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>This is a further, more direct, response to Ajit's (3592), which I think
>illustrates the more general point I made in my last post: that Marx's
>theory in Volume 1 is about the determination of money magnitudes by
>labor-time magnitudes; it is not about the determination of labor-time
>magnitudes, unrelated to money magnitudes. It also relates to points
>raised by Ajit and Rakesh and Paul Z. in subsequent posts. I will respond
>to these later posts as time permits. I have only limited access to email
>these days. I thank Andy B. for stimulating questions that helped generate
>this post.
>
>
>1. Ajit cites the following passage from the beginning of Chapter 8 of
>Volume 1 to support his interpretation that constant capital is defined in
>terms of labor-time:
>
>"The worker adds fresh VALUE to the material of his labor by expending on
>it a given amount of additional labor, no matter what the specific content,
>purpose and technical character of that labor might be. The VALUES of the
>means of production used up in the process are preserved, and present
>themselves afresh as constituent parts of the VALUE of the product; the
>VALUE of the cotton and thek spindle, for instance re-appear again in the
>VALUE of the yarn. The VALUE of the means of production is therefore
>preserved by being transferred to the product." (C.I: 307)
>
>Notice that Marx does not explicitly state in this passage what he means by
>VALUE, whether labor-time (the substance of value) or money (the form of
>appearance of value). He says that fresh value is added by labor, but this
>is consistent with my interpretation, to be elaborated below, that value
>here means the form of appearance of value, or money. Additional labor
>produces additional money-value. Marx also says in this passage that the
>value of the means of production is transferred to the value of the
>product, again without clearly specifying which of the two aspects of value
>he is talking about.
Fred,
I shall take the last sentence as an implicit reply to my challenge which
alas does seem to have been understood.
Marx is clearly saying that the value transferred from the means of
production is determined by the paid and unpaid labor objectified therein,
not the money or the value of the money advanced to purchase those means
of production.
And it is basic to Marx's theory that the the value of the means of
production will tend to differ from the money or the value of the money
needed to purchase them; that is, that there is price value divergence in
terms of the inputs or, as Marx puts it, we should not assume that the
value of the means of production going into a commodity is determined by
its cost price, in particular the money price of the means of
production--though this is the assumption Marx makes in his tableaux so in
this sense I agree with you: there is no reason to transform the inputs
into prices--they are already in money prices.
Of course it is true that Marx's tableaux does not then yield an
equilibrium set of prices for simple reproduction, but I contest the
necessity of studying reproduction on this basis. For example, I do not
understand where Duncan justifies the condition that prices must satisfy
equilibrium conditions--in his example, why the output price of steel can't
be $2.10 if the input price is $2 even. Unit prices are changing all the
time in the real world even if they are not allowed that freedom in a set
of simultaneous equations which moreover leave quite opaque where exactly
capital's endemic revolutions in value are accomplished, as Paolo Giusanni
has recently pointed out.
Marx was not concerned with this problem. The correction for which Marx is
calling is not the transformation of inputs from values to prices
(Bortkiewicz, Sweezy, Meek). The inputs are already in prices in part for
the reason you have already stated: money is the necessary form of
appearance of value.
Marx is rather arguing that because the inputs are already in prices we do
not thus know the value of the means of production which is going into
commodities in the respective branches, though correcting for this would
not change the total surplus value produced, the average rate of profit or
the set of production prices which are indeed calculated on the basis of
cost price into which the price, not the value, of the inputs enters.
The reason for this non effect is simply that in those cases where the
value of the means of production and thus the value transferred to the
output is higher than the money or the value of the money needed to
purchase them, there should be compensating cases where the value of the
means of production is lower than the money or the value of the money
needed to purchase them.
So it should cancel out. For this reason, your monetary macro method
yields the same average rate of profit and production prices as my
understanding of Marx's method.
By not doing the correction for which Marx calls, we are left however with
a distorted understanding of the value (c+v+s)/price of production
discrepanies in each branch. The tableaux is misleading.
There needs to be two categories--the money or the value of the money
advanced to purchase the means of production (which is what enters into
cost price on which basis profit is appropriated) and the value of those
means of production (which is what would allow us to accurately guage
value/price of production discrepanies in the respective branches).
You are saying that Marxs treats the price and value of the inputs as
one. Which is true in the tableaux. Yet to basically quote Marx, however,
this is simply where one goes wrong in assuming that the value of the
means of production going into a commodity is determined by its cost price.
>Furthermore, whenever Marx used the term "the VALUE of commodities" after
>Section 3 of Chapter 1, without further qualification, he generally meant
>the FORM OF APPEARANCE of value, or money (or prices). Capital is filled
>with sentences in which Marx said in effect:
>
> "the VALUE of the commodity IS x SHILLINGS."
>
>NOT: "the VALUE of the commodity IS y LABOR-HOURS"
>If "value" in all these sentences is interpreted to mean LABOR-HOURS, then
>all these sentences become nonsense. Marx did not say "the value of
>commodities is y labor-hours, which can be illustrated by x shillings."
>Rather Marx said that the value of commidities IS x shillings (or pounds or
>whatever). So he was talking about the form of appearance of value.
>
Fred, "IS" is indeed shorthand for "IS EXPRESSED AS"; otherwise, price and
value are conflated.
>
>"We have no need at present to investigate the VALUE of this cotton, for
>our capitalist, we will assume, bought it at its full VALUE, say 10
>SHILLINGS." (p. 293)
Exactly. Marx is making an ASSUMPTION (he clearly says so) here which he
later insists must be relaxed. That is, Marx is assuming that the price
paid for the cotton is its value. He is assuming away the problem that the
value of the cotton--the paid and unpaid labor objectified therein--and
thus the value transferred is not equal to the price paid due to the effect
of the equalisation of profit rates on price formation in the prior round
of production.
Constant capital is defined (p. 317) as "that part
>of CAPITAL" that is exchanged for means of production.
Again, Marx assumes that the money capital invested for means of production
is equal to the value of the means of production or the constant capital.
He later says it in fact an error assume that the value of the means of
production consumed in the making of a commodity can be determined by its
cost price.
All the best, Rakesh
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