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>Let's take Marx's example of cotton and yarn. The constant capital
>invested in the cotton is initially taken as given as the actual,
>historical price of the cotton. If the price of the cotton does not change
>before the yarn produced from it is sold, then this actual historical cost
>is taken as given in the determination of the price of the yarn. However,
>if the price of the cotton does change any time between the purchase of the
>cotton and the sale of the yarn, then the NEW, CURRENT PRICE OF THE COTTON
>IS TAKEN AS GIVEN in the determination of the price of the yarn. This is
>true whether the change in the price of the cotton occurs in any one of the
>three phases of the circulation of capital:
Ok, Fred, then what is the rate of profit based on for our poor backward
capitalist? Is the denominator the price which the production of the
commodity is really costing our capitalist or the cost price as it would be
for a new enterprise which is not burdened by a continuing stock of non
used up constant capital?
>"These changes in their [the means of production] value, however, always
>arise from changes in the productivity of the labor of which they are
>products, and have nothing to do with the labor process into which they
>enter as finished products with a GIVEN value. Their change of value stems
>from alterations in their own conditions of production, which occur outside
>and independently of the labor process into which they enter as material
>and means; not as a result of an operation occuring within the labor
>proces. For they are always values of a GIVEN, PREPOSITED, magnitude, even
>thought owing to external agencies, acting outside the labor process, they
>are now PREPOSITED as a GREATER OR SMALLER MAGNITUDE than was originally
>the case." (MECW. 30: 80)
>
>"It is true that the value of this constant part can fall or rise,
>depending on whether the commodities of which it is composed have to be
>reproduced at less or greater cost. This CHANGE OF VALUE, however, NEVER
>ALTERS THE FACT that in the process of production into which it enters as a
>condition of production, it is a POSTULATED value which must reappear in
>the value of the product." (MECW. 30: 413)
Fred, these passages all support my interpretation that for Marx constant
capital is the value of the means of production used up in a commodity, not
the price paid for them at historic or current prices.
All the best, Rakesh
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