From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Thu Mar 15 2007 - 13:38:11 EDT
--- Pen-L Fred Moseley <fmoseley@MTHOLYOKE.EDU> wrote:
Ajit:
> > For a very simple reason. You say, you take "money
> > constant and variable capital as given". So let's
> see
> > what could this mean. Say a capitalist begins with
> an
> > amount of money equal to 50 pounds of silver. What
> > does he do with this 50 pounds of silver? You say
> he
> > buys constant capital and variable capital with
> it.
> > Let us say this capitalist is engaged in
> production of
> > a commodity X. To produce this commodity X, the
> > capitalist needs to buy commodity Y and Z as
> constant
> > capital and Labor-power L. If the technology
> available
> > for the production of X is not the usual
> neoclassical
> > one but the Leontieff type, then these Y, Z, and L
> > must be bought in a given proportion. So let us
> > suppose that to produce 1 unit of X, it takes 2
> units
> > of Y and 3 units of Z with 1 unit of L. Let us
> suppose
> > that the price of Y is 4 pounds of silver, the
> price
> > of Z is 5 pounds of silver, and the wage per unit
> of L
> > is 6 pounds of silver. Thus the capitalist will
> spend
> > 29 pounds of silver to be able to buy enough
> constant
> > and variable capital to produce 1 unit of X. If
> there
> > is no chance of divisibility of commodites below 1
> > unit, then this capitalist is simply unable to
> > productively invest the rest of his 21 pounds of
> > silver. Even if you assume perfect divisibility,
> the
> > capitalist in no way will be able to invest his
> full
> > 50 pounds for constant and variable capital. So
> what
> > would it mean to say that the capitalist begins
> with a
> > capital in terms of money? This was only to
> highlight
> > the flimsyness of such statements that capitalist
> > start with a GIVEN money. Acually what you have to
> do
> > is to start with an input output structure with
> KNOWN
> > prices and wages, and then calculate your total
> amount
> > of money investment, which you then call given
> money
> > investment. Any way, this is not my main
> criticism.
> > Let's suppose you are lucky, prices of Y, Z and L
> > happens to be such that your capitalist could
> invest
> > your so-called given 50 pounds of silver
> completely.
> > So, how much is the constant capital investment?
> You
> > say we add the amount of Y and Z bought by the
> > capitalist multiplied by their respective prices.
> So
> > you cannot get a money measure of contant capital
> > without knowing the prices of the elements of the
> > constant capital.
___________________
Fred:
Yes, you can. You can “get a money measure of
constant capital”
(and
also variable capital) from EMPIRICAL OBSERVATIONS (as
long-period
averages). Capitalists invest a certain quantity of
money capital (M)
in the sphere of circulation, prior to the production
of output, to
purcase means of production and labor-power. This
empirical quantity
of money capital ALREADY EXISTS, prior to production,
and therefore CAN
BE TAKEN AS GIVEN AS SUCH in the determination of the
total price of
the output and the total surplus-value (which is the
main goal of the
theory), as explained below:
_______________________
Ajit:
Fred, I gave you an example. The capitalist has 50
pounds of silver, which empirically already exists,
with which he goes to buy constant capital and
variable capital in the sphere of circulation. The
prices of y and z and the wages of labor-power already
exists also. Who is denying that they don't exist. Now
you tell me how is this capitalist investing this
empirically existing money capital of 50 pounds of
silver. That is the question. If capital letters could
substitute for arguments then life would be much
easier.
____________________________
Fred:
1. The given empirical M is divided into C + V. C is
the money
capital advanced to purchase means of production, and
V is the money
capital advanced to purchase labor-power.
______________________
Ajit:
So why not just take my example and show me how is it
done.
__________________
Fred:
2. The given empirical C becomes one component of the
total price of
the output (i.e. C is “transferred” to the price of
the output).
____________________
Ajit:
So, how much is C in the example I gave above?
__________________
Fred:
The other component of the total price is the new
value produced by current
labor (see #3 below), so that:
P = C + N
The given empirical C becomes the first component of
the price of the
output, no matter what determines the magnitude of C.
It is not
necessary to know the determination C in order for C
to be the first
component of P.
___________________
Ajit:
But as I have shown above, you will not know C unless
you know P. You may differentiate P of inputs from P
of outputs and claim that P of inputs are known. If
you are doing that, then clarify your position. Your
statement "no matter what determines the magnitude of
C" sounds weird. What else could determine the
magnitude of C, except the quantity of the components
of C multiplied by their respective prices?
__________________________
Fred:
The first component of the total P is the actual
empirical C (as indeed it is in reality), whatever the
magnitude of C.
_____________________
Ajit:
Since I'm getting tired of your "empirical C", I must
ask you once again, what do you mean by "empirical C"?
When I walk around Paris I don't ever come across the
empirical C. So actually, it is somekind of data you
must be getting from somewhere. Where are you getting
this data from?
____________________
Fred:
The first component of the total P is not a
hypothetical quantity
(equal to the labor-values of the means of production,
as in the
standard interpretation), because then the total P
determined would be
a hypothetical total P, not the actual total P, which
the theory is
intended to explain.
3. N is determined by the product of SNLT (L) and the
MELT (m), both
of which are also taken as given:
N = m L
______________________
Ajit:
Who gave you m? I take that L is data. However, you
should keep in mind that your SNLT (L) is not
"empirically given". You will need to do a lot of
maniulations of the labor employment data and make a
lot of assumptions to arrive at your SNLT. But I let
this SNLT pass for now.
____________________________
Fred:
4. The given empirical V is subtracted from N in
order to determine
the total surplus-value produced:
S = N - V
= m L - m Ln where Ln = V / m
= m (L - Ln) = m Ls
The given empirical V is subtracted from N to
determine S, no matter
what determines the magnitude of V. It is not
necessary to know the
determination V in order to subtract the empirical V
from N and
determine S. The V that is subtracted from N to
determine S is the
actual empirical V (as indeed it is in reality),
whatever the magnitude
of V. V is not a hypothetical quantity (equal to the
labor-values of
the means of subsistence, as in the standard
interpretation), because
then the total S determined would be a hypothetical
total S, not the
actual total S, which the theory is intended to
explain.
Ajit, What is invalid about this logical procedure?
Surely it is
logically OK to begin a theory with these empirical
observations of M
= C + V, and use these empirical givens to determine
N and S, as
explained above.
____________________________
Ajit:
There is nothing right about it. Frankly, I find it
very childish. First fo all, you never explained how
your empirical C is given (or for that matter your
empirical M is given), except just write it in capital
letters and say its given no matter how you determine
it. Then you introduce a new animal called m, and
simply assert that m is given. And still you claim
that there is no problem with it? I don't know how?
________________________
Fred: ...
Ajit:
> Why do you
> think Foley and Dumenil only took variable capital
> given in terms of money and not the constant
capital?
> Because they knew that it would be fatal to their
> whole argument. Cheers, ajit sinha
Fred:
Are you suggesting that it is OK to take money
variable capital as
given, but not OK to take money constant capital as
given? Why should
there be a difference between C and V in this regard?
________________________
Simple. Labor-power is one commodity, which has one
price. Constant capital is made of millions of
commodities, there is no one price of a commodity
called "constant capital". Cheers, ajit sinha
____________________________________________________________________________________
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