On Thu, 7 Dec 2000, Rakesh Narpat Bhandari wrote: > >> Well, let's assume that each monetary unit simply represents > >> .5 labor hours. > > > >That's precisely what you "simply" cannot do, if there's a > >transformation going on and money is a commodity. As Paul > >suggests, maybe you can do it with fiat money. > > But if money is a commodity, its value is variable; yet it remains > invariable even though technical change is going on. So, having made > this heroically fictitious assumption earlier, why can't Marx > continue to assume that the money commodity invariably commands, say, > .5 hours of labor in the transformation as well? It's a different order of assumption. He can continue to assume that the quantity of the money commodity corresponding to the monetary unit takes .5 hours to produce, but if he assumes it continues to command or "represent" .5 hours in exchange he's appealing to the deus ex machina of a commodity that's immune to the transformation. However, I think it's quite legitimate to analyse the transformation in terms of a fiat money (although Marx himself probably wouldn't have liked that; he was very insistent on the claim that money ultimately has to be a commodity). The commodity money business is why -- I think -- Bortkiewicz and Sweezy held to the equality of total profit and total surplus value. In the toy example I gave earlier there are 3 departments and simple reproduction is going on. If one of the departments is producing the money commodity, it must be dept 3. Now, this money is taken as the numeraire: its price is identically 1.0. But dept 3 has an organic composition below the average, and in the transformation a department in such a position would ordinarily see its price fall. Since the price of money _can't_ fall, the only way to have the profit rate equalized for all 3 sectors is for the _general_ level of prices to rise. Money "stays put" at a price of 1 while the rest of the economy adjusts around it. Since money production = dept 3 = the surplus, total profit remains equal to total surplus value, while total price comes to exceed total value. This analysis is perfectly coherent, on the (of course, unrealistic) assumptions given. Allin Cottrell.
This archive was generated by hypermail 2b29 : Sun Dec 31 2000 - 00:00:04 EST