Hi Rakesh,
Thank you very much for your (4626) and your reconsideration of my
interpretation. I am glad that you now seem to agree with more of my
interpretation. Although there appears to be one important remaining
disagreement: Marx's method of the determination of the value transferred
component of the value of commodities. Let's see.
1. You now seem to agree that the cost prices that Marx took as given in
the determination of the values and the prices of production of
commodities in his tables in Chapter 9 of Volume 3 are equal to given
quantities of money constant capital and variable capital, which in
general are not proportional to the labor-values of the means of
production and means of subsistence. Therefore, we agree that Marx did
not make a mistake in his determination of prices of production; he did
not "forget to transform the inputs" of constant capital and variable
capital from values into prices of production (right?).
However, now you seem to argue that Marx made the opposite mistake in his
tables in Chapter 9: he made a mistake in the determination of the VALUE
of commodities (rather than a mistake in the determination of prices of
production). The mistake has to do with the transferred value component
of the value of commodities. That is, Marx assumed in his tables in
Chapter 9 that the transferred value component of the value of commodities
is determined by the given constant capital, which in general is not
proportional to the labor-values of the means of production. But (you
argue) this is not true. The transferred value component of the value of
commodities is instead determined by the labor-time embodied in the means
of production. So what Marx should have done in these tables is a sort of
"inverse transformation" from the actual money constant capital to the
labor-time embodied in the means of production, in order to determine the
value of commodities correctly. Furthermore, such an "inverse
transformation" of the transferred value component of the value of
commodities would in turn require a similar "inverse transformation" of
profit into surplus-value, which would cause the total amount of
surplus-value to change (right?). (Presumably Marx made a similar mistake
with respect to variable capital, but this is not discussed in this post.)
But Rakesh, why would Marx want to do this? Why would he want to assume
that the transferred value is a hypothetical quantity in order to explain
a hypothetical surplus-value? Why not assume that the transferred value
is the actual quantity of constant capital in order to explain the actual
surplus-value, as I think Marx did?
I don't mean "actual" in the full sense. You are right that the three
volumes of Capital abstract from many concrete aspects. I mean actual in
the sense that the total magnitudes constant capital and the total
surplus-value in Volume 1 are the same as the constant capital and the
total profit in Volume 3. The total magnitudes of constant capital and
total surplus-value in Volume 1 are not more hypothetical quantities in
Volume 1 than in Volume 3, which then have to be transformed into the more
realistic quantities in Volume 3. The total magnitudes in Volume 1 are
the same as, are just as actual as, the total magnitudes in Volume 3.
2. The reason why the value transferred from the means of production is
determined by the given constant capital, rather than the labor-time
embodied in the means of production, is that the means of production have
already been purchased by the given constant capital. As Marx put it (we
will see the passages below), the means of production ENTER PRODUCTION AS
COMMODITIES, i.e. as commodities with a CERTAIN PRICE, and have been
purchased with a certain quantity of money constant capital. Therefore,
the labor-time embodied in the means of production has already been
expressed (or taken a definite social form) - however imperfectly - as the
price of these means of production, or as the constant capital advanced to
purchase them. Even though this advanced constant capital is not
proportional to the labor-time embodied in the means of production, it is
nonetheless this already determined social form (the advanced constant
capital) that is transferred to the value of commodities.
3. This Marx's method determination of the transferred value component of
the value of commodities, by the constant capital advanced to purchase the
means of production, is especially clear in the important manuscript,
"Results of the Immediate Process of Production", written in 1864. Here
we find the following passages:
"Since wheat, hay, cattle, seed of all kinds, etc. are sold as commodities
..., it follows that they ENTER PRODUCTION AS COMMODITIES, i.e. as
MONEY. Like the products, and as their ingredients, the conditions of
production are indeed themselves products and they too are thus reduced to
commodities. And as a consequence of the valorization process they are
included in the calculations as sums of MONEY, i.e. as the autonomous form
of exchange value." (C.I.: 952; emphasis added)
"Since, with the exception of the additional labor, the elements of the
capitalist production process already ENTER THE PROCESS OF PRODUCTION AS
COMMODITIES, i.e. with specific PRICES, it follows that the VALUE ADDED BY
THE CONSTANT CAPITAL is ALREADY GIVEN in terms of a PRICE. For example,
in the present case 80 for flax, machinery, etc. (C.I: 957; emphasis
added)
I think these passage say: since the means of production enter the process
of production as commodities with definite prices, the value transferred
from the means of production is ALREADY GIVEN in terms of these prices, or
in terms of the constant capital advanced to purchase them.
4. Similarly, in Chapter 1 of Volume 3, the transferred value is again
clearly determined by the given constant capital advanced to purchase the
means of production. To pick one passage out of many:
"We know from Volume 1 (Chapter 9, p. 320) that the value of the product
newly formed, in this case 600, is composed of (1) the REAPPEARING VAULE
OF THE CONSTANT CAPITAL of 400 spent on the means of production, and (2) a
newly produced value of 200_ [T]he value of the means of production
consumed, a total of 400, is transferred from these means of production to
the product. This OLD VALUE REAPPEARS _ BECAUSE IT EXISTED PREVIOUSLY AS
A COMPONENT OF THE CAPITAL ADVANCED. The CONSTANT CAPITAL that was spent
is thus REPLACED by the PORTION OF COMMODITY VALUE THAT IT ITSELF ADDS TO
THIS COMMODITY VALUE.
It seems clear to me that Marx is saying here that what reappears in the
value of commodities (i.e. what is transferred from the means of
production to the value of commodities) is the constant capital advanced
to purchase the means of production.
5. This intepretation of Marx's determination of transferred value is
further supported by several key passages in Part 2 of Volume 3, in which
Marx explicitly stated, and illustrated with algebraic clarity, that the
cost price in Volume 3 that partly determines the price of production of
commodities IS THE SAME AS the constant capital and variable capital in
Volume 1 that partly determine the value of commodities.
5a. The first passage is on p. 263:
"If we take it that the composition of the average social capital is 80c +
20v, and the annual rate of surplus-value s' = 100 per cent, the average
annual profit for a capital of 100 is 20 and the average annual rate of
profit is 20 per cent. For any cost price k of the commodities annually
produced by a capital of 100, their PRICE OF PRODUCTION WILL BE K +
20. In those spheres of production where the composition of capital is
(80-x)c + (20+x)v, the surplus-value actually created within this sphere,
or the annual profit produced, is 20+x, i.e. more than 20, and the
COMMODITY VALUE PRODUCED IS K + 20 + X, more than k + 20, or more than the
price of production. In those spheres of production where the composition
of capital is (80+x)c + (20-x)v, the surplus-value or profit annually
created is 20-x, i.e. less than 20, and THE COMMODITY VALUE THEREFORE IS K
+ 20 - X, more than k + 20, or more than the price of production. Leaving
aside any variation in turnover times, the production prices of
commodities would be equal to their values only in cases where the
composition of capital was by chance precisely 80c+ 20v." (emphasis added)
Here Marx is clearly saying that the COST PRICE (K) IS THE SAME for both
the value and the price of production of commodities. The only difference
between the value and the price of production of commodities is whether
surplus-value or profit is added to this same cost price. In the case of
a commodity produced by a capital of average composition, the
surplus-value added to the cost price is equal to the profit added to this
same cost price, and hence the price of production of such an
"average" commodity will be equal to its value. This equality of the
value and the cost price of commodities produced with capitals of average
composition IS POSSIBLE ONLY if the cost price is the same for the
determination of both value and price of production.
5b. Marx repeated these same points in the next paragraph
(pp. 263-64) and gave a simple numerical example:
" I. 80c + 20v +20s. Rate of profit = 20%.
Price of product = 120. Value = 120.
II. 90c + 10v +10s. Rate of profit = 20%.
Price of product = 120. Value = 110.
III. 70c + 30v +30s. Rate of profit = 20%.
Price of product = 120. Value = 130."
Could it be clearer that the cost price is the same for the determination
of both values and prices or production? What changes between values and
prices of production is whether surplus-value or profit is added to this
same cost price.
5c. The following paragraph (pp. 264-65) begins with the three sentences
that Rakesh has emphasized in recent posts to support his interpretation:
"The development given above also involves a modification in the
determination of a commodity's cost price. It was originally assumed that
the cost price of a commodity equaled the value of the commodities
consumed in production. But for the buyer of a commodity, it is the price
of production that constitutes its cost price and can thus enter into
forming the price of another commodity."
Rakesh has interpreted these sentences to mean that the magnitude of the
cost price in the determination of prices of production in Volume 3 is
different from the magnitude of constant capital and variable capital in
the determination of values in Volume 1.
But this interpretation is flatly contradicted by the two preceding
paragraphs just discussed, and the passages discussed below, including the
continuation of the same paragraph (as I have discussed in recent
posts) in which Marx said that:
"THE cost price of a commodity is a GIVEN PRECONDITION, independent of
his, the capitalist's, production, while the result of his production is a
commodity that contains surplus-value, and therefore an excess value over
an above ITS cost price. As a general rule, the principle that THE cost
price of a commodity is less than its value has been transformed in
practice into the principle that ITS cost price is less than the price of
production. For the total social capital, where price of production
equals value, this assertion is identical with the earlier one that THE
cost price is less than the value. Even though it has a different meaning
for the particular spheres of production, the basic fact remains that,
taking the social capital as a whole, THE cost price of the commodities
that this produces is less than their value, or than the price of
production which is identical with this value for the total mass of
commodities."
Marx does not say in these sentences that the magnitude of the cost price
changes, but rather that THE SAME COST PRICE is first related to the value
of commodities, and then is related to the price of production of
commodities. This is especially clear in the last three sentences about
the total social capital.
5d. Further textual evidence from these pages of Chapter 9 to support
this interpretation has been discovered recently by Alejandro
Ramos-Martinez (and discussed on OPEL; Alejandro, are you there?). Marx's
original manuscript of Volume 3 (written in 1864-65) has recently been
published in German for the first time in the authoritative Marx Engels
Gesamtausgabe (MEGA) (unfortunately, this particular volume will not be
included in International Publishers's 50-volume Marx-Engels Collected
Works). Alejandro examined Marx's original manuscript, and discovered
that, for some inexplicable reason, Engel's version of Volume 3 LEFT OUT A
CRUCIAL PARAGRAPH which comes immediately prior to the paragraphs quoted
above on pp. 263-65 of the Vintage edition. In this omitted paragraph, it
is clearly stated, both in words and algebraically, that K IS THE SAME for
the determination of both the value and the price of production of
commodities. Part of this paragraph (translated from German by my Mount
Holyoke colleague, Jens Christiansen) is as follows (emphasis added):
"The cost price is, as we see, always smaller than the value of the
commodity. The price of production can be smaller, bigger, or equal to
the value of the commodity. THE VALUE OF THE COMMODITY = THE VALUE OF THE
CAPITAL CONSUMED IN THE PRODUCTION OF THE COMMODITY PLUS THE
SURPLUS-VALUE. If we take, as in the original development of the cost
price (Chapter 1), cost price = value of the capital advanced in the
production of the commodities, we have the following equations:
value = cost price + surplus-value V = K + s
or profit as identical with surplus-value or = K + p
cost price = value - surplus-value or K = V - s
price of production = cost price + profit P = K + p'
calculated according to the general rate of profit = p'.
We can see that again THE SAME K is added to the surplus-value on the one
hand and to the average profit on the other hand to obtain respectively
the value (V=K+s) and the price of production (P=K+p') of
commodities. The only difference between the value and the price of
production of a given commodity is the difference between the
surplus-value contained in it and the average profit allotted to it. If
the surplus-value is greater (or less) than the average profit, then the
value is greater (or less) than the price of production.
5e. In Chapter 12 of Volume 3, Marx returned briefly to the point that
the price of production of an "average" commodity is equal to its value,
and stated again that, since the cost price is the same in the
determination of both the value and the price of production of these
commodities, and since profit is equal to surplus-value for these average
commodities, the price of production of commodities of these commodities
is equal to their value.
"Yet this possibility in no way affects the correctness of the principles
put forward for commodities of average composition. The quantity of
profit that falls to the share of these commodities is equal to the
quantity of surplus-value contained in them. For the above capital, with
its composition of 80c + 20v, for example, the important thing as far as
the determination of surplus-value is concerned is not whether these
figures are the expression of actual values, but rather what their mutual
relationship is; i.e. that v is one-fifth of the total capital and c is
four-fifths. As soon as this is the case, as assumed above, the
surplus-value v produced is equal to the average profit. On the other
hand, because it [the surplus-value; FM] is equal to the average profit,
THE PRICES OF PRODUCTION = COST PRICE + PROFIT = K + P = K + S, which is
equal in practice to the commodity's VALUE." (C.III: 309; emphasis added)
(Marx discussed this same point about average commodities in Chapter 11 of
Volume 3 and in an important letter (April 30, 1868) in which Marx
summarized for Engels the main points of Volume 3.)
So, Rakesh, I don't think Marx made a mistake in his tables in Chapter 9,
when he presented the constant capital (and variable capital) that partly
determine the values of commodities as THE SAME MAGNITUDES as the cost
price that partly determines the prices of production.
This is what Marx assumed about the determination of the value of
commodities, and intended to assume: that the transferred value component
of the value of commodities is determined by the given money constant
capital used to purchase the means of production. The same quantity of
constant capital is also taken as given in the determination of prices of
production in Volume 3. That is why the constant capital does not have to
be transformed in the determination of prices of production. (The same
point applies to variable capital as well.)
Thanks again for this stimulating discussion.
Comradely,
Fred
This archive was generated by hypermail 2b29 : Sun Dec 31 2000 - 00:00:04 EST