this
propertyrights
model over
the
con-
ventionalsurplus abour model of
exploita-
tion.
In
rejecting he labour theory
of value
Roemer
oses what we believe o be the core
of the
Marxist
heory
of
exploitation,
name-
ly, the social
relations f production
between
commodity producers
and
the
exploitation
of labour
through the creation of
surplus
value at the
point of production.
In
the followingsectionwe presenta brief
outline
of the
leading features
of Roemer's
model. We
state at the outset that we shall
not
attempt to deal with the more detailed
mathematicalproofs of Roemer's heorems.
This is
followed by our major criticismsof
the
substance
of and methodology within
Roemer'sGeneralTheory. We are not con-
vincedby the arguments sed by
Roemer or
thesuitability f a gamestheoretic
approach
and
the need for
a synthesisbetween he neo-
classical
general equilibrium and Marxist
schools through the structureof
mathema-
tical
modelling. Such a noble task is in our
opinion doomed to failure due to
the quite
distinct
approachesand
contradictoryaims
of
the
two disciplines. Finally, we
put for-
ward our arguments or the need for
a sur-
plus labour theory in understanding
xploi-
tation,
we
restate our position on
the cen-
trality of the labour theory of
value.
II
Outline
of Roemer's
General
Theory
As has
been noted,
Roemer attempts
to
put
forward
a
theory
of exploitation
which
encompasses
eudal,
capitalist
andsocialist
modes
of production.
Exploitation
n
each
mode comes
about
asa
result
of an
unequal
distribution
f
property
ights.
Consequent-
ly
feudal
exploitation
is
derived
from
dif-
ferential access
to freedem
from
bondage,
wheresuch
freedom
to freely
rade)
s itself
a property right. Interestingly, Roemer
equates
feudal
exploitation
with what
he
terms
as "neo-classical"
xploitation
where
factors of
production
are no
longer
paid
their
marginal
product.
Capitalist
exploita-
tion results
from
unequal
ownership
of the
means
of
production,
i e, alienable
non-
human
assets.
Socialist
exploitation
s a
con-
sequence
of inequitable
distribution
of
in-
alienable,
human
property.
Differential
en-
dowments
of human
assets
taking
the
form
of skill and
status
exploitation
(and,
presumably,
ender
and race
exploitation).
Under
feudalism
all three
forms
co-exist.
The transition
rom
feudal o
capitalist
mode
of productionbringsabout the eradication
of feudal
exploitation
(the
removal
of
the
barriers
of free
trade).
Similarly,
he
transi-
tion fromcapitalism
o
socialism
entails
the
destruction
of capitalist
exploitation.
In
Roemer'swords,
"each
revolutionary
ran-
sition,has
the
historical
ask
of
eliminating
its characteristic
ssociated
orm
of
exploita-
tion" (Roemer,
1982a;p
21).
The test
for exploitation
put
forwardby
Roemer
ranks
as
one
of the most
novel
fea-
tures
of
his
model. Exploitation
is said
to
exist
if a
coalition
of
agents
could
withdraw
from
the given
social
and econonmic
ela-
tions,
with their per
capita
share
of the
in-
equitably
distributedproperty
ights assets)
and subsequently
raise
their
social welfare
Economic
and
Political
Weekly
1479
Vol
XX,
No
35,
August
31,
1985
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8/12/2019 Nadvi, Khalid - Exploitaition and Labour Theory of Value. a Critique of Roemer's General Theory of Explotaition an
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August 31,
1985
ECONOMIC
AND
POLITICAL
WEEKLY
levels
(whatever
hat social welfare
criterion
may be).
This concept of
'contingently feasible
alternatives' s not
a
purely
abstract
ool
to
ascertain
exploitation
by positing
an
alter-
nativestate
where he coalitionof
agents
can
be betteroff
by
not
facing
such
exploitation;
it is in fact conceivedasbeinghypothetically
feasible.
Consequently
he test for
exploita-
tion under feudalism
involves the
elimina-
tion of feudal
bonds,
where a coalition of
oppressed
agents
(serfs)
could
raise
their
standards f
living, income,
welfare
by
with-
drawing rom
the
master-serf
elations
with
the
land
they
operate
and
the
tools
they
utilise for
production.
Similarly, capitalist
exploitation
exists
if
a coalition of
workers
can
withdrawfrom
the
capitalist
economy
with
their per
capita
share
of
the
means of
production and raise their welfare levels.
Roemerarguesthat
this model of
exploi-
tation
based
upon
property ights
s
superior
to the orthodox Marxist
definition
based
upon extraction of
surplus
labour in
that
exploitation can be shown
to exist
in
the
absence of
employment
relations.
The
logical
proof of this
is provided n
the
model of a
subsistence
economy.
Roemer
shows
that
in
such
an
economy, agents
op-
timise
their
leisure (i e,
minimise
hours
worked)
while
maintaining
ubsistence eeds
on
the
basis of
their given
endowments.
If
a
labour
market with
uniform
technology
and
identical
subsistence
patternsexist,
then
agents
will
trade
in
labour
endowments in
order
to
satisfy
consumption
needs,
while
minimising the actual labour performed.
rhere will
be agents
who will
acquire heir
subsistence
needs
through the
purchase of
the
labour
power
of others,
and there
will
be
agents
who will
have to sell
all their
labour in
order to
meet their
subsistence
requirements.Those
who work
more than
is
socially
necessary to
satisfy subsistence
needs
are
considered
exploited while
those
who work
less than is
socially
necessaryare
exploiters.
Exploitation
is judged
on the
basis of
labour time.
From this Roemer
derives what he
calls
the
Class-Exploitation
Correspondence
Principle CECP).
Given he choice
of
hiring
labour, working for oneself and selling
labour
(or
a
combination of
these)
Roemer
constructs
five distinct
'class'
categories
on
the basis
of
given
endowments.
They
can be
described
as follows:
(i)
purecapitalists
who
only
hire
labour; (ii)
small
capitalists
who
both hire
others and
work for
themselves;
(iii) petit
bourgeois
who
only work for
then-
selves;(iv)
mixed
proletarian
who
work
for
themselves as well
as
selling part
of
their
labour
power;and(v)
proletarians
who only
sell their
labour.
Roetner's rank
ordering
puts
the
pure
capitalists nd
small
capitalists
at the
top
of
the
wealth
hierarchy
as the
richest
and
most
exploitative
members
of
society, while the mixed and pureproleta-
rians are
on
the
lowest
rungsof the
wealth
ladder,being
the poorestand most
exploited
strata.
Having constructed
he link between ex-
ploitationand class,
Roemer oes
on to show
that a
labourmarketneed
not
exist
for such
a link to
hold.
If
the labour
market s
replac-
ed by a
capital
marketwe findthat
the class
structure mbodied n the CECPstill holds.
Agents
attempt to satisfy their
subsistence
needs on the
basis of
their given
capital
endowments.
Con-sequently,
s
in
the labour
market
economy, an
agent faces
the choice
of
lending
capital to
others at a given
rate
of
interest, working one's own
capital
or
boriowing capital, or
some
combination
of
these. Thus a
producerwith
limitedcapital
endowments will
have to borrow
capital at
the given
rate of
interest
n
orderto
finance
his/her
production.
As above, at an
equili-
brium
solution
withgiven
equilibriumprice
vector, hose
agents who
work less than
the
socially
necessary labour time
are the ex-
ploitativeclass,while those who work more
than is
socially
necessary to
satisfy con-
sumption
needs form the
exploited class.
Thus, as
before, in the
rank ordering
of
classes, the
exploited are
the
borrowersof
capital while the
exploiters are the lenders
of
capital.
The significance of this
is out-
lined
by Roemer:
In
classand
exploitation
roperties
he
two
solutions are
isomorphic; he credit and
labour
markets re
functionally
quivalent.
Wecan thus
produce he
highly
articulated
class
structure
usually
associated with a
labour
market, with no institutions for
labour
exchange,
and
using just
a
credit
market.The heresy s complete.Not only
does
exploitation merge
ogicallyprior
to
accumulation nd
nstitutions
or
abour x-
change
but so does
the articulation f ex-
ploitation nto class
Roemer, 982b;
265).
Exploitation can
now be
explained
without
recourse to- any
understanding
of
wage relations
or analysis
of the labour
pro-
cess. The
conclusion
of Roemer's xercise s
that
the
inequality
of
wealth endowments
(property ights) s a sufficientcondition
for
exploitation
to
occur.
Within an
accumulating
economy,
the
analysis
s much
the
same.
As
agents
differ
in
their
endowmentsof
assets,
at an
equili-
briumsolution herewillexisttheconditions
for
exploitation
in contradiction o the
neo-
classical
gains
from
trade
arguments).
Ex-
ploitation occurs when
a
producer"cannot
possibly
command as
much labour
value,
through
the
purchase
of
goods
with
his
revenues,
as the
labour he
contributed
in
production,
and an
exploiter
s one
who
un-
ambiguously
commands more
labour time
throughgoods
purchased
no matter
how he
dispenses his revenues"
(Roemer,
1982b;
p
269).
This definition
narrows he
exploited
and
exploiter lasseswithin
he
CECP,
hence
widening the
'grey area' of
producerswho
are neither
exploited
nor
exploiting.
On exposing his model to production
technology
ets
more
general
han
the
simple
Leontief input-output matrix (where each
good is produced by precisely
one
process)
Roemer omes up with a surprise.
As he out-
lines, in order to explain exploitation
in
general echnology
models one has to
define
the concept of labour embodied
in
a com-
modity.However,when using the traditional
Morishima definition of labour embodied
(where labour embodied in a commodity
bundle
x
is the
minimum amount
of direct
labour used amongst all the
possible ways
of producingx)Roemer inds thatthe CECP
breaks down. In the face of the possible
destruction f his model, Roemer
onstructs
an ingenious,
f
somewhat
dishonest,escape
path from
the
problem.
He puts forwardan alternativedefinition
of labourembodied.Insteadof Morishima's
method
which
is to scan all
the
production
processes
n
order to find the
one with the
least direct abour used, Roemer
argues
hat
at the going equilibrium prices, one
must
scan those processes which are maximally
profitable.Thus the
labour
value
embodied
is
"
... the minimum amount of direct
labour used in producing
x
minimisedover
the set of maximally profitable processes.
This generates
a
definition of
exploitation
for which the
CECP is true
in
the
general
constant returns o scale model
of
produc-
tion"
(Roemer, 1982b; p 272).
In the
Morishimadefinition of lab.our
mbodied,
labourvalue s a function of the
technology
used and is independent
of prices.
For
Roemer'sdefinition,
however,.labour alues
are
purelydependent
n
price;priceprecedes
value. In Roemer's words, "equilibrium
prices must be known before labour value
can be said to
exist" Roemer,
1982a,p 150).
This new definition overthrows he
tradi-
tional
Marxist
view
that
values
precede
prices. It is, as Roemer is the
first to
acknolwedge,somewhat heretical.
There is
a hint of
determinism
in Roemer's
argui-
ments.
Before
we
can estimate
valuewe must
know the vector of all equilibrium,profit
maximising, prices.
Having inverted his aspect
of the labour
theory
of
value,
Roemer
goes
on
to
argue
for a labour
theory
of
exploitation.
In his
eyes
there
s
nothing intrinsicallyunique
in
labour
power that gives it the
property of
creating surplusvalue.
Indeed,
n
an
economycapable
of
produc-
ing
a
surplus, any commodity
has this
magicalproperty of creating
urplus]. f we
choose corn
as
the
value numeraire
nd
calculate
embodied
corn
values
of com-
modities
and the embodiedcorn value
of
corn,
we can
prove
that
the economy
is
capable
of
producing surplus
f
and
only
if
corn s
exploited,
n
the sense
hat he corn
valueof a unitof corn s lessthanone.There
is
absolutelynothing special about labour
power
nthis
regard Roemer,
982b; 273).
Nevertheless,
within
the
capitalist
mode
of production abourpower s the onryasset
uniformlydistributed;
o Roemer
argues f,
1480
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as historical
materialists,
we
are
concerned
with a theory that deals
with
class struggle,
the conflict between the exploited
and
the
exploiter,
hen that
theory
can
only
be
the
labour theory
of
exploitation.
For Roemer
The accumulation of capital can ... be ex-
plained,as a technical act, by choosingany
commodity
as value numeraire.
But
class
struggle
etween
roleiarians ndcapitalists
can
only be explained y
choosing abour s
the valuenumeraireRoemer, 982b, 275).
To summarise,Roemer'sproperty
rights
model of exploitation and class presentsus
with a numberof interestingand novel fea-
tures. He
begins by explainingexploitation
in
the subsistenceeconomy as being based
upon an unequal endowmentof wealth. He
goes
on to
argue
that for
such exploitation
to exist there
is
no need to have a labour
market, a credit market
will
suffice
in
its
place (heresy
No
1?).
Differential initial
wealth endowments and the consequent
trading
elations
n
endowmentsbetweenex-
ploitersand exploited leads to the presence
of a class structure, he CECP.
The argument
s
muchthe
same for an
ac-
cumulating conomy,
with Leontieftechno-
logy.
While the subsistence
equirements
re
rejectedas
being subjective preferences,
a
differentiation
f
societyinto exploiters
and
exploitedalong
class lines akin to
the
CECP
is found. On
introducing
more
general
ech-
nology sets,
the CECP
falters
when faced
with Morishima'sdefinition of labour em-
bodied. Roemer'snew
definition
of
labour
embodied
leads
us to
the
consequence
of
equilibrium prices determining
values
(heresy
No
2?).
Another
argument
for the
rejection of the labour theory of value.
Wenow have the conditions for a general
theory
of
exploitation
which
ncorporates
x-
ploitation
under
feudal, capitalist
and
socialistmodes of
production.
Roemer's
n-
genious
test for
exploitation
uses
games
theory
to construct
"contingently
feasible
alternative
states" under which
exploited
agents
could
improve
heir
welfare
by
'with-
drawing'
with their share of
society's
alien-
able and inalienable assets.
Exploitation
on the basis of
inequitable
distribution of
property rights
leads to
feudal
exploitation, capitalist exploitation
and
socialist
exploitation.
t is the last which
is
the
unique
feature of
the
general theory
of exploitation.Exploitationundersocialism
results from an
inequitabledistribution of
human
endowments. t takes he form of ex-
ploitation
based
upon
skill
and
status
(and,
presumably, ender
and
race).
The historical
task
of
the socialist transformation is to
eliminate
capitalistexpl9itationby bringing
the
meansof
productionundersocial owner-
ship. Any
resultant
exploitation
such as
skill/wage
differentialsor race
and
gender
exploitation
are a feature of socialist
ex-
ploitation
and
hence
beyond
the
realms of
socialist transformation.Roemer
concedes
that at certain historical moments socialist
exploitation may be considered socially
necessary this is so when the welfareof the
withdrawing oalition s diminishedby with-
drawing
rom the economy,
orreasons uch
as lack
of pooling of skills
or loss of incen-
tives). A
crucial element within the
game
theory,
withdrawalanalysis states
that ex-
ploited agents
cannot improve heir
welfare
or their
class status by
remainingwithin the
exploitative
economy. An individual's
class
status and
degree of
exploitation is deter-
mined by his/her given
alienable and in-
alienable wealth
endowments.
He/she can-
not improvehis/her class positionexceptby
withdrawing as a member
of a coalition
from
that economy.
Consequently xploited
agents undersocialism
cannot mprove
heir
welfare
within socialism
(unless of course
such
exploitation
is
considered
socially
necessaryfor reasonsas described
above);
and
like
the
proletariat
withdrawing
rom
he
capitalistmode
of
production
and
initiating
the
socialist
transition,
so
exploited
coali-
tions
undersocialism must
withdraw rom
that state and
hence
initiate the transition
to
the next
(presumably
ommunist) mode
of
production.
Nowthat we have he
essenceof
Roemer's
model,albeitin a muchsimplifiedform, we
can move
to our own
criticismsof
Roemer's
work.
III
Criticisms of Roemer's Model
It is
probably
not
surprising
hat Roemer's
model
has been
more
favourably
eceived
by
neo-classical economists than
by
Marxist
theoreticians.
A
reflection not
only
of the
fact that
Roemer's
highly
technical method
is
immersed
n the
language
of neo-classical
economics,
but
furthermore,
hat
Roemer's
understanding
of Marxism has
strayed
ex-
tensively
from the traditional
discipline
of
dialectical historical materialism.
Our
major
criticismof Roemer ies
in
his
rejection
of
the labour
theory
of
value and
the
surplus
abour
approach
o
exploitation.
We shall leave the
discussion
of this issue
to
the
last when
we
shall
present
our
arguments
for the
centrality
of the labour
theory
of
value in Marxist thought.
Our initial criticism of
Roemer'smodel
lies in
its inherent static
nature;
a feature
determined
y
his
use of
Walrasian, ynamic
statics,
generalequilibrium
nalysis.Despite
a
taxonomy
of
exploitation
under
socialist,
capitalist
and feudal modes
of
production,
Roemer's
method deals
only
with static
equilibria n each case. He constructs deal
states of
each mode of
production
for the
purposes
of
comparisons
of
qualitatively
different forms of
exploitation.
He shows
limitedawareness f
historicallyprogressive
transition
from
mode
to mode. At most he
argues
that
the
historic
duty
of
any
revolu-
tionary
transition
s to eradicate hecharac-
teristic form of
exploitation
of the
mode
of
productionagainst which it is
in
struggle.
There s
little
understanding
f the
dynamics
of
transitionstatesand none
whatsoeverof
the
concept
of the
dialectic.Roemer'sMarx-
ism is bereft
of the dialectic
form.
There
is no analysis in his
argumentsof
the relative autonomy of political deter-
minism
n
clatss
ormationand
revolutionary
transition.In order
o explain
revolutionary
transitionone
has to explain
class
struggle
in
somewhatmore
detailthan
Roemer
does,
in
simplistically
reducing t to the
struggle
between
exploiters and
exploited.
In order
to
understand
class
struggle one
has to be
aware hat
thereare
political
actors hat
play
a part in the
determinationof
class
strug-
gle.
As Wright
has
pointed out class
cannot
be
defined n
purely
economic
terms. "Class
is an intrinsicallypolitical concept and for
it to
serve its
explanatory
purposes it
must
have its
political
dimensions
systematically
represented within
the
concept
itself"
(Wright,
1982).
While we may
disagree
with
Wrightas
to the
degreeof relative
utonomy
of
politics
from
economic determinants
within
the class formation
matrix;
Wright's
arguments,
nevertheless,point
to a
chronic
failureon the
part
of
Roemer o break
rom
the narrow confines
of his
economistic
method.
As a
consequence f a
dynamic tatics
ap-
proach
Roemer,
ike
his
neo-classical
riends,
takes
property relations in
ideal
states as
being givenahistorically.Given that power
relations, lass and
exploitation
re
all deriv-
ed
from
inequitable
property
endowments,
this has
serious
mplications.
There s
no ex-
planation
as to the
historical
accumulation
of
wealth.
Roemer discounts
the
orthodox
argument hat
surplus
abour
plays
a
role in
capital
accumulation.
"The
accumulation
f
capital
can ...
be
explained,
as
a
technical
fact, by
choosing
any
commodity
as value
numeraire"
Roemer,
1982b;p
275).
With
no
understandingof the
historical
process of
capital accumulation
here is no
way
to ex-
plain
the
inequitable
distributionof
wealth
endowments.
A further mplicationof this is that with
an
agent's class
position and
degree
of
ex-
ploitation
determined by
his or her
given
property
endowments, there is no
way
for
such an
agent
to
improve
his or her
welfare
within he
mode of
productionnwhich
such
exploitation
s
dominant. The
only
method
by
which
the
agent
can
break such
a
deter-
ministic
hold
is
by joining
a coalition
group
of
other
exploitedagents and
withdrawing
from
that state.This
argument
eems o
con-
tradict he
struggle
of
trade unions to
raise
the
welfare and
living
standards of
their
members,
suallyexploited
proletariat,
while
remainingwithin
the confines of the
capita-
list economy. (A struggle which Marxists
have
nvariably upported
despite
he
impli-
cations of economism
of such
labour
action.)
A
further result
of
given
property
rela-
tions
is
that optimal
technique paths
are
derivedfrom those
property
relations
prior
to the
determination f an
agent's
class
posi-
tion or the
existenceof
exploitation.
Produc-
tion
techniques
are
therefore
aken
as
given
and
are
constructed
y
neo-classical
esource
allocation
exercises.
Another
point
of
debate s Roemer's on-
cept of
'contingently
feasible
alternative'
states
to which
coalitions of
agents
can
withdraw. t is difficultto take this notion
of withdrawal
iterally
since, as
Przeworski
1481
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points
out,
" ... the comparisons
of the
welfareof groups
within and without
a par-
ticular
economy
are based-exclusively
n the
properties
of static equilibria"
Przeworski:
1982;p 292).
Nevertheless
f, as we have
seen
above, agent's
class position and
degreeof
exploitation
is determinedby
their wealth
endowment,andthat the
only method
avail-
able
to
them
to transform heir
destiny
s
by
joining a
withdrawalcoalition
of agents,
thenthe conceptof withdrawal o longerre-
mains
a purely abstract,
hypothetical
for-
mulation for the
testing of exploitation;
it
acquires
a political reality
and becomes
a
form of concrete
action. Roemer
is some-
what confused
on this issue.
While the
task
of an
alternative
s to define exploitation
n
the state against which
the alternative
is
posited,
that alternative
becomes
somewhat
moreconcrete han
an abstract onstruct.
As
Roemer
outlines
... the device
for defining exploitation
con-
ceivesof agents
as exploited
at a particular
allocation,
with
respect
o a
particular
lter-
native. The formulation
ignores
...
[the]
sort
of problems suchas]:Is the realisation f
payoffs [to
coalition agents]
in
some
way
feasible?Whatare he
costsof coalition
or-
mation?
How
will
the
coalition arrange
o
distributeendowments]
mong
ts
members?
(Roemer,
1982a;p 199).
In his discussion
on
feudal,
capitalist
and
socialist
exploitation,
Roemer
s
fully
aware
that there
are costs
involved
for the with-
drawing
oalitions.
For
example,
a coalition
of
serfs
withdrawing
rom
feudalism ace
the
loss of military
protection raditionally
pro-
vided by their
lord. Roemer acknowledges
this as a veryreal cost;
but
he
argues,
unless
the coalition
can
provide
protection
for
themselvesand if the return romthe lord's
protection
s
greater
han loss of
welfare or
a serf
incurred
hrough bondage,
then
the
coalition
will be worse
off
by
withdrawing.
If this
is
so,
Roemer
argues,
then such
a
group
of agents
is not feudally exploited
n
the first
place.
The same
argument
an thus
be
applied
to
coalitions
withdrawing
rom
capitalism
or
socialism.
This leads
us
to
the
question
of how
one is to
quantify
the costs
of
withdrawal
or,
for
that
matter,
the costs
of
coalition
formation?Roemer
does not ex-
plain
howexploitedagents
can
actually orm
an
organised,
ohesive,
oalition
hrough
co-
operation,
and
furthermore,
n
what fashion
can they actually withdraw.As he implies
unless
one
is
aware
of
these costs
it
is
not
possible
to
judge
whether
a
withdrawing
coalition is
'properly
exploited'.
Another
point
of criticism
onnectedwith
the
different
forms of
exploitation
within
Roemer'smodel is that
nowhere does
he
mention the
existence,
r even
possibility
of,
race and
gender exploitation.
If
race and
gender
are seen
as
purely
inalienable,
human
property
hen
it
must be considered
a
featureof
socialist
exploitation
for
racism
and sexismdo exist in
many
socialist
states),
which co-exists
in other modes
of produc-
tion (although
manywould argue hat
socia-
list societies
have been
far more successful
at fighting racistand sexist
attitudesand
ex-
ploitation). It could be said, however, hat
raceand genderexploitationare fully realis-
edin the capitalistmodeof production, uch
as
in
low-wage emale sweat shop
labour
in
Hong Kong, or low-paid (relative to their
white colleagues) black miners in South
Africa. Roemer seems to be unaware hat
racismand sexism do not only act as forms
of social control and legitimation but are
very real methods of economic exploitation.
This leads us to Roemer'sexplanationof
the socialist exploitation.
As he outlines
in-
equalities
exist under socialism
due to skill
differentials, e, inequitable
distributionof
inalienable, human, property. Hence the
basis of socialist exploitation. Another
ex-
ploitative eatureundersocialism,
he
argues,
is status exploitation. Benefits derived
through membership of the party, fringe
benefits acquired by party and state-
bureaucratic lites. Although
such status
ex-
ploitation is anomolous to socialism, it is a
common feature
of
socialist
societies where
Stalinist
party
structures
predominate (it
should be noted that only the Chinese have
attempted to eradicate status exploitation
during their CulturalRevolution,
although
it would seem that the attitude of the pre-
sent leadership
s to
provide
acit
encourage-
ment to status
exploitation).
Under certain
conditions, capitalist exploitation may
also
be
a
feautre of
socialism, implementedby
the state
in
order to raise the level
of the
productive forces.'
Skill and
wage
differentials are
for
Roemer a necessary feature
of
socialism:
It is not
the
historical
ask
of
the socialist
transitiono eliminate ocialist
xploitation.
What nequalitiesxistbecause f differential
remunerationo
skills
should
be
expected
under ocialismRoemer, 982a; p 259-60).
Consequently
Roemercriticises he Chinese
Cultural
Revolution
or
attempting
o
com-
bat inequalities
that
lay beyond
the task of
socialist societies.
Their
efforts
at
"the
eliminationof skill
wage
differentials ed to
a
retardation
n
development, labour pro-
ductivity
and material welfare
...
these
egalitarian experiments
were
premature"
(Roemer, 1982a; p 241).
In Roemer's
eyes,
therefore,socialism's
concern
lies solely
in
raising he levels
of the
productive
orces
of
society,
and
not
in
transforming
he social
relations of production.
Despite
Roemer'sconcern
in
incorpora-
ting inequalitiesunder socialismwithin his
general theory of exploitation,
we
are not
entirely
convinced hat his
method
of-doing
so
provides
us
with
a
satisfactory
basis on
which to
analyse
the laws
of
motion
of
socialism.
In
our opinion
an
understanding
of a
given socialist society
must
incorporate
a
historical
analysis
of the
process
of
revolu-
tionary change,
of
the
class
structures
and
dynamics
hat
bring
about the
revolutionary
transformation.These are the forcesthat
in
*
Capitalistexploitation,
Roemer
argues,
s
apparent n Yugoslaviawhere there exists
unemployedabourwhichcould mprovets
welfare f it was given ts percapita hareof
the means of production.
many respects
work towards
he determina-
tion of the nature
of the
socialist
society.
Finally,
we believe hat
no analysis
of socia-
list societies
s complete
without
an account
of the stateand
the bureaucracy.
he mono-
lithic structure
of the state
and party under
socialism has to be
adequately
explained.
Roemer,
t seems, is
apparently ware
of the
monolithic
state and the relative
autonomy
that it and the
bureaucracy
njoy,yet he
does
not include this withinhis discourseon the
socialist
mode of production.
It is precisely
he role
of thebureaucracy
nd
the state
which obscures
he nature
of the
property'relations
etween
he
means f
pro-
duction
and the
workers Roemer,1982a;
p 253).
Consequently
it seems to
us that it is
far
more preferable
o
use Marxist
theories of
the
state
than Roemer's
heory
of exploita-
tion to analyse socialist societies.
Roemer
notes that
there is
a tendency
amongst
some
Marxistwritersof
confusing
alienationundersocialism
with
exploitation
under
capitalism
by placing
an undue
em-
phasisupon the analysisof the labourpro-
cess.
"A
misplaced
emphasis on
the labour
process",
he argues,
"can lead to
a faulty,
or at least non-materialist
analysis"
(Roemer,
1982b;
p 267). Study
of the labour
process
concerns tself
with the organisation
of the workplace,
and giventhat
Roemer e-
jects
the
surplus
labour value theory
for a
property
rights
model, such
wor,k s under-
taken
by
Braverman
nd
others
do not, for
Roemer,
hed any light
on exploitation.
For
him
exploitation
can
be logically
divorced
fromthe
point
of production.
A
directresult
of his
rejection
of the notion
that exploita-
tion is
necessarily
inked
o
a
market or the
exchangeof labour power.Roemer's histo-
rical materialism'
concetns
itself with
an
anlysis
of
property
relations
rather han
the
organisation
of work. In
response
to
the
tendency
to
equate
alienation
under
socia-
lism with
exploitation
undercapitalism
due
to similar
forms of organisation
at
the
workplace,
he argues
hat the distinguishing
features are
the
given
property
relations.
When
two
different
regimes
give
rise
to
similarorganisational
ork
forms,
t
is
the
property elations
hat define
the
nature
f
exploitation
nd
surplus
xtraction,
ot
the
organisational
ork
ormswhich
define
he
nature f
alienation
Roemer,
982b;
267).
Whilewe acknowledge
he distinctionto
be
made
between
alienation
and
exploita-
tion,
Roemer's
dismissal
of the labour
pro-
cess
analysis
as
having
little
significance
leads
us back
to our
first
and most
substan-
tive criticism
of
Roemer,namely
his
rejec-
tion of
the
labour
theory
of
value,
and
with
it the
idea
that
surplus
value is created
by
labour
at
the
point
of
production
and,
hence,
it
is
at
the
point
of
production,
i
e
within
the labour
process,
hat
exploitation
is
located
in
the
capitalist
mode of
produc-
tion. Roemer
argues
hat
. .. to characterise
arxian
xploitation,
i e
exploitation
withinthe capitalist
naode
of
production]
n termsof property
elations
s
1482
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superior
o doing so
in
terms
of
surplus
value.The
idea of property
elationsmakes
clear
what
s
the ethical mperative
hen
one
speaksof
exploitation
n that t allowsus
to
conceive
of
an
alternativen which
he
pro-
letariat or
the exploited
coalition]has ac-
cess
to its
percapita
shareof
society'spro-
ductive
assets
(Roemer,
1982b;p 280).
We
now
turn to
our
defence
of the labour
theory
of value.
IV
Labour
Theory
of Value
and
Its
Ethical
Imperative
There s,
it seems,
a
misconception
on
the
part
of
many
writers nd Roemer
s
certainly
not the first,
as to the true
meaning
of the
labour theory
of value. There is a
tradition
amongst
some mathematically
inclined
economists
imbued
in
the
method of
neo-
classical economics,
and
yet identifying
themselves
with the
political
economy
school,
and herethe
names of
Morishima,
Catephores
and
Roemer
spring
to
mind,
to
conceive Marx as a proto-mathematical
economist
whose objective ay
in
construc-
ting
economic
models.
These writers have
been
concerned olely
with one
aspect
of
the
value
theory, hat
is the value magnitude
or
the
determination
f
commodityprices
and
have neglected
the
critical qualitative
features
of value
theory,
namely
the value
form and the
substance of
value.
This
betrays
a
very
odd,
to
say
the
least,
reading
of
Volume
I
of
Marx's
"Capital".
n
keep-
ing withthis
tradition
Morishima
ransforms
the
classical
Marxist
theory
of value
as
follows:
The classical
labour
theory
of
value is
rigorouslymathematisedn a familiarorm
parallel
o Leontief's
nter-sectoral
rice-cost
equations.
The hidden
assumptions
re
all
revealed nd, by
theuseof
the mathematics
of
the
nput-output
nalysis,
he
comparative
statistical
aws
concerning
he behaviour f
the
relative alues
f commodities
re
proved.
There
s
a dualitybetweenphysical
utputs
and
valuesof
commodities,
which
s
similar
to the
duality
between
physical utputs
and
competitive
rices.
t
is
seen hat
the
labour
theory
of
value
may
be
compatible
with
the
utility heory
of consumers' emandor
any
of
its
improved
ariations
Morishima,
973;
p
5).
The labour theory of value does serve a
purpose
n
determiningprices
of commodi-
ties,
under general commodity
production,
by aggregating
he
sociallynecessary
abour
time embodied
within
the
commodities.
This, as Marx
notes in Volume3
of
"Capital".
eads
to
first
approximations
or
commodity prices.
In other words those
commodities
with
identical
exchangevalues,
that
is
equal
amounts of
socially
necessary
labour time embodied within themwill
ex-
change
on a one-to-onebasis.
Consequently
prices
of commodities can be obtained
as
ratios of the
money commodity,
i e
the
representation
of general, social,
abstract
labour.Any distortionof the pricefromthe
socially necessary
labour time
embodied
within the commodity
is due to the short
term vagariesof supply
and demand;
never-
theless,
as a first approximation
labour
values and prices
will tend to be
equated.
But
there s more to
Marx'svalue theory
than purelya formation
o determineprices
on the basis
of social labour
embodied
within
commodities. That
takes us little
further
han the Ricardian
heory of
value.
Ricardo'sprime
concern lay
in
estimating
prices for which he picked labour as the
value numeraire.What sets
Ricardo'svalue
theory apart from
Marx's
was that
Ricardo
failed
to realise
hat labour
had
two
distinct
forms.
In order
to understand
his one
needs to
explain
Marx's
method.
Whereas
Ricardo
and more recently
he neo-Ricardians
on-
cern themselves
with
prices
at
the
level of
appearance,
and
hence
fall
into
the
trap
of
vulgareconomy
whichMarxdescribes
"feels
especially
at home
in
the alienated
external
appearances
f
economic
relations"
Marx,
1959;p 796);
Marx abstracts rom
value at
the level of superficial
appearances
o
pre-
sent the real process underlying it, the
essence
or its inner
nature.
Havingseparated
the
essence
from
appearance
one
simply
retracesone's
steps back to
the
level
of ap-
pearance;
he
apparent
orm
is
consequently
realised.
Marx applied
this
method
of abstraction
to the
apparent
or
specific
commodity
form
to findthat property
which was common to
all
commodities,
namely simple
labour or
labour
in
its
social form. That
is, while
labour
produced
commodities
which bore
use-value
and thereforewere
he
productof
a
concrete
and specific
type of productive
labour activity,
once commodities
were
exchangedthey also began to embody ex-
change
value.
Thus
what
was common
amongst exchanged
commodities was not
only
use-values (without
which
of course
theycould
not be
traded)
but
exchange
alue.
They
were the product
of labour, general
social labour,
abstract
labour,
i
e,
sheer
physical human
energy.
It was the posses-
sion of this common
property
of commodi-
ties
that led to
their
exchange.
Thus under
exchange
relations
all
concrete
or
specific
productive
abour activity
could be
reduced
to
abstract
or social
labour.
Ricardo's
value numeraire
of
concrete,
specific
and
heterogeneous
abour
is hence
inadequate n estimatingthe value magni-
tude or the ratio
or basis of
exchange
bet-
ween two commodities.
As Marx
noted
Ricardo's
istake
s that
he
is concerned
nly
with
the
magnitude
of value ...
But
the
labourembodied
n
[commodities]
must
be
represented
s social
labour
(Marx,
1971;
p
131).
Roemer,
like Ricardo
and
the neo-
Ricardian
writers
n the transformation
ro-
blem debate
has,
it
seems,
failedto
grasp
he
dual character
f labour; he
distinctionbet-
ween ndividualconcrete abourand
general
social
labour. Under general
commodity
productiona tradedcommodity
is a bearer
of exchangevalue, and the exchange value
of the commodity
is the aggregate
of the
abstract abour
embodied
within
it,
in
other
words socially
necessary abour
time. With
abstract abour
as
the
property
or
characte-
ristic
commonto all
traded ommodities
and
the measure
of exchangevalue
it
is,
there-
fore, also
the essential money
commodity.
The significance
of this finding that
all
commodities earing
xchange
alueembody
abstract ocial
labour
s not
simply
to assist
in the
purely accounting
task of price
esti-
mation, but to understandhat all commo-
dities
are the bearers
of social
relations
of
production
between
commodity producers.
Withinbourgeois
ociety he directproducers
of commodities
are
increasingly
detached
from heirexchange
orum, he
market
place.
Consequently
he
social relations
of
produc-
tion between producers
are
represented
s
social
relations
between
products.
The
com-
modity
akeson a
social form
and thus gains
a relative independence
from
its
producer.
It
becomes
reified and henceboth mystifies
and
dominates
ts
producer.
The
phenomena
of commodity
etishism
s no
illusion,
rather
its form is real,
but
it
obscures
he
underly-
ing relationshipbetween commodity pro-
ducers such
that they are expressed
as
material elations
between abour
and social
relations
between
commodities.
The
pro-
ducersof commodities
or
exchange
do
not
perceive
their
products
as social
objective
forms embodyinggeneral
abour
but rather
as havingmystical
and
sensuous
characteris-
tics,
consequently
he social
aspect
of
labour
is shrouded
from their view.
This is
the
'natural' outcome
when
commodities
are
transformed
nto exchange
alues.
n the con-
tradictory
nature
of
capitalist production
It
was solely the
analysisof
the
prices
of
commodities
which ed
to
the determination
of the magnitudeof value,and solelythe
common expression
f all commodities
n
money
which
ed
to theestablishmentf
their
character
s values.
It
is howeverprecisely
this finished
ormof
the
world
of
commodi-
ties-the money
form-which
conceals he
social character f
private abour and
the
social relations between
the individual
workers, y
making hose relations
appear
as relations
etweenmaterial
bjects, nstead
of
revealing
them plainly (Marx, 1976;
pp 168-69).
The
consequence
f
this
for commodity
pro-
ducers
s
that "their
own movementwithin
society
has for them
the
the form of
a move-
ment made by things, and these things far
from
being
under their control,
in
fact
con-
trol them"
(Marx,
1976; pp
167-68).
Thus
we
arriveat what
may
be
called the
'ethical
mperative'
f
historicalmaterialist
study, praxis.
The
lifting of
the veil of
false
consciousness,
which shrouds
the minds of
direct
commodity producers
through
the
fetishism
of
commodities,
is the
political
imperative
o which Marx directs us.
Roemer
argues hat the superiority
of the
propertyrights
approach ies
in
its explicit
statement
f the ethical
mperatives
f histo-
rical
materialiststudy by positing
'feasible
alternatives'
o exploitations
within a given
modeof production.While t is undoubtedly
true that the
labourtheoryof value s of
use
1483
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8/12/2019 Nadvi, Khalid - Exploitaition and Labour Theory of Value. a Critique of Roemer's General Theory of Explotaition an
7/7
August
31,
1985
ECONOMICAND POLITICAL
WEEKLY
to
us purely or the purpose
of analysing
he
capitalistmode
of productionand
no other;
yet it is within
the labour theory
of value
that the 'ethical
imperatives'
lie. If, as
Roemer argues, our taks
is to explain
and
direct class struggle,
the only
fashion
by
which this can
be done is by understanding
the process of valorisation. Labourcreates
surplus
va)ue,
capital
utilised
n the
produc-
tive process can itself
be reduced
to em-
bodied dead abour,
he labQur
f a
previous
production
process. It
is by way of this
method
that
we
can
understand he history
of
capital
accumulation.
The labour
theory
of
value,by
explaining
he
process
of
surplus
value creation
at the point of production,
i
e,
within the labour process,
brings to us
the
proof
of
the existence
f
capitalist
xploi-
tation.
The false consciousness that arises
through ommodity
etishism, e, the
domi-
nation and
mystification of
the producers
by
the product
n commodityexchange
eads
naturally o the imperative f politicalaction
in
raising
he veil
from
the true
and
contra-
dictory
nature of
capitalist
production.
The
beauty
of
the labour
theory
of value
is that
it provides
the links between com-
modity exchange,
the
labour
process
and
capitalistexploitation.
By encapsulating
all
three
within
one
unified
structure,
Marx
is
able to
put
forward
he true'ethical
mpera-
tive' of
political
action. Elson
summarises
it as follows:
WhatMarx's
heoryof valuedoes
s provide
a basis for showing
a
link
betweenmoney
relations commodity
xchange] nd labour
process
e'ations
n
the process
of
exploita-
tion.Theprocessof exploitations actually
a
unity
... Neither
money
relations nor
labourprocess
relations n themselves
on-
stitute
apitalist
xploitation;
ndneither ne
can
be
changed
very
much
without
accom-
panying
hanges
n
the other.
Marx's
heory
of
value
s able to show his
unity
of
money
and abour
process
because
t
does not
pose
production
nd
circulation
s two
separate,
discretelydistinct spheres,
does
not
pose
value
andpriceas discretely
istinct ariables
...
The
key
to understanding
his contradic-
toryprocess of
capitalist xploitation]
s that
although
money
elations nd abourprocess
are
aspects
of
the
same unity,
internally
dependenton other, they are nevertheless
relatively utonomous
romone another. n
that
relative
utonomy
ie
the
seed
of
poten-
tial crisis.
This
is important olitically,
not
because
uch
a
crisis
n
itself
constitutes
he
breakdown f capitalism-it clearly
does
not-but
because
it
indicates
a
potential
space
for
political
action
(Elson, 1979,
pp
172-73).
This is the
true 'ethical
imperative'
of
dialectical
historical
materialism,
not
Roemer's
'alternatively
easible states'.
In
rejecting
he
labour
theory
of
valueRoemer
rejects
the Marxianmethod.
Consequently
his
anslysis
of
the
capitalist
mode whichcan
only be applied at the level of circulation,
concerns
itself
solely
with
superficial
phenomena
and fails to grasp he
innercon-
tent of generalised
commodity production.
V
Conclusion
John Roemer'sproperty
rights model
of
exploitation is undoubtedlyunique; never-
theless,
as we have shown
in our
discussion
on the labour theory
of
value,
it is devoid
of
a
crucial aspect
of Marxian political
economy, namely,an explanation
of social
relations
of production
betweencommodity
producers
as embodied
within the commo-
dity
form.
His failure o
grasp he dialectical
method
reflects his concern
with the superficial
aspects
of economic
modelling,consequent-
ly the essence
of commodity
production
escapes
him. Roemer's attempt
at putting
forwarda taxonomyof
exploitation
which
incorporates
eudaland
socialistexploitation
with capitalistexploitationwithin a single,
highly technical,
model has been described
by
some commentatorsas
a 'tour de force'
(a
reflection possibly of the mathematical
fetishism that
such
commentators
suffer
from). It is certainly audatory
hat Roemer
has attempted o tackle
the thorny question
of the nature of the socialist mode
of
pro-
duction. As
we areall fully aware,
socialist
societies are
presently
undergoing
a crisis of
immenseproportions.
A crisis of the legiti-
macy
of the
state and
the crisis of aliena-
tion
in
the
workplace.
The sole
attempt by
a
socialist
tateto
comprehensively
eal with
such
crisis,
namely, the Chinese
Cultural
Revolution, s under ridicule.Marxistshave
to focus
their thoughts
on these questions,
for it is
only
by presenting
a clear picture
of the
socialist
mode can they muster
the
progressive
orces or political
action against
the
capitalist
mode
of
production
and its
resultant orm of social relatiQns.
n order
to do
so one needs
the labour theory
of
value.
It is far from
being
iconoclastic
to
sug-
gest
that
if
there
s
a centralconcept
within
the
Marxian
method,
t lies
within
he
labour
theory
of
value.
Without
it there
cannot be
a
Marxian
analysis
of
bourgeois
economy
nor an
understanding
of the
political
im-
perativefacing those who desireto change
such societies.
Roemercannot
have it both
ways, rejecting
the labour theory
of value
and still
proclaiming
himself
as
a
concern-
ed
Marxist.
The
question
then
that has
to be faced
is
where
does
Roemer
really
lie. We have
argued
that
his
analysis
cannot be seen as
Marxist; nor, despite
the
extensive
use
of
general equilibrium
models,
can
it be con-
sidered
as neo-classical.
His
concern
with the
apparent,
phenomenal,
form
of economic
relations,
his failure to
recognise
abstract
labour
as the
common
denominator
of all
commodities
and his
arguments
on
price
preceding aluewouldsuggest hat Roemer's
true
company
lies
amongst
the neo-
Ricardianswho occupy the expansive
and
ill-defined grey area separating the polar
campsof the Marxists
nd the neo-classicals.
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