Thank you for the excellent summary. A point of clarification (entirely my fault, I was unclear). Marx’s ‘surplus value’ is a polemical conception of little analytical value: a typical degraded product of activist scholarship. There is, however, a useful concept of surplus (ask any archaeologist). I should have made it clear that I was not saying surplus value = surplus. As is not uncommon with Marx (and activist scholarship generally) his concept of surplus value slides between invoking a useful concept and a polemical weapon.
Surplus is defined relative to minimal subsistence.
Suppose you own a farm and I work on it. Each of us needs $10,000 worth of food per year to live on. I produce $100,000 worth of food per year, and you pay me $70,000 a year, leaving you with $30,000. That $30,000 is your profit. But your surplus is ($30,000 - $10,000), or $20,000. My surplus is ($70,000 - $10,000), or $60,000.
LOL. Reminds me of the day we taught our 7 year old grandsons about gold mining using a youtube video. Nothing like catching the little kleptocrats interests early on.
Once again, thank-you for an excellent response, which I will of course highlight when Lorenzo's next essay is published (probably next Tuesday; I'm going to try to stick to that regimen).
I have now posted a piece on my own Substack that sets out the surplus extraction dynamics in more detail, making it explicit that Marx’s concept of surplus value is not the same as surplus in the sense I use it.
Wow. That's a lot of declarative statements that are situation dependent, nevermind that what is required for subsistence is highly dependent on the situation. And I don't think most government redistribution can be accurately labeled as surplus. I wouldn't say shared infrastructure nor many govt services are either. Rent-seeking is but that and other government expenditures I'd concede are taken from surplus are a rather small part of the total.
"What more food production mainly means is more babies.“
In most parts of the world with the least surplus, family size has been decreasing as surplus increases for the last few decades.
Re: "But poor places are lawless, because the stationary bandit has little incentive to invest resources in policing a locality that does not generate much surplus."
A stationary bandit, who is contemplating investment in policing, wouldn't ask, "Does the locality generate much surplus?". Instead, the stationary bandit would ask, "Will the locality generate much surplus if I invest resources in policing?". Investment is future-oriented.
The question arises: Would government investment in policing in poor localities -- say, "inner cities" in the USA -- enable these localities to generate a lot of surplus?
Some people say: Yes.
Some people say: Not without major complements; for example, school reform and welfare reform.
Some people say: No, culture is too hard to change, or the locals can't compete in the marketplace.
Some people say: No, the tax base is undermined by very disproportionate ownership of real-estate by tax-exempt non-profits (churches, government buildings, etc).
My point is that there are major scenarios in which the stationary bandit makes localities poor, via bad policies.
This approach can be used to analyze other policies that lead to family reduction and increase government involvement; for example, the pressure for 'gender equality' - read, two-income families - and public schools, to minimize non-taxable labor and increase tax receipts before accounting for child development.
Thank you for the excellent summary. A point of clarification (entirely my fault, I was unclear). Marx’s ‘surplus value’ is a polemical conception of little analytical value: a typical degraded product of activist scholarship. There is, however, a useful concept of surplus (ask any archaeologist). I should have made it clear that I was not saying surplus value = surplus. As is not uncommon with Marx (and activist scholarship generally) his concept of surplus value slides between invoking a useful concept and a polemical weapon.
What is the difference between "surplus" and profits?
Surplus is defined relative to minimal subsistence.
Suppose you own a farm and I work on it. Each of us needs $10,000 worth of food per year to live on. I produce $100,000 worth of food per year, and you pay me $70,000 a year, leaving you with $30,000. That $30,000 is your profit. But your surplus is ($30,000 - $10,000), or $20,000. My surplus is ($70,000 - $10,000), or $60,000.
LOL. Reminds me of the day we taught our 7 year old grandsons about gold mining using a youtube video. Nothing like catching the little kleptocrats interests early on.
Once again, thank-you for an excellent response, which I will of course highlight when Lorenzo's next essay is published (probably next Tuesday; I'm going to try to stick to that regimen).
I have now posted a piece on my own Substack that sets out the surplus extraction dynamics in more detail, making it explicit that Marx’s concept of surplus value is not the same as surplus in the sense I use it.
https://lorenzofromoz.substack.com/p/the-niche-creating-species
Wow. That's a lot of declarative statements that are situation dependent, nevermind that what is required for subsistence is highly dependent on the situation. And I don't think most government redistribution can be accurately labeled as surplus. I wouldn't say shared infrastructure nor many govt services are either. Rent-seeking is but that and other government expenditures I'd concede are taken from surplus are a rather small part of the total.
"What more food production mainly means is more babies.“
In most parts of the world with the least surplus, family size has been decreasing as surplus increases for the last few decades.
Re: "But poor places are lawless, because the stationary bandit has little incentive to invest resources in policing a locality that does not generate much surplus."
A stationary bandit, who is contemplating investment in policing, wouldn't ask, "Does the locality generate much surplus?". Instead, the stationary bandit would ask, "Will the locality generate much surplus if I invest resources in policing?". Investment is future-oriented.
The question arises: Would government investment in policing in poor localities -- say, "inner cities" in the USA -- enable these localities to generate a lot of surplus?
Some people say: Yes.
Some people say: Not without major complements; for example, school reform and welfare reform.
Some people say: No, culture is too hard to change, or the locals can't compete in the marketplace.
Some people say: No, the tax base is undermined by very disproportionate ownership of real-estate by tax-exempt non-profits (churches, government buildings, etc).
My point is that there are major scenarios in which the stationary bandit makes localities poor, via bad policies.
If the bad policies result in less surplus to tax, then the stationary bandit is leaving money on the table.
Yes. And the whole piece assumes homo-economist when the reality is most players are far from that.
Among other things, bandits are more concerned with staying in power, staying out of jail, not getting murdered, etc than maximizing surplus.
This approach can be used to analyze other policies that lead to family reduction and increase government involvement; for example, the pressure for 'gender equality' - read, two-income families - and public schools, to minimize non-taxable labor and increase tax receipts before accounting for child development.