From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Fri Oct 04 2002 - 11:59:51 EDT
This is a response to Gil's (7730). Thanks Gil for your extensive post.
1. I have argued in several published papers and in recent posts that
Volume 1 is about the determination of the total surplus-value produced in
the capitalist economy as a whole. As Jerry has argued in a recent post,
Marx's theory of surplus-value is about the class relation between the
capitalist class as a whole and the working class as a whole. In other
words, it is about the total surplus-value produced by the working class
as a whole. It is not about the surplus-value produced by the individual
workers or individual groups of workers. (Further textual evidence to
support this interpretation that Volume 1 is about the total surplus-value
is presented in a recent working paper entitled "Money and
Totality: Marx's Logic in Volume 1 of Capital", which is attached to this
post.)
Gil said in (7726) on this point:
> Although I don't entirely disagree with this representation, I think it
> mischaracterizes what Marx is trying to do in Volume I. As he makes
> clear at the beginning and conclusion of Chapter 5, and in the middle of
> Ch. 7, Marx is primarily concerned to account for the *existence* of
> surplus value, rather than its "TOTAL" magnitude. I agree with Jerry on
> this point.
Gil, are you suggesting that Marx demonstrated the "existence of
surplus-value" without a quantitative theory of the magnitude of
surplus-value? If so, please explain how. If not (i.e. if Marx's theory
of surplus-value does provide a quantitative theory of surplus-value),
then to what level of aggregation do you think Marx's theory of
surplus-value applies, if not the total surplus-value in the capitalist
economy as a whole?
I will discuss Chapters 5 and 7 below.
Jerry said (in 7726) that he agrees with me "for the most part" that
Marx's theory of surplus-value in Volume 1 is about the total
surplus-value. Our disagreement if over whether this quantitative aspect
of Marx's theory is the primary question or the secondary question in
Volume 1 (and now there doesn't seem to be much disagreement on this point
either). But we both agree (I think; Jerry please clarify if
necessary) that the quantitative aspect of Marx's theory of surplus-value
is about the total surplus-value.
Volume 3 is then about the distribution of the total surplus-value that is
determined in Volume 1, i.e. the division of the total surplus-value into
individual parts (equal rates of profit, merchant profit, interest, and
rent). Marx's theory of the distribution of surplus-value in Volume 3 is
based on the explicit premise that the total amount of surplus-value has
already been determined by the theory of the production of surplus-value
in Volume 1. Most relevant to the current discussion, Marx's theory of
prices of production in Part 2 of Volume 3 is based on the explicit
premise that the general rate of profit, which determines (in part) prices
of production, is equal to the ratio of the total surplus-value determined
in Volume 1 to the total capital invested (which is taken as given). (I
have presented extensive textual evidence in two papers of this explicit
premise in Volume 3 of the prior determination of the total
surplus-value. These papers are available on my website
(www.mtholyoke.edu/~fmoseley): "Hostile Brothers: Marx's Theory of the
Distribution of Surplus-value in Volume 3 of Capital" and "The
Development of Marx's Theory of the Distribution of Surplus-value in the
Manuscript of 1861-63".)
2. According to this overall logical method of first the production of
the total surplus-value and then the distribution of surplus-value, the
prices of individual commodities CANNOT BE DETERMINED in Volume
1. Because the prices of individual commodities are determined (in
part) by the distribution of surplus-value (and in particular by the
equalization of profit rates across industries), and the distribution of
surplus-value cannot be explained in Volume 1. First the production of
surplus-value must be explained; i.e. first the total amount of
surplus-value must be determined.
Marx's discussions of his theory of value in Volume 1 and his assumption
that prices equal values often sound like a theory of individual prices
because Marx uses individual commodities in Volume 1 to represent the
total social capital, and the prices of individual commodities to
represent the total price of all commodities together. For example, in
Chapter 7, where Marx presents his basic theory of surplus-value, Marx
used 20 lbs. of yarn to illustrate this theory. But Marx's theory of
surplus-value in Chapter 7 (and elsewhere) is not about the surplus-value
contained in the price of the 20 lbs. of yarn. Because the prices of
individual commodities have not yet been determined in Volume
1. Individual commodities involve the distribution of surplus-value, and
first the production of surplus-value must be explained. Instead, the
yarn represents the total commodity product produced by the total social
capital; and the price of the yarn represents the total price of the total
commodity product; and the surplus-value contained in the yarn represents
the total surplus-value produced in the capitalist economy as a
whole. The capital in the cotton yarn industry represents the total
social capital and the single solitary yarn spinner represents the working
class as a whole.
The theory of surplus-value presented in Chapter 7 does not just apply to
this single yarn spinner. The same theory - that the magnitude of
surplus-value is proportional to the magnitude of surplus labor (i.e. to
the difference between total labor and necessary labor) - applies to each
and every worker, and hence to the working class as a whole. Therefore,
this theory applies to the total surplus-value produced by the working
class as a whole - the magnitude of the total surplus-value is
proportional to the total surplus labor of the working class as a whole.
Felton Shortall (*The Incomplete Marx*, 1994) has emphasized this
representative function of the individual capitals discussed in Volume
1. Shortall argues that, in Volume 1:
"the individual capital was only considered insofar as it was stripped of
all particularity. It stood as the immediate representative of all
capitals, as the abstract generality of capital as such. Consequently,
the individual capital could be taken as a simple microcosm of the
totality of social capital, its direct and immediate individual
embodiment." (p. 452)
Therefore, it also follows from this interpretation that when Marx states
in Volume 1 that the price of an individual commodity is equal to its
value, he is not really talking about the determination of the price of a
real individual commodity, because the prices of individual commodities
cannot be determined in Volume 1; individual prices can be determined only
in Volume 3, along with the distribution of surplus-value. What Marx
really means (within this overall methodological context) is that the
total price of the total commodity product is equal to its value. The
price of the individual commodity in Volume 1 represents the total price
of all commodities together.
3. Gil emphasizes Marx's statements at the end of Chapter 5 - that
surplus-value must be explained on the basis of the assumption that
commodities exchange at their values and the exchange of equivalents. But
I think Marx's argument in Chapter 5 as a whole supports my interpretation
that Marx's theory of surplus-value in Volume 1 is about the total
surplus-value produced in the capitalist economy as a whole.
Marx's main argument in Chapter 5 is that surplus-value cannot be
explained on the basis of exchange alone. Marx first assumes that
exchange is the exchange of equivalents, and the conclusion of no
surplus-value obviously follows. If equivalent values are exchanged, then
neither party to the exchange gains a surplus-value ("where there is
equality, there can be no gain").
Marx argued further (pp. 263-66) that, even if it is assumed that exchange
is the exchange of non-equivalent values, one still cannot explain
surplus-value on the basis of exchange alone. If there is an exchange of
non-equivalent values (e.g. due to cheating), then one party to the
exchange will indeed gain a surplus-value as a result of the exchange, but
the other party will necessarily lose an equal amount. The net gain for
both parties is zero. Therefore, for both parties together, exchange
alone cannot be a source of surplus-value.
Marx then extended this argument to the total surplus-value produced by
the capitalist class as a whole: although one could explain the
surplus-value of individual capitals by cheating, one cannot explain the
surplus-value of the capitalist class as a whole by cheating. Marx
concluded: "The CAPITALIST CLASS OF A COUNTRY, TAKEN AS A WHOLE, cannot
defraud itself." (p. 266; emphasis added) This argument is clear evidence
that Marx's theory of surplus-value is intended to explain the total
surplus-value of the "capitalist class as a whole", not the surplus-value
of individual capitalists only.
In an earlier draft of Chapter 5 in the Manuscript of 1861-63 (published
for the first time in English in 1988, in Vol. 30 of the International
Publishers 50-volume set of the new *Marx-Engels Collected Works*), Marx
elaborated on this point further:
"If we take all the capitalists of a country and the sum total of
purchases and sales between them in the course of a year, for example, one
capitalist may admittedly defraud the other and hence draw from
circulation more value than he threw in, but this operation would not
increase by one iota the sum total of the circulating value of the
capital. In other words, the CLASS OF CAPITALISTS TAKEN AS A WHOLE cannot
enrich itself as a class, it cannot increase its TOTAL CAPITAL, or produce
a SURPLUS-VALUE, by one capitalist's gaining what another loses. The SUM
TOTAL OF CAPITAL IN CIRCULATION cannot be increased by changes in the
distribution of its individual components between its owners. Operations
of this kind, therefore, however large a number of them one may imagine,
will not produce any increase in the sum total of value, any new or
surplus-value, or any gain on top of the TOTAL CAPITAL IN
CIRCULATION." (p. 25; emphasis added)
The same conclusion applies to the theoretically more important case in
which there is an exchange of non-equivalents due to prices equal to
prices of production, rather than to values. What one capitalist gains by
this redistribution of surplus-value, another capitalist loses, and the
total surplus-value remains the same. That is why Marx's theory first
explains in Volume 1 the determination of the total amount of
surplus-value, and then explains in Volume 3 the distribution of
surplus-value, including the determination of individual prices of
production.
In the next two pages of Chapter 5 (pp. 266-67), there is an additional
argument that further supports my interpretation. The argument concerns
merchant profit and interest. If exchange does not produce surplus-value,
then it appears that merchant profit and interest are impossible, because
merchants and bankers function solely in the sphere of exchange or
circulation. Marx promises to explain this apparent contradiction
later. As we have seen, according to Marx's logical method, merchant
profit and interest are explained in volume 3 as individual parts of the
total surplus-value produced in production. Before these individual parts
of surplus-value can be explained, the total amount of surplus-value must
be explained, and that is the purpose of Volume 1. Merchant profit and
interest cannot be explained in Volume 1 for the same reason why
individual prices cannot be determined in Volume 1 - the total amount of
surplus-value has to be explained before the division of this total amount
into individual parts.
And of course Chapter 5 comes after Chapter 4, the key chapter in which
Marx introduces the overall analytical framework for his theory, the
"general formula for capital", M - C - (M+dM), or the investment of a
given amount of money in order to extract more money, or
surplus-value. This characteristic feature of capital of course applies
to all capitals together. It is not true just for individual capitals,
nor just for capitals in some industries. It is true for all capitals
together. It is what makes capital capital. The "general" formula is
just that - a "general" formula that applies to all capitals together, and
thus to the total social capital.
Therefore, the main question of Marx's theory of capital is the origin and
magnitude of the increment of money that is the characteristic feature of
all capitals together. The magnitude of surplus-value that Marx's theory
is intended to explain is the total surplus-value produced by the total
social capital.
The general formula for capital is illustrated in Chapter 4 by an
individual capital, a capital in the cotton industry. But this
characteristic feature of surplus-value applies, not just to this single
capital in the cotton industry, but rather to all capitals together, and
hence to the total social capital. The individual capital in the cotton
industry represents what all capitals have in common - the production of
surplus-value - and thus represents the total social capital. Marx stated
clearly that the circuit of an individual capital represents the circuit
of the total capital in the following passage from Volume 2:
"The capitalist casts less value into circulation in the form of money
than he draws out of it, because he casts in more value in the form of
commodities that he has extracted in the form of commodities... WHAT IS
TRUE FOR THE INDIVIDUAL CAPITALIST, IS TRUE ALSO FOR THE CAPITALIST
CLASS... [T]HE CAPITALIST SIMPLY PERSONIFIES INDUSTRIAL CAPITAL
... . (C.II: pp. 196-97; emphasis added)
Gil amphasizes the last paragraph of Chapter 5, which reads in part:
"The transformation of money into capital has to be developed on the basis
of the immanent laws of the exchange of commodities, in such a way that
the starting-point is the exchange of equivalents.(24) The money-owner
... must buy his commodities at their value, sell them at their value, and
yet at the end of the process withdraw more value from circulation than he
threw into it in the beginning... These are the conditions of the
problem." (pp. 268-69)
We can see from the forgoing that the "capital" in the first sentence
represents the total social capital ("the sum total of capital in
circulation"), and that the "money-owner" represents the capitalist class
as a whole ("the capitalist personifies industrial capital"). And the
surplus-value that Marx is trying to explain is the total surplus-value of
the capitalist class as a whole, not the surplus-value of this single
capitalist (which could be explained by cheating or the redistribution of
surplus-value). The condition of the problem is that this total
surplus-value must be explained on the basis of the assumption that the
total price of all commodities together must equal their value.
Footnote (24) to the first sentence above begins as follows:
"The reader will see from the foregoing discussion that the meaning of
this statement is only as follows: the formation of capital must be
possible even though the price and the value of a commodity be the same,
for it cannot be explained by any divergence between price and value."
Again, we can see from the above that the "capital" in this sentence is
the total social capital; it is not individual capitals. For, as Marx
argued, the surplus-value of individual capitals could indeed be explained
by prices not equal to value. But the total surplus-value of the total
capital cannot be explained by price not equal to value. Individual
prices not equal to value does not produce "any gain on top of the total
capital in circulation." "The capitalist class as a whole cannot defraud
itself."
We learn later in Volume 1 that Marx's emphasis on the exchange of
equivalents is mainly concerned with the exchange between the capitalists'
money-capital and the workers' labor-power. Marx wanted to explain
surplus-value, not on the basis of "cheating" workers, in the sense that
workers are paid less than the value of their labor-power. Rather, he
wanted to explain surplus-value on the basis of the assumption that
workers are paid the full value of their labor-power. Marx's explanation
of surplus-value is of course that, after workers are paid the full value
of their labor-power, they produce for capitalists more value than the
value of their labor-power.
4. The main issue between Gil and me in the current discussion is the
determination of the "inputs" of constant capital and variable capital. I
argue that these inputs are taken as given, as the actual quantities of
money-capital invested in means of production and labor-power in the first
phase of the circulation of capital. Gil argues that C and V are instead
determined by the values of the means of production and means of
subsistence, respectively.
There are two main reasons why I argue that the actual C and V are and
must be taken as given in Marx's theory. One, because the total
surplus-value that Marx's theory is intended to explain in Volume 1 is the
ACTUAL total surplus-value, not a hypothetical total surplus-value which
is equal to the labor-values of the means of production and means of
subsistence. The explanation of the actual total surplus-value must be in
terms of the ACTUAL capital costs - the actual C and V - and cannot be in
terms of hypothetical C and V equal to the values of the means of
production and means of subsistence.
Secondly, according to Marx's logical method as discussed above, the
actual C and V cannot be explained in Volume 1, because the actual C and V
are equal to the prices of production of the means of production and means
of subsistence, and the prices of production of individual commodities (or
groups of commodities) cannot be determined in Volume 1.
Therefore, in order to explain the actual surplus-value, the actual C and
V must be taken as given, because the actual C and V cannot yet be
determined.
If, instead, hypothetical C and V were determined by the values of the
means of production and means of subsistence, as you suggest, then the
surplus-value determined would also be hypothetical, and not the actual,
total surplus-value that Marx's theory is intended to explain.
So, Gil, when you say that taking C and V as given must be consistent with
the determination of C and V by the values of the means of production and
means of subsistence, this is impossible within the context of Marx's
overall logical method. Within Marx's theory, C and V must be taken as
given, as the actual capital costs, in order to explain the actual
surplus-value. Since the C and V that are taken as given are the actual
capital costs, C and V cannot (in general) be determined by the values of
the means of production and means of subsistence.
These are two different methods of determination of C and V. They cannot
(in general) be consistent with one another. EITHER C and V are taken as
given, OR they are determined by the values of the means of production and
means of subsistence. And I argue that, in Marx's theory of
surplus-value, C and V must be taken as given, because the aim of the
theory is to explain the actual, total surplus-value, and this explanation
must be in terms of the actual C and V, not in terms of hypothetical C and
V.
Gil, I look forward to your response and to continued discussion.
Comradely,
Fred
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