Readers Guide Queries

Don Franks in the first part of his "Readers Guide to Salient" (Salient, June 27 1973) invited criticism of his treatment of the subject in that article. I am taking up his offer by submitting the following points.

Franks states: "These commodities are sold for a profit, of which the workers receive a part as wages." (10th paragraph) It is not clear to me what Franks' definition of profit is. If he means by the word profit what 'capitalist economists' mean by it then he is using it wrongly. To 'capitalist economists' profits are not distributed to workers but to entrepreneurs and suppliers of capital cither in the form of normal profit for their services (which no doubt Mr Franks would deny they give) or in the form of excess profits for the monopolistic element of their market position.

Possibly Franks is using Marx's definition of profit, but according to Marx, "the surplus value or that part of the total value of the commodity in which the surplus labour or unpaid labour of the working man is realised I call profit." (K.Marx and F.Engels, "Selected Works"

Vol 1. London, Lawrence and Wishert, 1962, p.431.) Thus to Marx, workers do not receive do not receive profits.

There are two possibilities, either Franks is using some other definition of profit given by Marx which is inconsistent with the one quoted above, or he is using another definition not by Marx. If the former is the case he might be kind and point it out to us and comment on the inconsistency of his mentor. If the latter is the case then, as he wrote himself in the article, "aspiring Marxist writers have only themselves to blame if they alienate themselves from progressive and potentially progressive people by a careless attitude to the meanings of words."(second paragraph) My contention is not that Franks has erred bv not using either the capitalists' or (quoted) Marx's definition of profit but that he has done so by introducing an ambiguous term without defining it in an article which professes to attempt to, "....outline some definitions of important words......"

According to Franks, "The reason the capitalist is able to take the larger share of his firm's profit is simply because he owns the tools necessary for the means of production."

a)	Franks' phrase, "tools necessary for the means of production" completely mystifies; me. Are not tools one element of the means of production as that term is used in Marist writing?
b)	If Franks were to make clear what he means by profit it might be possible to find out whether or not capitalists do take the larger share of it in New Zealand. Without this explanation the statement quoted above is untestable. If Franks is using either the "capitalist economists" definition of profit or the definition of profit by Marx, then all profit goes to capitalists so they certainly get' the larger share and he is correct. However, if this is the case, Franks has tolds us nothing about the division of profits between capitalist and worker which I suspect he was trying to do.
c)	Franks' explanation of why capitalists get (according to him) the larger share of the "profits" is that they own the tools which are necessary in production. But as Franks points out, "..the capitalist is dependent on the worker for the labour required to convert his raw material into saleable commodities." The question that arises is why is the capitalist able to get a larger share because he owns one of the essential ingredients in production while the worker who also owns one of the essentials (labour) is unable to?

Franks states: "The 1968 National Development Conference unintentionally showed up the exploiting character of our society when it suggested that the capital of New Zealand (Le. that of the New Zealand manufacturer) should be increased. It was suggested that production should be increased to 4.5% per annum and wages 2-5% per annum. Who gets the difference? The manufacturers get the difference. Who decides who gets the difference? The manufacturers of course."

I would much appreciate it if Franks would enlighten me on the source of his information that the 1968 NDC suggested that wages should rise by 2.5% per annum. I have searched the "Report of the Proceedings of the National Development Conference, Plenary' Session 27—28 August 1968" which included the "Report of the Targets Committee" without finding any reference to a suggestion that wages should rise by 2.5% per annum. The Targets Committee did suggest a 4.5% per annum rise in (real) GNP and as Franks may know, this and other targets have been revised and reviewed since 1968.

When Franks points out his source to us it would be helpful it he defined the word wages as it is used in that context. If by the word wages is meant "wages rates" then Franks is wrong in inferring that the 1968 NDC was proposing that the difference between the 4.5% per annum growth in output and the 2.5% per annum growth in wages go to manufacturers (or even all non-labour factors). Franks would be correct only if the NDC also proposed no increase in the size of the labour force which it definitely did not. Moreover, if the 2.5% per annum rise in wage rates Franks maintains was suggested was the suggestion of the Targets Committee he was wrong in stating that manufacturers made the decision. Of the thirteen members of that committee only one could ever loosely be described as a manufacturer (Mr A.R. Dellow, Director, NZ Manufacturers' Federation).

Brent Layton