From: gerald_a_levy (gerald_a_levy@msn.com)
Date: Fri Sep 27 2002 - 18:51:10 EDT
----- Original Message ----- From: "Gil Skillman" <gskillman@wesleyan.edu> Sent: Friday, September 27, 2002 6:09 PM Subject: M-C-M' and S Pt. 1: Method Fred, many thanks for this detailed response. I like how you've broken the discussion up into steps; it should make it easier to pinpoint necessary points of disagreement. I'll address just your first point in this post. Since that point deals with questions of method and presupposition, I'll just say that my position in our discussion is not based on imposing any external "hypothetical" framework on Marx's exposition in Vol. I; I'm taking my cues from what Marx actually wrote. Of course, I might be mistaken in my reading of these cues, but any of us might equally be; that's where the benefit of this sort of discussion comes from, in my view. >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). I agree with this characterization as far as it's possible to in light of what Marx actually wrote in the chapters under discussion. On one hand, I have no problem with the suggestion that Marx is referring to "REAL, ACTUAL quantities of money-capital in circulation," but see a serious caveat, based on what Marx actually wrote, with the suggestion that Marx's theoretical argument at this stage does not involve "a hypothetical model and hypothetical magnitudes." The caveat is that *in between* his introduction of the circuit of capital M-C-M' in Chapter 4 and his definition of the "component parts" of M, C and V, in Chapter 8, Marx imposes the postulate that all commodities exchange at their respective values, even while noting at the end of Ch. 5 that [even] "average prices do not directly coincide with the values of commodities.." [p. 269]. This is, therefore, a "hypothetical model" of the actual, aggregate circuit of capital, since, by Marx's own acknowledgement, commodity prices don't typically correspond to values; and therefore the latter constitute "hypothetical magnitudes" insofar as they are representations of commodity prices. So first I must ask: do you agree that Marx introduces at least this element of "hypothetical magnitudes" in a consequently "hypothetical model" of the circuit of capital, M-C-M', *before* proceeding to the treatment of C and V in chapter 8? Second, if you agree to the first question, isn't it then *necessarily* the case that the magnitudes of C and V subsequently "taken as given" by Marx must be *consistent* with Marx's prior stipulation that all commodities exchange at their respective values? Would it be legitimate for Marx to postulate exchange at value if this were inconsistent with the magnitudes of C and V realized in a "real capitalist economy"? Third, to anticipate, do you agree that Marx understands commodity values to be determined by the labor times "socially necessary" to produce them? If so, how do you understand SNLT, and thus labor values, to be calculated? > 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. Again I agree subject to the caveat noted above: in Volume I, Marx posits the condition that the existence of dM be explained on the basis of the particular counterfactual hypothesis that all commodities exchange at their respective values; this stipulation is relaxed in Volume III, only to be replaced by the counterfactual that the rate of profit is equalized across sectors. In Volume I, therefore, the "real dM" must be consistent with the postulate of exchange at value, given Marx's specification of how commodity values are determined in a "real capitalist economy." In Volume III, the same dM must be consistent with the dictates of capitalist competition, including an equalized rate of profit (another hypothetical modelling condition, since in "real capitalist economies," this equalization is never actually achieved). Although the magnitude dM in question is the same, per your representation, the (hypothetical!) conditions under which it is analyzed differ dramatically. Therefore the consistency of asserting an identical magnitude of dM under the two dramatically different hypothetical settings must be *demonstrated*; it cannot legitimately be *assumed.* *Marx* introduced the hypothesis of exchange at value, after all, not the "real capitalist economy." Relatedly, to anticipate, the logical consistency of the assertion that under the volume III the conditions, the rate of profit corresponding to the same dM as in Volume I is determined *analytically prior* to the (hypothetical!) prices of production in Volume III must be *demonstrated*; it can't simply be *assumed.* >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. Well, the extent to which this representation is valid is open to debate--no one has actually seen, touched, smelled, heard or tasted a labor value, for example, so it sure seems like a "purely...mental abstraction" to me. But putting that aside, I would again be willing, in the context of Marx's Volume I analysis, to agree only subject to the caveat that Marx assumes that the "real" "concrete" entities called commodity prices are hypothetically proportional to the theoretical counterparts Marx calls labor values. >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. Subject to the caveat that this Volume I account is premised on, and thus must be shown to be consistent with, Marx's hypothesis that all commodities exchange at their respective values, I agree, and my position in this discussion proceeds from this premise. >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. Let me clear up any ambiguity about this: my position in our discussion is based on Marx's own representation of his analytical procedure in Volume I, adding only the legitimate stipulation that this procedure must be internally coherent. Thus, I invoke the condition that commodities exchange at their respective values *only* because *Marx* explicitly postulates that "real" commodity prices correspond to these "HYPOTHETICAL magnitudes." I didn't make up this stipulation; Marx made it. But I then ask, what does Marx's explicitly made assumption that all commodities exchange at their respective values, along with Marx's explicit argument that values are determined by SNLT, imply for the determination of C and V, given M? These stipulations, so far as I can see, *dictate* that the real values of C and V are in fact determined by production conditions and the sectoral composition of output, insofar as it is seemingly impossible otherwise to be true to Marx's postulate and theoretical claim. >From this perspective it seems that you (Fred) would prefer to ignore that Marx in fact made these analytical steps, at least insofar as they might have necessary implications for the relative and absolute magnitudes of C and V, given M. To put it another way, these implications would necessarily arise in any "real capitalist" economy in which commodities happen to exchange at their respective values, so logical coherence requires that any such implications must be acknowledged. >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. Rather, granting that C and V represent actual magnitudes, they must be shown to be consistent with Marx's assumption of exchange at value and his inference that value magnitudes are determined by SNLT. If this consistency is not established, then the possibility unavoidably arises that *either* postulating actual magnitudes of C and V is inconsistent with the purely hypothetical postulate that commodities are exchanged at their respective values, *or* that these postulates are inconsistent with Marx's assertion that value magnitudes are determined by SNLT. >Gil, do I understand you correctly? > No, but I'm looking forward to further discussion. Gil
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