# [OPE-L:2047] Re: Re: determination of constant capital

From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Thu Jan 06 2000 - 13:06:30 EST

Thanks very much to Andrew for his (2012). I continue to think that this
discussion is productive and clarifying. The following attempts to
continue in that vein.

1. I am very happy that Andrew and I both seem to agree that, if there is
a change in the value of e.g. cotton while a given batch of cotton and
yarn are in either Phase 1 (prior to production) or Phase 3 (after
production, but before sale), then the value transferred from the cotton
to the yarn will change correspondingly. This agreement is expressed
symbolically below by the familiar formula for the circulation of capital,
with X's below Phase 1 and Phase 3 to indicate that both Andrew and I
agree that if there is a change in the value of cotton while a given batch
of cotton and yarn are in either of these two phases, then the value
transferred from the cotton to the yarn will change correspondingly.
(I hope the diagram comes through accurately) Andrew, am I right about
this agreement? I think so and I hope so.

M - C ... P ... C' - M'

Phase 1 Phase 2 Phase 3

X ? X

2. The only remaining disagreement seems to be what happens to the value
transferred from the cotton if the value of cotton changes while a given
batch of cotton and yarn are in Phase 2 (i.e. during production)?

I argue that Marx stated in many passages that, if there is a change in
the value of the means of production in ANY ONE OF THESE THREE PHASES of
the circulation of capital, including Phase 2 ("at whatever stage of
completion"; C.III. 207), then the value transferred from the means of
production will change correspondingly (because Marx assumed that the
value transferred is determined by the CURRENT value of the means of
production, including in Phase 2).

Andrew seems to argue that, if there is a change in the value of cotton
while the yarn is in Phase 2, then the value transferred from the cotton
will NOT change while the yarn is in Phase 2, but will instead remain
equal to the value of the cotton when the cotton entered production (i.e.
at the beginning of Phase 2).

I argued in my last post that there is no explicit textual evidence to
support this interpretation, and Andrew has not yet presented any such
evidence.

However, the point I wish to emphasize here is that, even if Andrew's
interpretation on this point were accepted (for the sake of further
discussion), this would seem to make very little difference. Even if the
value transferred does not change in Phase 2, it will change in Phase 3
(to reflect the new value of cotton). Because we have agreed that the
value transferred in Phase 3 is equal to the CURRENT value of cotton .
Therefore, as soon as this batch of yarn moves into Phase 3 (i.e. onto the
market), then the value transferred from the cotton to the yarn will
change to reflect the new value of cotton. Therefore, the end result is
that the value transferred to the yarn in Phase 3 (when it really matters,
because the yarn is sold and the value transferred converted into money)
will be the same according to both of our interpretations.

The only difference between our two interpretation is that, if there is a
change in the value of cotton during Phase 2, then the revaluation of the
value transferred will be delayed for a short time until after production
has finished and the yarn moves into Phase 3. But at the end of phase 3
when the yarn is sold (when it really matters), then the value transferred
in the two interpretations will be the same.

Andrew, do you disagree with any of this?

3. In his most recent post, Andrew continues our discussion of one of his
numerical examples. Concisely paraphrased, Andrew asks: Assume that the
value of a batch of cotton = 10 when this cotton enters production.
Assume also that while this cotton is in production (i.e. during Phase 2),
the value of cotton changes to 15. Andrew asks: What will be the value
transferred from the cotton to the yarn "when the yarn is completed":
10 or 15?

My answer to Andrew's question, as should be clear, is that the value
transferred from the cotton will change as soon as the value of the cotton
changes ("at whatever stage of completion"), so that the value transferred
"when the yarn is completed" will = 15.

Andrew, you seem to suggest that the value transferred to the yarn will
still = 10 "when the yarn is completed". What exactly do you mean by
"when the yarn is completed"? At what point in the circulation of capital
does this refer to? I presume it refers to the end of Phase 2. However,
as I have argued above, even if your interpretation were accepted, it
would make very little difference. As soon as this yarn moves into Phase
3, the value transferred to this yarn will = 15, as in my interpretation.

Andrew, I promise to answer your other questions as soon as possible,
hopefully next week after Boston.

I look forward to your response and to further discussion.