Rakesh writes: >Now...cross examination is up...what's the point...I am anxious to know. OK, fair enough. The point of my questions was to pinpoint where we diverge in our reading and assessment of Marx's argument in Vol I, Part 2 of Capital. I think I now know the fundamental point of divergence; it has to do with the putative implications of Marx's Ch. 4 definition of surplus value. Taking Marx's definition of surplus value as simply the positive difference between M' and M in the circuit of capital M-C-M', and adding no more than the stipulation that surplus value is an "aggregate category" descriptive of the capitalist class taken as a whole, you see Marx's Ch. 5 rejection of the possibility of accounting for surplus value merely on the basis of redistribution of *existing* value as a legitimate *inference* from his Ch. 4 definition. As mentioned before, my sense is that many would agree with you in this understanding of Marx's argument. But in my reading, if Marx's rejection of redistribution of existing value as a basis for surplus value is to be understood as an *inference* rather than as *definitional*, it is plainly invalid, because it is based on a classic fallacy of division, i.e. the claim that a condition pertaining to the whole is applicable to a part of the whole. That is: since by definition exchange does not create value, it necessarily follows that, taken alone, the sphere of circulation can only redistribute existing values without augmenting the total sum of value. But it *does not* follow from this tautology that a given *subset* of traders--say, capitalists--couldn't systematically end up with more value (M') than they started with (M) in initiating a particular type of exchange circuit, i.e. the circuit of capital (M-C-M'). Thus when Marx says, on pp. 265-6 of Ch. 5, "The value of circulation has not increased by one iota; all that has changed is its distribution between A and B. What appears on one side as a loss of value appears on the other side as surplus value; what appears on one side as a minus appears on the other side as a plus," that's necessarily true, BUT his conclusion that "..[t]he capitalist class of a given country, taken as a whole, cannot defraud itself" is an utter _non sequitur_, because it assumes without justification that *both* parties A and B in his example are capitalists. But this need not be the case. The most obvious counterexample is that involving merchant capital: Imagine an exchange economy of A's and B's in which the A's are all small commodity producers--thus non-capitalists-- and the B's are all merchant capitalists. Each merchant capitalist buys commodities from some producers (M-C) and sells them to others at a profit (C-M', completing the circuit of capital). If this is done by the merchant capitalists as a class we have surplus value in the sense you attribute to Marx: M-C-M', with M' greater than M, as an aggregate category descriptive of the entire class. Of course, for the class of small commodity producers taken as a whole, we have an aggregate circuit C-M-C', with the value content of C' less than that of C, *but this is utterly irrelevant from the standpoint of Marx's definition, as you have specified it.* All we need to know is that M' > M in the circuit of *capital*. Similar scenarios could be constructed for interest-bearing capital. In any case, it is clear that Marx's rejection of redistribution of existing value as a basis for surplus value *does not follow* from the definition of surplus value as the positive difference between M' and M and the tautological observation that new value is not created in exchange, even if we add the proviso that surplus value is an "aggregate category" descriptive of the capitalist class. There are also deep logical problems with Marx's Ch. 5 argument even when a stronger definition of surplus value is adopted, but first let's stop and take stock. Do you agree that, given your reading of Marx's Ch. 4 definition of surplus value, Marx's Ch. 5 rejection of redistribution of existing value as a basis of surplus value is a non sequitur based on a fallacy of division? Gil
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