Rakesh, thanks for your (4568). My responses below. On Thu, 23 Nov 2000, Rakesh Narpat Bhandari wrote: > re Fred's 4567 > > > >1. Because I think Marx was trying to explain the ACTUAL surplus-value > >produced, not a HYPOTHETICAL "surplus-value" (equal to the "direct > >price" of surplus-goods). > > As I said, I don't think Marx is interested in the actual magnitudes > but in the relations between the variables. So the actual sum of > surplus value or profit rate is not important; what is important is > how they are determined > > dM/M= (s/v)/ (c/v) + 1, ignoring turnover time. > > So even if c and v (cost price) have to be modified once Marx drops > the controlling assumption that the inputs sell at simple prices > (commodity value x m), the variables are still related in the same > way. Since it is these relationships which are important--along with > the time paths for the variables--it hardly matters if Marx holds to > assumption of exchange at simple prices. I disagree. I think the actual magnitude of total surplus-value determined in Volume 1 is very important for Marx (not just how surplus-value is determined), because the total surplus-value that is determined in Volume 1 is then taken as given (predetermined) in the analysis of the distribution of surplus-value in Volume 3. In other words, the total surplus-value determined in Volume 1 becomes the fundamental quantitative premise of all of Volume 3. That is why the magnitude of surplus-value is so important. Volume 3 is mainly about how this given total surplus-value is divided into individual parts, first into equal rates of profit and then the further division of surplus-value into industrial profit, merchant profit, interest, and rent. Rakesh, I ask again: How do you interpret all the passages throughout Marx's manuscripts in which he explicitly stated this key quantitative premise of Volume 3 (which I have documented in two papers)? Do you think that Marx did not recognize that his theory of prices of production contradicted this key quantitative premise, which he repeated so many times, including in many discussions of Part 2? You seem to be saying that what Marx determined in Volume 1 is a HYPOTHETICAL surplus-value: the "simple price" of surplus goods. According to your interpretation, this hypothetical surplus-value determined in Volume 1 first must be "transformed" into actual profit in Part 2 (including a change of magnitude), and then this actual profit is divided into individual parts. But there is never a hint in Marx's texts (that I know of) that the key quantitative premise of a predetermined total surplus-value applies only to Parts 4-7 of Volume 1 and does not apply to Part 2. Indeed, this quantitative premise is explicitly stated in many discussions of Part 2. I don't think there can be any doubt that Marx intended this premise to apply to all of Volume 3, including Part 2. > >2. Because Marx's analytical framework is the circulation of capital: > > > > M - C ... P ... C' - M' > > > >and the circulation of capital begins with M, the money-capital invested > >to purchase MP and LP. These quantities of money that initiate the > >circulation of capital are the initial givens in Marx's theory of the > >circulation of capital (and especially of how M turns into M'). These > >quantities of money-capital that initiate the circulation of capital are > >identically equal to the prices of the MP and MS, but these quantities of > >money-capital are not derived from these prices. Rather they are taken as > >given directly, as the "first form of appearance" of capital in the > >circulation of capital. > > > Fred, this misses how much Marx controls what goes on in his thought > experiment which is the 3 volumes of Capital. He isolates a closed > capitalist economy, allows no foreign trade, no credit, keeps the > value of money constant, lets in only two classes...and conceives of > all goods as if they were perfect aliquots of total value. > > That is, Marx stipulates that all commodities have been (in general) > produced by a capital of average organic composition. This means that > all commodities exchange at prices proportional to their labor values. Rakesh, where did Marx stipulate this? I would appreciate some references. (If you have already answered this question, please forgive me.) I know of no such passages in which Marx "stipulates" (explicitly states?) that all commodities are produced by capitals of the average composition of capital (i.e. of identical compositions of capital). So I would be very interested to read any such passages. > So I do not think Marx takes the sale of inputs as givens; Rakesh, how do you interpret all those passages (which I have documented in several papers) in which Marx explicitly states that the initial M in the circulation of capital (M-C ... etc.) is "presupposed" or "postulated" or "taken as given" or "a given precondition", etc.? What do you think Marx meant by "presupposed", etc. in these passages? Was he just being sloppy in the use of these key logical terms? Wouldn't this be surprising, since he was such an expert on logic? > he fixes > that sale at value or prices proportional to value in order to > isolate surplus value in what he calls the pure case (this of course > being the methodological step to which Gil has objected). In other words, you think Marx isolates a hypothetical surplus-value, not the actual surplus-value, which then has to be transformed into the actual profit in Volume 3. Why would Marx do that? Why not explain the actual surplus-value in Volume 1? > This means that when the assumption of exchange at value or simple > prices proportional to value is dropped, it has to be dropped for > both the inputs and the outputs. And Marx himself recognizes that his > transformation procedure only relaxes the assumption for the outputs. As I have argued before, I don't think Marx said that he failed to transform the cost price (C and V). Rather, I think he said, in effect: now we can see that the given cost price (the "given precondition"; C.III. 265) is not equal to the value of the means of production and means of subsistence (as provisionally assumed up to this point), but is instead equal to the price of production of the MP and MS. The given cost price remains the same, but we now understand more fully the determination of this given amount. Alejandro R and Andrew K and I (independently) have presented several key passages in which Marx explicitly stated that "the cost price is the same" for both values and prices of production. Rakesh, how do you interpret these passages? Thanks again for this discussion. Comradely, Fred
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