# [OPE-L:2091] Re: determination of constant capital

From: Andrew_Kliman (Andrew_Kliman@email.msn.com)
Date: Tue Jan 11 2000 - 15:56:10 EST

A reply to Fred's OPE-L 2047. I thank Fred for his post. I'm not
sure we're getting anywhere, but I'm giving it another shot.

Fred writes:

"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

Yes and no. As I've noted previously (OPE-L 1626), the stuff
about phases is wrong and confused. It collapses different
circuits of capital into one. What you represent as Phase 1 AND
what you represent as Phase 3 BOTH take place AFTER "Phase 2."
For example:

On Tuesday, the unit value of cotton is C(T) and the unit value of
yarn is Y(T), so cotton and yarn produced on Tuesday have the
values C(T) and Y(T).

At midnight, the value of cotton changes to C(W). The most
recently produced cotton has the value C(W). Note that this is a
"Phase 2" phenomenon.

The change in the value of cotton leads to revaluation of cotton
and yarn already in existence, because values in Marx's theory are
determined by the amount of labor needed to produce them now.

Thus, cotton produced on Tuesday (or before), including any cotton
used to produce yarn on Wednesday, now has a value of C(W) instead
of C(T). The value transferred to yarn produced on Wednesday is
C(W) instead of C(T). This is your "Phase 1" phenomenon. BUT IT
IS *SUBSEQUENT* TO THE "PHASE 2" CHANGE.

The change in the value transferred from cotton causes a change in
the value of yarn. Yarn produced on Wednesday, using cotton that
is now worth C(W), will have a value of Y(W) instead of Y(T). But
this change reacts back on all yarn produced on Tuesday (or
before). It now also has a value of Y(W). This is your "Phase 3"
phenomenon. It is also subsequent to the "Phase 2" change.

The change in the value of cotton at midnight affects, can affect,
only what happens THEREAFTER. It does not, cannot, affect what
has happened PREVIOUSLY. IMHO, the contrary notion is just
ludicrous.

Thus, the change in the value of cotton at midnight on Wednesday
cannot affect the value of yarn sold on Tuesday (or before). If
yarn sold on Tuesday was sold for Y(T), it was sold at its value.
(If it remains in existence on Wednesday, then its value on
Wednesday is Y(W). Its value has changed. If one were to try to
revalue it retroactively, then its value would not change. The
value of every bit of yarn sold, from the time of Adam and Eve to
Wednesday, would be Y(W)!)

By the same token, the change in the value of cotton at midnight
on Wednesday cannot affect the value of cotton sold on Tuesday (or
before). It cannot affect the value of cotton employed in
production on Tuesday (or before). It cannot affect the value
transferred from cotton that entered production on Tuesday (or
before). (If one were to try to revalue it retroactively, then
its value would not change. The value transferred from every bit
of cotton, from the time of Adam and Eve to Wednesday, would be
C(W)!)

Thus, the change in the value of cotton affects whatever occurs
AFTER that change, whether a "Phase 1," "Phase 2," or "Phase 3"
phenomenon. It does not, cannot affect anything that occurs
BEFORE that change, whether a "Phase 1," "Phase 2," or "Phase 3"
phenomenon.

So please note, Fred, that the phrase you keep quoting, "at
whatever stage of completion," is just not relevant. It doesn't
make the point you think it does. The change in the value of
cotton affects the values of all cotton and all yarn (in other
words, all inputs into the ultimate product, say coats, at
whatever stage of completion of the ultimate product) AFTER the
change takes place, but only after it takes place. Had Marx
written "at whatever moment in time, whether before or after the
change in the value of cotton," then I'd agree with you. But he
didn't. And had he written that, he would have been nuts, which I
don't think he was.

Your error, Fred, and the error of all simultaneism, is to claim
that the change in the value of cotton can affect something (the
transfer of value) that has taken place before the change. You
are thereby claiming that later events cause earlier events.
Perhaps on Star Trek, but not on this Earth, and not in this mode
of production that exists on this Earth.

The whole matter is much simpler if we imagine the production of
corn by means of corn. If the value of corn changes, it changes
during Phase 2, C ... P ... C', because value is determined in
production. (More precisely, it changes during the Phase 2 of the
circuit of capital of the most recently produced corn.) Thus,
seed-corn entered at one value at time C and corn output exists at
another value at time C'. From time C' onward, ceteris paribus,
all corn that was produced earlier (before time C') will have the
same value as the corn that is produced at time C'. This is true
of corn circulating in the market (analogous to the yarn) and it
is true of corn stocks that, although they were produced before
time C', are employed in production only subsequently (analogous
to the cotton). But the change in the value of corn between times
C and C' does not, cannot, retroactively affect the value
transferred to the corn produced at time C', because the transfer
of value has taken place before time C', between times C and C'.

Fred writes:
"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."

I haven't presented any such evidence?! How can you write such a
thing?! Excuse me, Fred, what do you think is contained in the
paper we are discussing?! Chopped liver? Hardly. What is
contained in it is masses and masses of textual evidence --
explicit textual evidence -- about precisely this, from a wide
variety of Marx's texts; evidence from the Grundrisse, through the
1861-63 manuscript, to the three volumes of Capital. Again and
again Marx writes that the value transferred is determined by the
cost of the input WHEN IT ENTERS PRODUCTION. Since he nowhere
restricts such statements to cases in which values remain
constant, his statements apply generally, to cases in which values
are constant and to cases in which they change. Some of the
evidence, moreover, deals explicitly with the case in which values
change, and Marx holds that this makes no difference; the value
transferred is determined by the cost of the input when it enters
production. For instance:

"the values of material and means of labour only re-appear in the
product of the labour process to the extent that they [...] were
values before they entered into the process. ... [Although their
values can change during the course of the process, this] involves
absolutely no alteration in the circumstance that in the labour
process into which they enter as material and means they are
always preposited as given values, values of a definite magnitude.
For in this process itself they only emerge as values in so far as
they entered as values" (Marx, MECW 30:79-80).

[A change in the value of constant capital] "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. [...] it is a
definite quantity of *past, objectified* labour, which passes
into the value of the product as a determining factor" (Marx,
MECW 30:413).

As I noted in the paper, if instead the value transferred from
constant capital were to depend on the replacement cost of its
material elements, it would not be a determining factor of the
product's value, but a magnitude determined simultaneously with
it.

You may not agree with this interpretation of the evidence, Fred,
but how can you deny that I have provided you with it? You have
done nothing to challenge even a bit of this evidence, evidence
that directly supports the temporal interpretation. All you have
done is talk about one phrase, "at whatever stage of completion,"
a phrase that, I note again, simply fails to support your
point.

Fred writes:
" ... 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). ... 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."

I've disproved this before, Fred. I won't bother to do so again.
re-state the result. The value transferred will NOT be the same,
because the values of currently produced commodities will be
different. (The value of the most recently produced cotton, e.g.,
will be different, so the value transferred to yarn from cotton,
whether produced now or in the past, will be different.) When the
transfer of value is temporally determined, the result is one set
of values; when the transfer of value is simultaneously
determined, the result is a different set of values. And you,
Fred, want to determine the value transferred simultaneously.
Despite your denials, this is EXACTLY what you say in your latest
post (see below).

Fred writes:
"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."

Thus, as I said, you want to determine the value transferred
simultaneously. The value transferred from inputs is determined
simultaneously with the value of outputs. This is exactly what
the Sraffians do. Hence, your denials notwithstanding, you get
the same results as they do (as I've demonstrated again and
again) -- but not the same results as Marx and temporalists do,
not even with a time lag.

Let's examine one of Marx's calculations, presented in section 6
of my paper. Marx studies the production of corn by means of corn
and other inputs.

You assert, Fred, 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." Applying this reasoning to the
case of corn, you would thus contend that the value transferred
from the input, seed corn, will change as soon as the value of the
output, corn, changes, so that the value transferred from the seed
corn "when the corn output is completed" will equal the value of
the corn output.

Thus, imagine along with Marx that, in year 1, the value of corn
(as input and as output) is £2/qr. In year 2, "work is carried
on in the same conditions," using "the same amount of labour,"
but the output of corn is double that of year 1. The value of
corn therefore falls in half, from £2/qr to £1/qr; in other
words, the corn output, at the *end* of year 2, has a value of
£1/qr.

Now, you maintain, Fred, that the value transferred from the seed
corn employed in year 2 will likewise be £1/qr. That is because,
supposedly, the value transferred from the seed corn will change
as soon as the value of the corn output changes. Hence, at the
end of year 2, the value transferred from the seed corn will
supposedly equal the value of the corn output, £1/qr.

THIS CLAIM CONTRADICTS MARX'S OWN RESULT. HE COMPUTES THE SEED
CORN PORTION OF CONSTANT CAPITAL AT £2/qr -- THE VALUE IT HAD WHEN
IT ENTERED PRODUCTION. IN HIS YEAR 2, JUST AS IN YEAR 1, HE HAS
20 qrs OF SEED CORN CONSTANT CAPITAL WORTH A TOTAL OF £40, NOT
£20. HE DOES NOT RETROACTIVELY REVALUE THE INPUTS. HE IS NOT A
SIMULTANEIST.

NOR IS IT POSSIBLE TO ARGUE THAT THIS £40 OF SEED CORN CONSTANT
CAPITAL IS JUST ITS HISTORICAL COST, WHILE £20 IS THE SUM OF VALUE
TRANSFERRED. AS I EXPLAIN IN THE PAPER, "HAD MARX COMPUTED THE
VALUE TRANSFERRED FROM THE SEED CORN IN YEAR 2 AT £1/qr, THEN
PROFIT WOULD HAVE EXCEEDED £80 [BUT MARX ARGUES THAT THE PROFIT IN
YEAR 2 IS £80]. USED-UP CONSTANT CAPITAL WOULD CONSTITUTE A
SMALLER SHARE OF THE OUTPUT'S TOTAL VALUE OF £200, AND THUS
SURPLUS-VALUE OR PROFIT WOULD CONSTITUTE A LARGER SHARE, EVEN IF
VARIABLE CAPITAL IS ASSUMED NOT TO CHANGE. MARX'S CONCLUSION THAT
PROFIT REMAINS £80, DESPITE THE RISE IN THE PHYSICAL SURPLUS FROM
40 qrs TO 140 qrs, IS VALID ONLY IF THE VALUE TRANSFERRED FROM THE
SEED CORN IS DETERMINED BY ITS PRE-PRODUCTION VALUE OF £2/qr."

HIC RHODUS! HIC SALTA!

Fred writes:
"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."

Yes, the moment C'.

Ciao,

A2K

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