This is a continuation of my last post (#4784) on Rakesh's textual evidence to support his interpretation (which is really the standard interpretation) that the COST PRICE IS DIFFERENT in the determination of the values and the prices of production of commodities. Rakesh's second passage on pp. 308-09 of Vol. 3 is at the beginning of Section 2 Chapter 12 of Volume 3, which is a "supplementary remark" about "the production price of commodities of average composition". This section is the fourth time in as many chapters that Marx discussed this subject of the price of production of average commodities (Ch. 9, pp. 263-64; Ch. 10, p. 273-74, and Ch. 11, pp. 303-05). The main points of these earlier discussions are : (1) that the price of production of these average commodities is equal to their values; and (2) that the price of production of these average commodities is not affected by a change of wages. It is important to emphasize that these conclusions follow IF AND ONLY IF THE COST PRICE IS THE SAME for the determination of both the value and the price of production of these commodities. In these discussions, as we saw in my last post, Marx made this assumption of THE SAME COST PRICE in clear and explicit algebraic terms: Value = K + s Price = K + p' (where p' stands for average profit) Since in the case of average commodities, p' = s, it follows that value = price of production. Within this context, it is surprising that when Marx returns to this subject of average commodities in Section 2 of Chapter 12, his opening sentence appears to contradict these conclusions stated in earlier chapters. This sentence is the second passage that Rakesh has emphasized: "We have already seen that the DIVERGENCE OF PRICE OF PRODUCTION FROM VALUE ARISES FOR TWO REASONS: (1) because the average profit is added to the cost price of a commodity, rather than the surplus-value contained in it; and (2) because the price of production of a commodity that diverges in this way from its value enters as an element into the cost price of other commodities, which means that a divergence from the value of the means of production consumed may already be contained in the cost price, quite apart from the divergence that may arise for the commodity itself from the difference between average profit and surplus-value." (emphasis added) If there are indeed two reasons for prices of production to diverge from values (different cost prices as well as p' not = s), then this would apply to average commodities as well, from which it follows that their price of production would not be equal to their value, even though p' = s. However, Marx then goes on in the rest of this section to repeat the same two points made in the earlier discussions of average commodities. He emphasizes that, even though the cost price of average commodities is not equal to the value of the inputs "this possibility does not affect the correctness of the principles put forward for commodities of average composition." "The principles put forward" are the two conclusions stated above: that the price of production of average commodities is equal to their value and is not affected by a change of wages. Again, these conclusions follow IF AND ONLY IF THE COST PRICE IS THE SAME in the determination of both the value and the price of production of these commodities, which implies that there is ONLY ONE REASON FOR PRICES OF PRODUCTION TO DIVERGE FROM THEIR VALUES (p' not = s). Again, Marx made this clear in algebraic formulation, in which the same K is a component of both the value and the price of production of these commodities. Marx's words: "It is quite possible, accordingly, for the cost price to diverge from the value of the elements of which this component of the price of production is composed, even in the case of commodities that are produced by capitals of average composition..." "Yet this possibility in no way affects the correctness of the principles put forward for commodities of average composition. The quantity of profit that falls to the share of these commodities is equal to the quantity of surplus-value contained in them. For the above capital, with its composition of 80c + 20v, for example, THE IMPORTANT THING AS FAR AS THE DETERMINATION OF SURPLUS-VALUE IS CONCERNED IS NOT WHETHER THESE FIGURES ARE THE EXPRESSION OF ACTUAL VALUES, BUT RATHER WHAT THEIR MUTUAL RELATIONSHIP IS; i.e. that v is one-fifth of the total capital and c is four-fifths. As soon as this is the case, as assumed above, the surplus-value v produced is equal to the average profit. On the other hand, because it [the surplus-value; FM] is equal to the average profit, THE PRICES OF PRODUCTION = COST PRICE + PROFIT = K + P = K + S, which is equal in practice to the commodity's VALUE. In other words, an increase of decrease of wages in this case leaves K + P unaffected, just as it would leave the commodity's value unaffected, and simply brings about a corresponding converse movement, a decrease or increase, on the side of the profit rate." (C.III: 309; emphasis added) In other words, the important thing in the determination of value and surplus-value is the actual magnitudes of C and V (which are taken as given), not whether or not C and V are equal to the values of the MP and MS. Therefore, we seem to have at least the following options in interpreting this section: 1. (The standard interpretation): Marx is confused and contradicts himself. The conclusions he reaches about the price of production of average commodities are contradicted by the opening sentence. The whole point of Marx's discussion is nonsense. 2. (My interpretation): Marx misspoke in the opening sentence of the section. What he really should have said is that there are two reasons why the price of production of commodities IS NOT PROPORTIONAL TO THE LABOR-TIME required to produce them. In this opening sentence, I think that Marx momentarily slipped back into using "value" in the provisional Volume 1 sense of proportional to labor-time. However, Marx had already made it clear in Chapter 9, as we saw in my last post, that, even though the cost price may not be equal to the value of the inputs, the value of commodities is still = K + s, which implies that the value of commodities may not be proportional to the total labor-time required to produce them (although the new value component is still proportional to current labor-time). And in the remainder of this section of Chapter 12, Marx again used value in this more developed sense (= K + s, even though K not = value of the inputs), in which case total value is not proportional to total labor-time. Or Marx should have started with his second paragraph: "It is quite possible, accordingly, for the cost price to diverge from the value of the elements of which this component of the price of production is composed, even in the case of commodities that are produced by capitals of average composition... Yet this possibility in no way affects the correctness of the principles put forward for commodities of average composition... I think this is the real point Marx is trying to make in this section: Even though the cost price is not = to the value of the inputs, this does not affect the correctness of the principles put forward for average commodities. And the correctness of these principles requires that the COST PRICE IS THE SAME for the determination of both the value and the price of production of commodities, which implies that there is only ONE REASON FOR THE DIVERGENCE between prices of production and values. Marx's terminological slip in the first sentence should not distract from the correctness of these principles. 3. (Rakesh's interpretation?): Or perhaps Rakesh has another interpretation of the conclusions drawn in the rest of this section and in the prior discussions of average commodities (price of production = value and not affected by a change of wages) that is consistent with his interpretation of the first sentence. If so, please explain. I look forward to further discussion. Comradely, Fred
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