Re: What is profit? (was: Re: [ox-en] Re: "At Cost")
- From: "Patrick Anderson" <agnucius gmail.com>
- Date: Sun, 21 Sep 2008 17:14:02 -0600
Paul Cockshott wrote:
If you look at industrial statistics you will find that value
added in industries correllates to around 95% with their wage
bills, implying that value added has a lot to do with employees.
I did not say 'value', I said 'profit'.
Profit is the difference between owner costs and consumer price.
Wages are a *cost* of production.
Wages are not profit, wages are on the other side of the equation!
Profit = Price - Costs
Certainly workers add value to production, otherwise why would they be
paid a wage?
Although I do not fully agree with Stefan's formulation here, I think
that what he means is that in perfect competition goods will sell
in proportion to the labour required to produce them.
In perfect competition "goods will sell" (the consumer price will be)
EXACTLY the combined costs of production, which of course includes but
is not limited to wages.
Competition is only perfect when every *consumer* has sufficient
ownership in the physical sources (Capital) required for that
production. The consumer needn't have the skills to 'operate' the
Capital, he only needs ownership.
For instance, if you own an apple tree, you might pay someone else to
harvest the apples, and would pay those wages as a cost. You would
also have to pay for things like fuel, water, property taxes, tools,
etc., but you wouldn't pay more than cost. Your price would be
exactly cost. You wouldn't pay profit, for who could you possibly pay
it to?
Patrick:
If so, are you saying "consumer price" would equal "owner costs"? If
so, then doesn't that mean profit would be zero?
Paul:
No it does not imply this. Value added can be proportional to labour
provided that the customary share of value added between wages and
profits is approximately the same in all industries.
Why are you talking about "value added"?
I'm not talking about "value added", I'm talking about the difference
between owner costs and consumer price.
If profit would be minimized, then wouldn't that "cut into" the
perceived reward due the worker according to Marx's claim that surplus
value belongs to the laborer?
Marx does not say that surplus value belongs to the labourer, rather
he says that it belongs to the owner of capital. If private capital
did not exist, thus in a society of freely
associated individuals, he envisaged the surplus belonging to society as a whole
to be used for provision for those unable to work, as social
insurance funds, social investment etc.
State Socialism? Blech!
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