Wealth centralization in a free-market?

Economics Economics Questions
101

So a maid, a masseuse, a secretary, and a waiter earn unproductive wages? Anyone exclusively employing them would not be a capitalist, and a society exclusively comprised of these employees and employers would not be capitalist? Btw, why pay (employ) anyone to do anything which would be unproductive?

A maid and a masseuse earn unproductive wages as long as the consumer employs them directly. They do not produce a commodity for someone else–a commodity being a product that can be exchanged for money (or another commodity, technically). A secretary and a waiter contribute towards the making of a sellable product. So I think they would be productive workers. People “employ” unproductive workers for the use-value they produce while they employ productive workers for the value they produce. Think of it this way: in unproductive labor, the employer and the consumer are the same person. In productive wage labor, the employer, employee, and consumer are three different people. The employee and consumer could also be the same person, as in the case of serfdom. Or all three could be embodied in one person, as in subsistence farming. These differences are vitally important in defining the nature of the economy.

(BTW, productive and unproductive labor is Marx’s terminology. Unproductive is not a derogatory term in this sense. It is not meant to imply that unproductive workers are somehow inferior or socially unimportant.)

Anyone intends to profit by doing whatever they are voluntarily doing – whether they have actually profited after the fact, or not. All acting economic agents are speculators, and a profit (i.e. an improvement of one’s satisfaction/situation), after the fact, is not guaranteed. So some businesses (and people) establish that they have become unprofitable after their actions/decisions have been made. Perhaps they should not have done what they thought would bring them a profit or more satisfaction. Life is risky.

I still don’t like this definition. Suppose a company spends $10,000 to produce X number of widgets. After it produces them, it discovers that it can’t sell them for more than $8000. It has two options: sell them for $8000 or throw them away. If it chooses to sell them, your definition seems to imply that they would profit off of this sale–since selling them is better than throwing them away. But this is completely contrary to the way I and most other people use the term. To me, profit (or loss, if negative) is the difference between the quantity of a particular thing spent vs. the quantity gained within a a particular cycle (whether defined by time or the completion of certain actions). So this company is not unprofitable because it would have been better off doing something else or because it didn’t achieve what it aimed for (almost every business could be considered unprofitable by this standard) but simply because the amount of money at the end of the cycle is less than that at the beginning.

No, when you purchased the shares you exchanged your $100 for someone’s shares. When you sold the shares you exchanged your shares for someone’s $120. At no point in time have you exchanged less money ($100) for more money ($120). And at no point in time a moron existed who had exchanged his $120 for your $100.

OK, let’s assume that there are two people. Person A starts out with $100. Person B starts out with 100 shares and $20. Person A exchanges $100 for Person B’s 100 shares. Later, Person A exchanges those same 100 shares with Person B for his $120. Thus, within this time frame, Person A has given person B $100 dollars and 100 shares. Person B has given Person A 100 shares and $120. The 100 shares cancel each other out and, similarly $100 dollars cancel out on each side. Thus, there is a $20 surplus within this exchange for Person A. It doesn’t matter whether it happens at the same exact time (no exchanges happen at the exact same second anyway) but that it happens within a certain timeframe. What is the balance of each side at the end vs. the beginning, is the question we are asking here.

No. Someone taking out a loan gives out a current promise (i.e. establishes a future liability) in exchange for the loan amount in cash. When he repays the loan gives out the promised loan repayment amount in cash in exchange for being releived from any further liability. At no point in time has anyone exchanged more money for less money, or vice versa. The fact that so many “morons” exist that find it profitable (including after the fact!) to take out loans should at least make you stop and think, a little bit.

So I go to a currency exchange to exchange $10 for 10 euros. The guy asks me for the $10, and I say, “do you promise to give me the euros afterward?” The guy says yes and hands me the euros 10 seconds after I give him my dollars. Are you saying that this does not count as an exchange but merely as a fulfilled promise?

(I think there is a difference between an on spot exchange and a loan over an extended period. But it’s not the amount of time that matters but the fact that the person uses that money productively between receiving the money and paying it back.)

And I don’t think people who take out loans are morons (that was your term). They do it out of social necessity.

Again, why must a wage worker be able to buy the product of his labor? Is the universe going to collapse onto itself if this is not the case?

No, just the economy.

There’s no money or anything else – apart from bananas – that anyone needs or desires. C grows and picks three bananas a month. He pays a wage of two bananas to A to procure and manage a masseuse for him. A pays a wage of one banana to B to give C a massage. They all are quite happy munching on one banana a month each. How is this economy bound for a collapse because there’s no one to give B a massage?

OK, let me transfer this into more conventional economic terms. A class of “consumers” creates X amount of money every month (say, by mining 3 tons of gold). The consumers pay an “employer” class 2 tons of gold each month in order to get massages from the “employee” class. The employers then gives the employees 1 ton of gold. Each class then “consumes” their gold and then new gold is created to serve as future means of payment. In that case, I agree that your scenario would not be prone to crash–it actually sounds pretty similar to the socialist system that Parecon supporters advocate. I was assuming a fixed money supply and reusable money in my scenario.

102

Broadly, and simplistically speaking, the total sale value of all merchandise up for sale in a given period cannot exceed the total money available for purchases in that period.

There’s no way individual capitalists–who set the prices of individual commodities–could possibly know how much money is available for purchase in a given period nor what percentage of the total supply their products make up. I’ve begun to discuss price theory in another thread, but haven’t had time yet to answer the replies there.

Now, at this point you’ll likely, and very correctly, point out that this might result in entrepreneurs having to sell their inventory at a loss but this by no means requires that they continue to produce at that loss. This is why the entrepreneur’s assessment of market conditions and the entrepreneur’s place as an actor within a market economy makes him/her a cornerstone of Austrian theory.

It sounds like you actually understand my position fairly well. That is what I was going to say. If I understand Marx right (and I haven’t yet gotten to Vol. 3 where he deals with this explicitly), his position is that as the economy moves towards overproduction, the rate of profit declines. The decline in the rate of profit is in line with what you are saying–capitalists need to take a loss in order to clear their inventory.

This is the essence of what a guy like Schumpeter would call “creative destruction”; if an entrepreneur can’t make a widget profitably investors will find somewhere else to earn a yield on their capital and other entrepreneurs benefit from capital/inventory liquidations by being able to acquire them cheaper than they otherwise could. Businesses fold and capital will move to and be redeployed where it makes the most profit because, in a dynamic economy with flexible prices, there is always an opportunity to collect the difference between inputs and outputs (profit) so long as there are consumer demands that remain unsatisfied.

Interestingly, Schumpeter took the concept of “creative destruction” from Marx (I haven’t read Schumpeter myself, but he sounds like he’s worth exploring). I certainly agree that capitalists buy the assets of other capitalists at a low rate during crises. But in order to make a profit off of these purchases, they then have to sell them themselves at a higher rate–planting the seeds for a new crises. And again, this demonstrates the markets tendency towards centralization. Unsuccessful capitalists who sell their unprofitable assets to other companies are forced into the workforce–perhaps to the same companies that bought them out. The unsuccessful among those companies fold in turn. Capital becomes concentrated in fewer and fewer hands.

Also note that, barring the monetary shennanigans of our central banks and various price-fixing schemes like minimum wages, it is impossible for there to be no opportunities to invest capital for a return because the price of inputs (commodities, other widgets, labour, etc.) is determined by the ability of entrepreneurs to bid them towards productive applications. In other words we’ve come full circle, back to price flexibility, because the prices of the factors of production can only be as high as the maximum bidding entrepreneurs are willing or able to pay.

But the fact that there are profitable opportunities is precisely the problem. The larger the profits, the less of their product workers can buy back; the bigger the profits of one firm, the greater the losses of another. And it’s not so much the price of the factors of production that are too high, but the products of production (i.e. consumer goods).

Another thing, businesses do not absolutely have to lower their profits when their products aren’t selling. During a slump, either businesses don’t sell their products or they sell them at a loss. But it’s a prisoner’s dilemma. If half of the businesses hold out and don’t sell anything and the other half sells their products at a loss, then a net amount of money would be flowing from the capitalist class to the working class. This new money would allow the workers to buy the unsold goods at a profitable price. Thus, the first half of businesses have regained profitability due to the sacrifice of the second group. Each business then has an incentive refrain from lowering its prices in hopes that someone else will lower their prices and serve as the fall guy.

I’m only a hobby economist myself but If you’re looking to learn some Austrian economics I recommend Human Action by Ludwig von Mises. It’s quite the tome but ol’ Ludwig is an easy read compared to Marx and you don’t seem to have any trouble with him. Also for a specfic treatment of the underconsumption/overproduction theory of crises I’d check out the chapter the Paradox of Saving in Hayek’s Prices and Production (pg 131). Both books are available for free in the Literature section.

I’ve been planning on getting to Human Action eventually. Thanks for the heads up on the Hayek piece. I’ll look into that as well.

I appreciate your response. It’s probably the most polite and intelligent one I’ve gotten so far.

103

If they want to pay me for risk, they can find me at the slots

“Paying for risk” was meant to be a shorthand for “paying for taking risk OFF them”, not “paying for taking risk ON you”.

I imagine you pay your insurance company so that you have less risks, not that so they have more risks. Gambling is extremely unlike insurance (or speculation) - it creates risks that didn’t exist before, while insurance and speculation try to move risks around to parties that are more capable dealing with them from other parties.

104

yes, there is, and its called “sales.” they gain this information through participation in markets.

105

Right, so where was I?

Okay, let’s recap the initial exchange between you and Nirgraham. First Nirgraham wrote:

Then you responded with:

And Nirgraham followed that with:

So I think the crux of your dispute with Nirgraham is that you consider the goods retained by the capitalists to be “excess production”, whereas Nirgraham doesn’t. Obviously, if the capitalists keep them (i.e. choose not to sell them), then it follows that they aren’t excess. Maybe from the workers’ point of view they’re excess, because the workers don’t want them, but so what? There are more people in the economy than just the workers.

Nirgraham certainly did refute your initial scenario. Nowhere in your initial scenario did you stipulate anything about whether any/all of the capitalists reinvested any/all of his/their profits back into his/their business(es). You then departed from your initial scenario and subsequently claimed that Nirgraham had presented no refutation against you whatsoever. That’s called “intellectual dishonesty” in my book.

The fact that your initial scenario dealt with “the aggregate” meant that differences between wages and commodity prices could be ignored, as we’re now dealing with “the economy” as a whole. When you brought up the possibility of capitalists reinvesting their profits back into their businesses, that required you to shatter the purely aggregate character of your initial example.

Asserting that isn’t going to convince me, so what’s your point? Is this just a way for you to keep feeling good about yourself in this context? Or what?

By whose definition? It sounds like Marx’s. Just saying. But that doesn’t obligate the rest of us to follow that (his) definition, now does it? I don’t think so.

Also, I suggest you keep in mind that Austrian-school economics doesn’t follow the Marxian notion of “surplus value”. By invoking that notion, you’re just going to talk past Austrian-school economists.

No, it didn’t. It showed that the unsold goods were not necessarily a problem, because “unsold” is not the same thing as “unwanted” or “unpossessed”.

106

It’s abundantly clear to me, at this point, that the character of your analysis is entirely Marxian. That’s not a criticism, just an observation. For example, when you say “that’s not the type of value I’m talking about”, the implication to me is that you’re contrasting between Marxian “use-value” and “exchange-value”. Going with this implication, your question can be rephrased thusly:

There is no objective answer to that question, because exchange-value doesn’t inhere in things any more than use-value does. Furthermore, exchange-values (prices) are expressions of use-values. If you price a hamburger at $5, that means you prefer having the $5 to having the hamburger in the future. The only difference between exchange-value and use-value is that the former depends on the existence of a money. One could say then that exchange-value expresses a relation between the use-value of money and the use-value of another good or service.

107

Here’s what you wrote earlier: “Because that isn’t a wage. That’s simply a payment for a service.” It strains belief to me that you’d expect any one to infer from that that all wages are payments for services, but not all payments for services are wages. It certainly sounds to me like you were claiming that wages aren’t payments for services.

In parsing these examples, I notice the following distinctions: who owns the apple trees and who sells the apples. Furthermore, the apple trees are obviously “means of production”. However, only one of the distinctions makes a difference as to whether B receives a wage or simply a payment for a service: namely, who owns the apple trees. So we arrive at the following conclusion: if one is paid to employ means of production that are not commonly owned, his payment is a wage; if one is paid to employ means of production that are commonly owned, his payment is not a wage.

One question I have about this is what exactly you mean by “commonly owned”. I know this is going outside the scope of your original scenario above, but I’d like to add two more people, D and E, to the scenario. If the apple trees are owned by A, B, and C in common, and they pay D to pick apples, which then D either sells to E or gives back to A, B, and C to sell to E, would you say that D’s payment constitutes a wage? I’m predicting your answer will be yes, because this kind of common ownership is still a form of private (i.e. exclusive) ownership. The logical conclusion, then, is that by “commonly owned” you mean “owned by everyone”.

As you indicate later, this terminology comes from Marx. Presumably by “productive” he meant vis-a-vis “surplus value”. However, you don’t seem to understand what Austrian-school economics means by “profit” in the broad sense. In Marxian terminology, I think the Austrian-school economics notion of “profit” could be defined as “obtaining greater use-values”. Does that make sense to you?

108

Andris Birkmanis: “Paying for risk” was meant to be a shorthand for “paying for taking risk OFF them”, not “paying for taking risk ON you”.

I imagine you pay your insurance company so that you have less risks, not that so they have more risks. Gambling is extremely unlike insurance (or speculation) - it creates risks that didn’t exist before, while insurance and speculation try to move risks around to parties that are more capable dealing with them from other parties.

And yet the people who pay to have this risk taken off of them seem to be the ones who lose the most in the deal.

109

Malachi: yes, there is, and its called “sales.” they gain this information through participation in markets.

But before the money that is available for purchases is spent, there’s no sales. Once the purchases are made, the money is no longer available for purchases. The sales don’t occur until after the prices are set.

110

Prices are a continual feedback loop. The amount of sales a company is getting informs their price-setting decision.

111

Autolykos: So I think the crux of your dispute with Nirgraham is that you consider the goods retained by the capitalists to be “excess production”, whereas Nirgraham doesn’t. Obviously, if the capitalists keep them (i.e. choose not to sell them), then it follows that they aren’t excess. Maybe from the workers’ point of view they’re excess, because the workers don’t want them, but so what? There are more people in the economy than just the workers.

Before he posted the table “refuting” my position, and in the same post in which I asked him to demonstrate his claim, I said the following:

Every time a commodity is bought, the money returns to a capitalist, who must decide whether to reinvest the money or spend it on commodities. If he keeps deciding to reinvest it, then there must be an increasing number of unsold commodities (discounting other factors such as expanding credit).

As the post you quoted also indicated, I was assuming that reinvestment only included wages and not productive goods. I have since acknowledged that including productive goods is important to make the scenario realistic.

Asserting that isn’t going to convince me, so what’s your point? Is this just a way for you to keep feeling good about yourself in this context? Or what?

I am currently devising a way to model this, which I think will prove the Marxian position definitively. I am going to make the following claim: with a single currency, a fixed money supply, a consumer goods sector, a productive goods sector, the price of outputs exceeding inputs, and all goods being sold, the average rate of profit will fall. Do you disagree with my prediction?

By whose definition? It sounds like Marx’s. Just saying. But that doesn’t obligate the rest of us to follow that (his) definition, now does it? I don’t think so.

Also, I suggest you keep in mind that Austrian-school economics doesn’t follow the Marxian notion of “surplus value”. By invoking that notion, you’re just going to talk past Austrian-school economists.

OK, do you have a term that describes an economy where goods are produced by wage labor, where the amount of money charged above the cost to produce the commodity is reinvested, and where the investor can increase his money in this way (I think this covers the essentials of what Marx presupposes)? Do you think a free market would operate in this way? Do you think a free market could operate in this way?

I probably don’t need to use the term surplus value anymore. I’m using what I call “price markup,” which I think might be the same thing as surplus value, but is not the same as profit.

No, it didn’t. It showed that the unsold goods were not necessarily a problem, because “unsold” is not the same thing as “unwanted” or “unpossessed”.

No, they’re not necessarily a problem if their producers want to consume them. If this means that Nirgraham has somehow “won,” I could care less. I’m not trying to score points, but rather seeking to come to an understanding of how the economy works. The reality is that capitalists don’t choose to consume their profits. If we are to critique each other’s positions, it should be with the goal of bringing them closer to reality.

112

There is no objective answer to that question, because exchange-value doesn’t inhere in things any more than use-value does. Furthermore, exchange-values (prices) are expressions of use-values. If you price a hamburger at $5, that means you prefer having the $5 to having the hamburger in the future. The only difference between exchange-value and use-value is that the former depends on the existence of a money. One could say then that exchange-value expresses a relation between the use-value of money and the use-value of another good or service.

Actually, Marx’s two categories are use-value and value. If I understand it right, exchange-value is the value of one commodity expressed in the form of the use-value of another. If a rock balances on a scale with five bars of lead, the rock’s weight is expressed as five bars of lead, but these bars of lead aren’t responsible for the fact that the rock has weight. So exchange-values are not the expressions of use-values, but the expressions of values.

However, I’ve actually been trying to avoid using the term “value.” Malachi’s reply was simply a red herring.

Me: A capitalist doesn’t simply exchange one thing for a completely different thing. Ultimately, a capitalist exchanges a thing for a greater quantity of that same thing (i.e. money).

Malachi: all voluntary exchange consists of parties exchanging lesser values for greater values.

113

Here’s what you wrote earlier: “Because that isn’t a wage. That’s simply a payment for a service.” It strains belief to me that you’d expect any one to infer from that that all wages are payments for services, but not all payments for services are wages. It certainly sounds to me like you were claiming that wages aren’t payments for services.

Come to think of it, Marx probably wouldn’t call wages payments for services. Rather a wage is a purchase of labor power which the capitalist then sets to use. I don’t care which terms we use, but it is important to have a way to differentiate between these two different concepts.

One question I have about this is what exactly you mean by “commonly owned”. I know this is going outside the scope of your original scenario above, but I’d like to add two more people, D and E, to the scenario. If the apple trees are owned by A, B, and C in common, and they pay D to pick apples, which then D either sells to E or gives back to A, B, and C to sell to E, would you say that D’s payment constitutes a wage? I’m predicting your answer will be yes, because this kind of common ownership is still a form of private (i.e. exclusive) ownership. The logical conclusion, then, is that by “commonly owned” you mean “owned by everyone”.

Yes, I believe you are right. Though maybe it would be better to say unowned rather than commonly owned? What I basically mean is that each person could pick apples from the trees without the threat of violence deterring them.

As you indicate later, this terminology comes from Marx. Presumably by “productive” he meant vis-a-vis “surplus value”. However, you don’t seem to understand what Austrian-school economics means by “profit” in the broad sense. In Marxian terminology, I think the Austrian-school economics notion of “profit” could be defined as “obtaining greater use-values”. Does that make sense to you?

Austrians don’t seem to understand what businesses mean by profits then. Do Austrians have a separate word for profits in the business sense? Why do they choose to equivocate, you think? Is this just an example of newspeak, where you change the meanings of words so your opponents can’t articulate their objections?

114

Prices are a continual feedback loop. The amount of sales a company is getting informs their price-setting decision.

So the sales of a commodity today tells me how much money will be spent on it tomorrow? Interesting.

115

Then you’re implicitly conceding that Nirgraham did, in fact, refute your original example (which was my point). Why not concede it explicitly?

If you’re implicitly assuming real humans are involved, and not some model of such, then yes, I disagree with it, because I don’t think it necessarily holds true.

Logically speaking, “an economy where goods are produced by wage labor” means to me the same thing as “an economy where all goods are necessarily produced by wage labor”, i.e. there are no goods which are not produced by wage labor in this economy. The same applies to the other conditions you ascribe to that economy. Do you agree with this or not? In any case, no, I don’t have a single word or simple phrase that describes such an economy.

As I think Nirgraham and others have pointed out, investors don’t increase their money on a permanent basis. When they profit monetarily from their investments, they don’t necessarily (and typically don’t) remove that money from the economy for the rest of time. Maybe you already understand this, but I just want to point it out in case you don’t.

I consider it unrealistic for all goods to be necessarily produced by wage labor in a free market. However, I won’t say it’s impossible, because I don’t know - but neither does anyone else.

My understanding of “surplus value” at this point is that it denotes the average socially necessary labor time embodied in a commodity above and beyond that which is required to sustain the worker(s) who produced it. Is that also your understanding of it?

Capitalists never consume any of their profits? Really?

116

You’re correct. Marx titles Chapter 1, Section 1 of Capital Vol. I “The Two Factors of a Commodity: Use-Value and Value”. However, your understanding of exchange-value seems to contradict itself. If exchange-value is the value of one commodity expressed in the form of the use-value of another, then it’s contradictory to say that exchange-values are not the expressions of use-values. Marx himself states in Chapter 1, Section 1 of Capital Vol. I that exchange-values are independent of use-values:

Using Marx’s terminology, the Austrian school of economics considers exchange-values to be expressions of use-values. Obviously this is in opposition to Marx. Where Marx would say that commodity exchange is “evidently” abstracted from commodities’ use-values, Austrian-school economists would completely disagree. Furthermore, the Austrian school in no way holds to Marx’s concept of “value”, i.e. “the average amount of socially necessary labor time required to produce a commodity”.

It’s only a red herring if it’s intentional. I don’t think Malachi understood that you were referring to a different notion of “value” from his own.

117

In that case, when the apple trees are commonly owned, how is A not purchasing B’s labor power when hiring B to pick apples? Essentially I’m asking what you (and/or Marx) think the difference is between services and labor power.

Right, the idea is that everyone has legitimate control over the apple trees. Although presumably this control would be restrained by common agreement. For example, all or most of the people would agree to not cut down the apple trees and/or to only use them for picking apples.

Austrian-school economists certainly do understand what businesses mean by profits, and they routinely distinguish between “psychic profit” and “monetary/business/accounting profit”. See here for a definitive Austrian-school statement on the matter.

118

Then you’re implicitly conceding that Nirgraham did, in fact, refute your original example (which was my point). Why not concede it explicitly?

Sure. But when I gave my original example, I mistakenly assumed that others were assuming that capitalists would behave in the same way in a “free” market regarding investment vs. consumption. I’ve now clarified my assumptions. So it is up to you guys to say whether we have reached an agreement or not. I do agree that Nirgraham’s example is logically valid.

Logically speaking, “an economy where goods are produced by wage labor” means to me the same thing as “an economy where all goods are necessarily produced by wage labor”, i.e. there are no goods which are not produced by wage labor in this economy. The same applies to the other conditions you ascribe to that economy. Do you agree with this or not? In any case, no, I don’t have a single word or simple phrase that describes such an economy.

I wouldn’t want to define an economic system in a way that makes it impossible. Would you define an anarcho-capitalists society as a society where no coercion or property rights violations ever happen? In any case, I could say that to the degree that capitalism is prevalent, the problems I’ve highlighted will occur.

As I think Nirgraham and others have pointed out, investors don’t increase their money on a permanent basis. When they profit monetarily from their investments, they don’t necessarily (and typically don’t) remove that money from the economy for the rest of time. Maybe you already understand this, but I just want to point it out in case you don’t.

I do. My prediction is that the economy will move towards overproduction/falling-rate-of-profit/inflation/increasing-debt/imperialism faster as the percentage of profits are reinvested vs. consumed.

I consider it unrealistic for all goods to be necessarily produced by wage labor in a free market. However, I won’t say it’s impossible, because I don’t know - but neither does anyone else.

Do you think a “free” market would have roughly the same amount of wage labor as present? Do you think it would have a business cycle if it had the same or more?

My understanding of “surplus value” at this point is that it denotes the average socially necessary labor time embodied in a commodity above and beyond that which is required to sustain the worker(s) who produced it. Is that also your understanding of it?

Yes. I’m not sure my “price markup” category is the same as that though.

Capitalists never consume any of their profits? Really?

They do. My assertion is that the problem I’ve highlighted would still be an issue if they reinvested any of it–it would simply happen at a slower rate.

119

You’re correct. Marx titles Chapter 1, Section 1 of Capital Vol. I “The Two Factors of a Commodity: Use-Value and Value”. However, your understanding of exchange-value seems to contradict itself. If exchange-value is the value of one commodity expressed in the form of the use-value of another, then it’s contradictory to say that exchange-values are not the expressions of use-values. Marx himself states in Chapter 1, Section 1 of Capital Vol. I that exchange-values are independent of use-values:

In exchange-value, the value is expressed in the form of use-values. Use-values, therefore, are the expressions, not what is expressed.

In that case, when the apple trees are commonly owned, how is A not purchasing B’s labor power when hiring B to pick apples? Essentially I’m asking what you (and/or Marx) think the difference is between services and labor power.

B would be paid according to how much socially necessary labor time was required to pick the apples as opposed to the socially necessary labor time required to reproduce B’s labor power.

120

I just found this video that makes a similar critique of the Austrian definition of profit that I made here. It’s also a good intro to Marx’s concept of value.