PRODUCTIVITY, CAPITAL INTENSITY AND ELEVATED REVENUE PER EMPLOYEE.
July 12, 2018 2 Comments
The effect of revenue per employee on average productivity pdf
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“It therefore follows that each of the 300,000 workers in Starbucks who work with $48,000 of capital,need produce a smaller quantum of profit than the 14,000 workers in Phillips who each work with $388,500 capital, if similar rates of profit are to be achieved. And this is the nub of the problem. The equalisation of the rate of profit via the pricing system ensures that value is transferred from the below average composition (labour intensive) industries to the above average composition (capital intensive) industries, or from Starbucks to Phillips. Starbucks sells its coffee at a price below its value and Phillips sells its oil at a price above its value. Its productivity is reduced while Phillips’ productivity is enhanced.”
Very good. Might phrase it differently, but agree in principle. Starbucks receives less value in the exchange process for its products, while Phillips receives more due to the price mechanism acting to distribute the total surplus value in proportion to the size of the capitals and create a general rate of profit.
Well said. The real problem is that in a post-capitalist economy, where an objective pricing mechanism is obligatory, so workers can be rewarded for their collective effort through falling prices, this deviation of market prices from their actual costs of production will no longer be tolerated. These objective prices will also enable conscious planning. Prices will be adjusted downwards where workers work with above average amounts of means of production and adjusted up where they work with less. Oil will come down in price and coffee will go up. It will come as a revelation to most people what things really cost. What was considered really expensive may turn out to be cheap. It will present a huge statistical effort, most probably lasting years, before all the messy prices of capitalism are unravelled. But until we have an objective pricing system in place and it is working, there can be no utopian talk of “doing away with prices”.