THE SYSTEM OF CAPITALISM.

Otago Daily Times, Issue 20991, 2 April 1930, Page 6

THE SYSTEM OF CAPITALISM.

TO THE EDITOR, S lßj _l shall bo pl-eased if you will allow me space to deal as briefly as possible with the writings of Mr Sivertsen. I wish first of all to reiterate a former statement by myself that everything owes its existence to a cause. It follows that if vm would understand the origin _ and nature of the present form of private ownership of the means by which human society secures its means of subsistance—■ lard, tools, machinery, etc. —we can do so only by recourse to the study of ite historical development, together with its relation to the universal process itself. A study of biological, social, and economic history or science goes to show that the present system of private ownership is the natural and logical outcome ot tlie various systems directly preceding it in the course of the evolution of the development of human society from lower to ever higher forms of life. It is the necessity of an individual course of study that I have tried to impress on your correspondents, who support the exuding form of ownership. A little thought on their part should serve to prove the saying, "You canuot impart knowledge to anyone, it must come first-hand through experience. As it is utterly impossible for me to deal fully at one time with what I would term the mass or maze ot economic contradictions contained in Mr Sivertsen's letters, I intend to ask him to furnish some proof or explanation of them. I would state first of all that if we would explain, any particular form of I society, its institutions, etc., we can do so only by a recourse to its own peculiar ' mode of production. This beinp; so,, tire question arises as to what distinguishes the present mode of production from the other forms directly preceding it in history. The answer to this is that under the present system of production, known as capitalism, the products of labour tain: on for the first time the form of commodities. Marx says: "The wealth of those societies in which the capitalist made of production prevails presents itself as an immense accumulation of eommodities, its unit being a single commodity." Tire difference between a product and a commodity is that whereas a product ia produced" solely for its use (value), a commodity is produced solely for its exchange —value. Production to-day is carried on, not for use as formerly, but for ex-value, not exchange-value, which would only amount to simple reproduction, but for surplus ex-value or profit. Can Mr Si vertsen deny that the ultimate aim and object, the Alpha and Omega, the beginning and end, of all the capitalist strivings ia the creation of a surplus ex-value, and ox-value takes on the form of money itself? The production of goods or'commodities is a necessary condition imposed on the capitalist producers by their own peculiar mode of production, because goods or commodities are the material depositories of all ex-values. This being so, I would say, in contradistinction to Mr Sivertsen, that whilst it is true the capitalist farmer who grows wheat and the capitalist baker who bakes bread both perform acts in the production of goods, such acts on their part arc performed solely in order to create a surplus exvalue, money. The capitalist owner of commodities is not concerned as to the particular use-vahre of his commodities, or their ultimate effects on the consumer. His conscience reeks not of the nature of the goods he produces, whether they be Bibles, or preventatives, or bread or dyed-in-the-wood whisky. His only concern is that the goods he produces may be useful to others, so as to enable him to realise (by a sale) their ex-value. The truth that the labour process is a process carried on solely in order to create surplus ex-value (money) is seen, whenever we take recourse to the capitalist balance sheet. Contained in your issue of the 28th is a report of the fifty-first annual meeting of the New Zealand Drug Company, Ltd. The net profit accruing to the company as a result f the year's operations is stated in the director's report to be £71,909. As the amount of capital money expended during the labour process is not stated in the report as published by you, we will assume for our purpose that the amount of the means of production expended by the company w-as £IOO,OOO, and that the receipts were £171,000. A glance at the above ligureß is sufficient lo show that the original amount of £IOO,OOO thrown into the labour retort has not only been preserved, but has expanded itself. What was formerly £IOO,OOO now appeal* as £171,909, and this goes to show that our capitalist has accomplished his set purpose'.of creating money. Can Mr/ Sivertsen deny that it is this additional surplus exchange value, produced only within the sphere of production, and (lowing directly as a result of tho labour process, that forms the only source extant, from which only may all profits be derived? To my mind sufficient has been said to prove that the capitalist process of production is a process carried on solely for surplus ex-value money. Again, Mr Sivertsen says, " What is now required 1 is a clear understanding that value and ' price are quite two different things, and that the system in vogue takes uo con- ! sideration whatever of the cost of proi duction when the exchange price' of com- ' modifies is fixed.'' With regard to the former part of the above statement. I would say quite so. and add that I for one would welcome a clear explanation by -Mr Sivertsen himself concerning it. \ With this end in view. 1 now call on Mr j Sivertsen to furnish us with a clear, con-

rise definition of the theory of ex-vnlue.. ' as to how the cx-vulues of commodities | are determined, etc.? Having done so, he might then proceed to give us a further explanation as to how the prices of commodities are" determined Further, in regard to the term " cost of living," contained in the latter part of his statement, I ask, Does Mr Sivertsen, when speaking of the cost of production, refer in any way to value? Are the two expressions synonymous? If not, will he inform us what lie means by the cost of production and how it is determined? Mr Sivertsen also says: "It is the wages (or the prices of the commodity labourpower) of labour that determines the cost of There is one further question I desire to ask Mr Sivevtsen. Given a fall in the prices of all I commodities in general by one half —eay, I from 10s to 5s —would_ such fall increase j the demand? If so, will ho please ex- ( plain how it be?—l am, etc., I GItEC.