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Fred.
My point is that the scale of what capitalists earn will vary with the
amount of money put forward at the start of the M-C-M' circuit. And since
you agree that M can be expanded from credit then the scale of M' is driven
by what what capitalists spend (M) as initial outlays. What they spend is
not constrained by what they earn, it is only constrained by credit
arrangements. In this sense they earn what they spend. Regardless of the
volume of surplus labour produced in the previous period they can expand
their money spending in accordance with how much can be borrowed. The volume
of surplus labour is therefore driven by the initial money spend.
Am not sure if I am articulating this well, but I think if you view
capitalism as a monetary production economy then this way of reasoning
follows logically. Viewing surplus labour as the starting point, as if it
was some sort of virtual bank holding labour units, is akin I think to a
corn model in which the farmer holds corn units.
Yours comradely, Andrew.
> -----Original Message-----
> From: Fred B. Moseley [SMTP:fmoseley@mtholyoke.edu]
> Sent: 01 July 2000 00:43
> To: ope-l@galaxy.csuchico.edu
> Subject: [OPE-L:3548] Re: RE: money-capital as initial givens
>
>
> A quick reply to Andrew T. (3545).
>
> Andrew, thanks for you kind words. I agree that capitalists can use
> credit to initiate the circuit of capital. But I do not agree with
> Kalecki that capitalists earn what they spend. I agree instead with
> Marx that what capitalists earn is produced by the surplus labor of
> workers. What about you?
>
> Comradely,
> Fred
>
>
> P.S. My paper on the new solution is attached, as you requested.
> I would of course be very interested in any comments, etc.
>
>
>
> On Wed, 28 Jun 2000 A.B.Trigg@OPEN.AC.UK wrote:
>
> > Date: Wed, 28 Jun 2000 23:12:29 +0100
> > From: A.B.Trigg@OPEN.AC.UK
> > Reply-To: ope-l@galaxy.csuchico.edu
> > To: ope-l@galaxy.csuchico.edu
> > Subject: [OPE-L:3545] RE: money-capital as initial givens
> >
> > Fred.
> > This seems to me like a very accurate and well articulated summary of
> the
> > monetary circuit. A couple of questions: If money is the driving force
> > then would you agree that capitalists can use credit to initiate the
> circuit
> > without drawing from existing stocks of surplus value? Since, that is,
> it
> > is a monetary production economy and not a corn economy in which all
> there
> > is to invest is the previous periods surplus. Would you agree,
> therefore,
> > with Kalecki's argument that capitalists earn what they spend rather
> than
> > spend what they earn?
> >
> > I would also very much like to see a copy of your 'new solution' paper.
> >
> > Cheers.
> >
> > Andrew (Trigg)
> >
> > > -----Original Message-----
> > > From: Fred B. Moseley [SMTP:fmoseley@mtholyoke.edu]
> > > Sent: 27 June 2000 20:06
> > > To: ope-l@galaxy.csuchico.edu
> > > Subject: [OPE-L:3543] money-capital as initial givens
> > >
> > >
> > > Unfortunately, I have not had much time to follow the interesting
> > > discussion between Rakesh and Paul C. and others about the relation
> > > between labor-time and money in Marx's theory. But I noticed that
> Rakesh
> > > mentioned my "monetary" interpretation of the initial givens in Marx's
> > > theory (according to which the initial magnitudes of constant capital
> and
> > > variable capital are taken as given in terms of money-capital) and
> that
> > > Paul has criticized this interpretation. This is a brief response to
> > > Paul.
> > >
> > > I have explained the rationale for this assumption in several papers
> (the
> > > main ones are my 1993 paper in *Marx's Method in Capital* and a
> > > forthcoming paper in the RRPE ("A Sympathetic Critique of the `New
> > > Solution'," which I would be happy to send anyone).
> > >
> > > Let me try to briefly summarize the rationale for this interpretation:
> > >
> > > 1. The circulation of capital is the overall analytical framework for
> > > Marx's theory, and is of course expressed symbolically as M - C - M',
> or
> > > in its expanded form as M - C ... P ... C' - M'. This "general
> formula
> > > for capital", it should be noted, BEGINS WITH MONEY, i.e. with M, a
> > > certain amount of money-capital invested to purchase means of
> production
> > > and labor-power. Therefore, this "general formula for capital" itself
> > > suggests (especially in combination with the textual evidence and
> other
> > > points discussed below) that the starting-point of Marx's theory, the
> > > initial givens with which the theory begins, are the quantities of
> > > money-capital, M, that initiate the circulation of capital, the
> process
> > > that Marx is analyzing. The purpose of Marx's theory, in a nutshell,
> is
> > > to explain how the given quantity of money-capital, M, increases its
> > > magnitude, i.e. becomes M + dM. As Marx put it in the
> > > "Results" manuscript (using in this passage x instead of M to stand
> for
> > > money): "The fact that the purpose of the process is that x should be
> > > transformed into x + dx also points to the path our own investigations
> > > should take." (C.I: 977)
> > >
> > >
> > > 2. This interpretation is further supported by the logical structure
> of
> > > Parts 1, 2, and 3 of Volume 1 of Capital. In Part 1, money is derived
> as
> > > the necessary form of appearance of the value of commodities. In Part
> 2,
> > > capital is defined in terms of this previously derived concept of
> > > money: as money that becomes more money, i.e. as M - C - M'. Part 3
> then
> > > analyzes the origin of the increment of money that is characteristic
> of
> > > capital, WITH THE INITIAL MONEY-CAPITAL TAKEN AS GIVEN. In this way,
> > > Parts 1 and 2 provide the logical presuppositions (the "givens") for
> > > Marx's theory of surplus-value in Part 3 and beyond. Marx did not
> > > suddenly in Part 3 ignore the prior logical development of money and
> > > capital in Parts 1 and 2 and introduce out of nowhere the technical
> > > conditions of production and the real wage as the initial givens in
> his
> > > theory of surplus-value in Part 3.
> > >
> > > The Sraffian interpretation, on the other hand, has no explanation for
> > > Marx's analysis in Parts 1 and 2 or for the logical relation between
> these
> > > two parts and the theory of surplus-value in Part 3. These key parts
> of
> > > Volume 1 are usually just ignored by this interpretation, and Marx's
> > > theory is turned into Sraffa's theory, starting with the technical
> > > conditions of production and the real wage.
> > >
> > > Another related aspect of the logical structure of the first three
> parts
> > > of Volume 1 is that Parts 1 and 2 are about the "sphere of
> > > circulation" and Part 3 begins Marx's analysis of the "sphere of
> > > production" (with the famous passage at the end of Part 2 about moving
> > > from the "noisy sphere of circulation" to the "hidden abode of
> > > production" marking the transition between these two stages of the
> > > analysis). Marx argued that, in his theory of capital, the analysis
> of
> > > circulation is a necessary prelude to the analysis of production
> because
> > > the circulation of capital begins in the sphere of circulation; it
> begins
> > > with the purchase of means of production and labor-power by a certain
> > > quantity of money-capital in the sphere of circulation, i.e M - C.
> Again,
> > > Marx's prior analysis of the sphere of circulation in Parts 1 and 2
> > > provides the logical presuppositions (the "givens') for his later
> analysis
> > > of the sphere of production in Part 3 and beyond.
> > >
> > > Marx emphasized that the means of production do not simply enter
> > > capitalist production as physical goods or as use-values; rather they
> > > enter capitalist production through circulation, as commodities, with
> > > prices; i.e. they have been purchased with a certain amount of
> > > money-capital in the sphere of circulation. This quantity of
> > > money-capital that initiates the circulation of capital prior to
> > > production are the initial givens, the starting-point of Marx's
> > > theory. As Marx put it succinctly in the "Results": "the means of
> > > production enter production as COMMODITIES, i.e. as MONEY." (C.I:
> 952)
> > >
> > > Again, the Sraffian interpretation of Marx's theory completely ignores
> > > this initial analysis of the circulation of capital in the sphere of
> > > circulation, and implicitly assumes that capital first appears, not in
> > > circulation, but in production, as the physical inputs to
> > > production. This is clearly not Marx's logical method in the first
> three
> > > parts of Volume 1. The initial quantities of money capital that
> provide
> > > the givens in Marx's theory of surplus-value come from circulation,
> not
> > > from production.
> > >
> > >
> > > 3. Finally, this interpretation is strongly supported textually by
> > > numerous passages throughout the various drafts of Capital in which
> Marx
> > > explicitly stated that the money-capital which initiates the
> circulation
> > > of capital is the "PRESUPPOSED capital" or the "POSTULATED capital" or
> the
> > > "STARTING POINT" or the "POINT OF DEPARTURE" for his analysis of the
> > > circulation of capital and the production of surplus-value. These
> > > references can be found in Chapter 4 of Volume 1 of Capital and in the
> > > earlier drafts of this chapter in the Grundrisse (G: 250-64) and in
> the
> > > "1861-63 Manuscript" (Marx-Engels Collected Works, vol. 29,
> > > pp. 501-07; and vol. 30 pp. 9-20 and 66-75). There are also numerous
> > > similar passages in the "Results" manuscript. One especially clear
> > > passage is the following:
> > >
> > > "Here, where we are concerned with MONEY only as the POINT OF
> DEPARTURE
> > > for the immediate process of production, we can confine ourselves to
> the
> > > observation: capital exists here as yet only as a GIVEN QUANTUM OF
> VALUE =
> > > M (MONEY), in which all use-value is extinguished, so that nothing but
> the
> > > monetary form remains... If the ORIGINAL CAPITAL IS A QUANTUM OF
> VALUE =
> > > X, it becomes capital and fulfills its purpose by changing into x +
> dx,
> > > into a quantum of money or value = the original sum + a balance over
> the
> > > original sum. In other words, it is transformed into the GIVEN AMOUNT
> OF
> > > MONEY + additional money, into the GIVEN VALUE + surplus-value....
> As a
> > > GIVEN SUM OF MONEY, x is a constant from the outset and hence its
> > > increment = 0. In the course of the process, therefore, it must be
> change
> > > into another amount which contains a variable element. Our task is to
> > > discover this component and at the same time to identify the
> mediations by
> > > means of which a constant magnitude becomes a variable
> > > one. (C.I: 976-77).
> > >
> > > Nowhere that I know of did Marx refer to the means of production as
> the
> > > "givens" or the "starting point" for his analysis of the circulation
> of
> > > capital. Either Marx, who it should be remembered had a Ph. D. in
> > > Philosophy and paid a great deal of attention throughout the various
> > > drafts of Capital to questions of logical method, was extremely
> sloppy in
> > > these many passages, or (which seems to me by far more
> > > reasonable) Marxintended the usual methodological meanings for the
> terms
> > > "given," "postulated," "presupposed," etc. - i.e. that they are the
> > > initial data with which his theory begins.
> > >
> > >
> > > 4. Constant capital and variable capital are then defined in Chapter
> 8 of
> > > Volume 1 as the two components of the money capital (M) that initiate
> the
> > > circulation of capital. In other words, M = C + V. Constant capital
> is
> > > the money capital used to purchase means of production and variable
> > > capital is the money capital used to purchase labor-power. The key
> point
> > > to be emphasized again is that constant capital and variable capital,
> like
> > > the general concept of capital of which they are component parts, are
> > > taken as given in terms of money.
> > >
> > >
> > > I would of course appreciate comments, questions, criticisms, etc.
> > >
> > >
> > > Comradely,
> > > Fred
> >
> > << File: >>
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