From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Thu Sep 26 2002 - 23:11:13 EDT
This post is the beginning of my response to Gil's (7693) and (7703). It raises what I think is the fundamental difference in interpretation between us. Gil, I am glad that you agree that the circulation of capital (M - C ...) is the general analytical framework of Marx's theory. That is an important agreement. However, there are still many disagreements and I think one fundamental disagreement between us with respect to the circulation of capital. 1. I argue that the quantities of money-capital in Marx's theory of the circulation of capital in Volume 1 refer to (or are intended to represent) REAL, ACTUAL quantities of money-capital in circulation in the real capitalist economy. Marx's theory of the circulation of capital, from the very beginning in Volume 1, is about the real, actual capitalist economy (as a whole), not about a hypothetical model and hypothetical magnitudes. The initial M in the circulation of capital refers to real quantities of money-capital invested in means of production and labor-power in the capitalist economy as a whole. This real initial M - and its component parts, C and V - are taken as given in Marx's theory of value and surplus-value in Volume 1 (more on this below). The final dM refers to the actual surplus-value produced in the real capitalist economy as a whole. The purpose of Marx's theory of surplus-value in Volume 1 is to explain the origin and magnitude of this real dM, not to explain a hypothetical magnitude (dM*) (a different magnitude), that must later be transformed into the actual dM in Volume 3. I think this interpretation is in keeping with Marx's general philosophical method of what Ilyenkov calls "materialist dialectics" , according to which Marx's theory is based on "real" or "concrete" abstractions, rather than purely logical or mental abstractions. The concepts in Marx's theory, including the key concepts of capital and the circulation of capital, are abstracted from the real capitalist economy, and therefore refer to actual phenomena in the real capitalist economy. They are not purely theoretical concepts that have been invented out of our heads. Ilyenkov describes the circulation of capital as referring to "*a real fact* - the fact that money put in capitalist circulation, passing through all its metamorphoses, brings a return - surplus-value. Then one has to go back to establish the conditions which make this fact possible." (*The Dialectices of the Abstract and Concrete in Marx's `Capital'*, p. 282; emphasis in the orginal) This "real fact" - the production of surplus-value - is the single most important characteristic of capitalist economies. Marx's theory of surplus-value in Volume 1 is intended to explain this "real fact", i.e. the actual magnitude of surplus-value in the real capitalist economy as a whole. Marx's theory of surplus-value in Volume 1 is not intended to explain a different hypothetical magnitude of surplus-value that follows from a theoretical model. You (Gil) (and many others), on the other hand, seem to interpret the quantities of money-capital in Marx's theory of the circulation of capital in Volume 1 as only HYPOTHETICAL magnitudes. These hypothetical magnitudes are all proportional to labor-times. The initial M* is divided into C* + V*, and these two hypothetical magnitudes of money-capital are proportional to the labor-times required to produce the means of production and the means of subsistence, respectively. The final dM* is another hypothetical magnitude that is proportional to the labor-time required to produce surplus goods. If these hypothetical magnitudes are the subject of Marx's theory in Volume 1, then all these hypothetical magnitudes must later be transformed into actual (different) magnitudes in Volume 3. C* and V* must be transformed into the actual magnitudes of money-capital, C and V. And S* must be transformed into S. Gil, do I understand you correctly? 2. So, following my interpretation, that the purpose of Volume 1 is to explain the actual surplus-value (not a hypothetical surplus-value), the next question is: How is the actual surplus-value explained in Volume 1 on the basis of the assumption that the price of commodities is equal to their value? The first point to emphasize is that Marx's theory of the actual surplus-value applies to the TOTAL SURPLUS-VALUE produced in the real capitalist economy as a whole, not to the surplus-value produced by a single capital or in a single industry. The explanation of the actual total surplus-value involves the actual TOTAL PRICE of commodities produced in the real capitalist economy as a whole. Therefore, Marx's assumption in Volume 1 that the price of commodities is equal to their values applies first and foremost to the total price of commodities, not to the prices of individual commodities. Individual prices are determined later in Volume 3. Individual prices cannot be determined in Volume 1, because individual prices involve the equalization of profit rates and the distribution of surplus-value. According to Marx's logical method, the distribution of surplus-value, and hence the prices of individual commodities, can be explained only AFTER the production of surplus-value has been explained, i.e. only after the total amount of surplus-value to be distributed has been determined. Marx assumed that the actual total price of commodities is determined by the sum of two components: (1) the constant capital transferred from the means of production and (2) the money new-value produced by current labor (N = m Lc). (2) is the basic assumption of Marx's labor theory of value. The points to emphasize here are that this assumption applies to the total price of commodities and it applies most directly to the new-value portion of the total price of commodities. (The "new solution" also emphasizes that (2) is the basic assumption of Marx's labor theory of value.) Thus, algebraically: P = C + N = C + m Lc >From this basic assumption, Marx explained the actual total surplus-value as the difference between the new-value produced by workers and the wages they are paid, i.e. by the surplus labor of workers. : S = N - V = mL - nLn (where Ln = V/m) = mLs Now, the question is: how are the magnitudes of C and V themselves determined in the determination of the actual total price and the actual total surplus-value in Volume 1? I argue that C and V are TAKEN AS GIVEN. The reason why C and V are taken as given is that the purpose of the theory, as explained above, is to explain the actual total price and especially the actual total surplus-value. In order to explain the actual total price and actual total surplus-value, the inputs or determinants must be the actual C and V. The value transferred to the actual total price (the first component of the total price) is the actual C invested in the means of production , not a hypothetical C*. No matter what determines the actual C - and no matter whether this actual C is equal to the value or the price of production of the means of production. The value transferred to the actual total price is always the same - the actual constant capital invested in means of production. Similarly, the actual total surplus-value is equal to the difference between new-value produced and the actual V invested in labor-power. The actual total surplus-value is not equal to the difference betweeen the new-value produced and a hypothetical V*. Therefore, in order to explain the actual total price and the actual total surplus-value, the determinants must be the actual C and V (along with other determinants). However, according to Marx's logical method, the actual C and V CANNOT BE DETERMINED in Volume 1, because the actual C and V are identically equal to the prices of the means of production and the means of subsistence, and prices of individual commodities, including of groups of individual commodities like the means of production and the means of subsistence, are not determined by the macroeconomic theory of the total price and total surplus-value in Volume 1 (as discussed above). Therefore, since the actual C and V cannot be determined in Volume 1, they are taken as given (and explained later in Volume 3). It is true that Marx provisionally assumed in Volume 1 that the actual C and V are equal to the values of the means of production and means of subsistence, respectively. Marx made this provisional assumption in Volume 1 because, as explained above, the prices of the means of production and means of subsistence have not yet been determined by the macroeconomic theory of the total price and total surplus-value in Volume 1. The provisional microeconomic assumption that C and V are equal to the values of the means of production and means of subsistence is the only assumption that is consistent at this point (i.e. in Volume 1) with the macroeconomic labor theory of value assumed in Volume 1. However, the key point is that this provisional assumption about (or partial explanation of) the given magnitudes of C and V DOES NOT DETERMINE the magnitudes of C and V. If the magnitudes of C and V were determined by this provisional assumption, then C and V would be hypothetical magnitudes, rather than actual magnitudes, and the total price and total surplus-value derived from these hypothetical C and V would also be hypothetical magnitudes. But the purpose of Volume 1 is not to explain a hypothetical surplus-value, but rather to explain the actual surplus-value. In order to explain the actual surplus-value, C and V must be the actual C and V. And since the actual C and V cannot yet be explained in Volume 1, they must be taken as given. So that is how the actual surplus-value is explained in Volume 1 on the assumption that the prices of commodoties are equal to their values. Gil said in (7703), clarifying an earlier point in (7693): > I don't yet see how it is possible to assert M, C, V, m and L as > independent exogenously given magnitudes under the analytical conditions > established by Marx in K.I., and thus how it is possible to assert that > total prices P and aggregate surplus value S are "yielded" as dependent > magnitudes by these parameters. Specifically, so far as I can see, > given > the magnitude of M, the data required to determine individual commodity > labor values, and the assumption that all commodities exchange at their > respective values, then m, C, V, L, P, and S are already completely > determined. Gil, I hope you can now see how, within the logic of Marx's theory, taking C and V as given is consistent with Marx's assumption in Volume 1 that prices = values. Indeed, taking C and V as given is essential in order to explain the actual total surplus-value in Volume 1. I look forward to further discussion. And I hope others will join the discussion as well. Comradely, Fred
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