From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Thu Nov 07 2002 - 10:48:34 EST
Andy, thanks for your comments. My replies below.
On Tue, 5 Nov 2002, Andrew Brown wrote:
> Many thanks for your clarifications - and also for your interest in
> my own view. To proceed it would be useful to give the context for
> my interpretation. My own take on Vol. 3 and its relation to Vol 1 is
> set out in a couple of chs of my PhD (I'd very glady send you
> these). Regarding Vol 3, I believe my view is very similar if not
> identical to Alfredo's on the transformation and Ben Fine's on the
> TRPF (though they may well disagree with me on this). Alfredo's
> exposition in his book of the TCC, OCC, VCC is a good starting
> point for this interpretation. What I do in the PhD chs is offer a
> detailed interpretation of the first 7 chs of 'Capital', vol. 1, on value
> and surplus value, which is more or less compatible, and indeed
> attempts to illuminate, the above mentioned interpretation of
> volume 3 (but I have no idea if Alfredo or Ben F. agree with my
> interpretation or not).
As I understand Alfredo's interpretation (Alfredo, please correct me if I
am wrong), the inputs of constant capital and variable capital are assumed
to be equal to the VALUES of the means of production and the means of
subsistence (the ratio between these two are his interpretation of the
OCC). Therefore, according to his interpretation, the prices of
production determined by Marx in Chapter 9 are not actual long-run
center-of-gravity prices, but are instead only the first step in the
determination of such long-run center-of-gravity prices. Subsequent steps
would involve the transformation of the inputs of constant capital and
variable capital from values into prices of production, which would
eventually determine long-run center-of-gravity prices. In the end, the
determination of these long-run center-of-gravity prices is exactly the
same as in the Sraffian interpretation (see Alfredo's equation (8.3) on
p. 98). Thus, Alfredo's interpretation is similar to the "iterative
solution" of Shaikh and others.
However, Marx said many times that his prices of production are long-run
center-of-gravity prices, essentially the same as Smith's and Ricardo's
"natural prices". I have written a paper documenting these many passages
("Marx's Concept of Prices of Production as Long-run Center-of-Gravity
Prices") available on my website (www.mtholyoke.edu/~fmoseley).
In addition, Alfredo's determination of prices of production is only a
partial distribution of surplus-value. In the subsequant transfromation
of input prices, the distribution of surplus-value will be altered
further. And, most importantly, the distribution of surplus-value will be
altered in such a way as to change the total magnitude of
surplus-value. In other words, the total profit distributed in Volume 3
will not be equal to the total surplus-value determined in Volume 1. This
result contradicts the key aspect of Marx's logical method, according to
which the distribution of surplus-value does not alter the total magnitude
of surplus-value "ever".
Therefore, I think Alfredo's - and your - interpretation of Marx's theory
of the determination of prices of production is a misinterpretation.
> The process of theory development very early on (first few chs of
> Vol 1) reveals that there is, on the one hand, labour time and, on
> the other hand, there is price. The two are not immediately
> identical qualitatively, even though the latter is the form of
> appearance of the former. On my interpretation, Vol. 1 estabilshes
> that the social relations specific to capitalism necessarily entail, or
> include, exploitation and accumulation. However, Vol 1 by no
> means establishes proportionality between the respective
> immanent and external measures of value (and surplus value),
> neither in aggregate nor as regards individual values. That is,
> proportionality between surplus labour time and the monetary
> measure of surplus value is not established (nor could it be since
> this requires a theory of pricing, which cannot be developed until
> Vol 3 -- this is true for both aggregate prices and individual prices,
> in my view).
But money and prices are derived in Chapter 1 of Volume 1, and prices are
assumed to be proportional to labor-time, which applies to the aggregate
level. The theory of surplus-value presented in Chapter 7 explains how
the PRICE of commodities produced is greater than the costs of production
(also in terms of money and prices). In the example in Chapter 7 in terms
of the average worker, surplus-value is 3 SHILLINGS, which is determined
by the product of the number of hours of surplus labor (6 hours) and the
money new-value produced per hour (0.5 shillings per hour) -
i.e. surplus-value is proportional to surplus labor.
Andy, how do you interpret the theory of surplus-value presented in
Chapter 7?
> >
> > The basic assumption of Marx's theory is that each hour of average
> > social labor produces m amount of money new-value (e.g. 0.5 shillings
> > per hour in many of Marx's examples). This is where the
> > proportionality comes in - Marx's basic assumption.
> >
>
> Does this mean that, on your interpretation, the key to Marx's view
> is this *assumption* (or could I also call it a 'hypothesis'?) of
> proportionality between the appearance form of surplus value (its
> money measure) and its substance (surplus labour time)?
> Or more precisely, the key is the assumption you state above
> which, via the structure of givens you have clarified for me in your
> previous email, leads to proportionality between the substance and
> appearance form of surplus value. Does this mean, furthermore,
> that the way to evaluate Marx's argument, on your view, is via
> 'testing' the empirical predictions (to put it crudely) that arise from
> this fundamental assumption? What I have in mind is your
> discussion with Blaug, Steedman and others in the methodology
> collection that you edited and contributed to. Is your view that all
> theories make some or other 'assumptions' which form a 'hard
> core', to use Lakatos' terminology, a hard core not directly to be
> tested but rather to be evaluated in terms of the propositions in the
> 'protective belt' (to borrow again Lakatos' terminology for the sake
> of clarity)?
>
> If so, then we do disagree on the basic level of method. But,
> recognition of this fact might be a great step forward for further
> fruitful discussion! My apologies, however, if I am way off in trying
> to grasp your view - my attempted interpretation of your view is
> certainly speculative and I look forward to finding out how close I
> am!
This is a separate issue from Marx's method of determination of the total
surplus-value in Volume 1 and Volume 3.
But, yes, your description of my understanding of the appropriate way to
evaluate the validity of Marx's theory is essentially correct. Marx's
labor theory of value and surplus labor theory of surplus-value cannot be
empirically tested directly because abstract labor is unobservable. The
way to test the theory is by means of the conclusions that are derived
from this theory: the necessity of money, conflict over the length of the
working day and over the intensity of labor, inherent technological
change, etc.
I am not sure that I would accept Lakatos' framework, but that is
secondary.
> >
> > This total surplus-value that is determined in Volume 1 is then taken
> > as given in Volume 3, and the magnitude of this total surplus-value
> > does not change as a result of the distribution of surplus-value in
> > Volume 3, as Marx stated many times.
> >
> > Andy, how is your interpretation compatible with Marx's many
> > statements on this key aspect of his logical method - that the total
> > surplus-value is taken as given in Volume 3 and does not change as a
> > result of the distribution of surplus-value in Volume 3?
> >
>
> Qualitatively, my interpretation fits exactly with these remarks.
> Quantitatively, it also fits exactly given that Marx is dealing with the
> OCC, rather than the VCC, which is a natural thing to do given
> Marx's theory that value is created in production and then gains
> appearance in exchange. At this stage, let me own up to a
> deficiency in my own knowledge: I pretty much stop after chapter 9
> of Volume 3. After this ch. I rely on secondary literature, out of
> which I prefer Fine's exposition of the TRPF. What this means is
> that I am happy and able to debate 'what Marx really meant' in Vol
> 1 and up to and including ch.9 of Vol 3. But after that I'm not
> qualified! When I get the chance I'll read the rest!
The rest of Volume 3 is very important. It shows that Marx consistently
follows his logical method of taking the total surplus-value as given, as
determined in Volume 1 (i.e. proportional to surplus labor), and that this
total surplus-value does not change as a result of the distribution of
surplus-value (as I have documented in my two papers referred to in my
last post). Your (and Alfredo's) interpretation of Part 2 contradicts
this aspect of Marx's method, both in Part 2 and in the rest of the
volume.
> >
> > Andy, I am also not sure exactly what you are arguing about what MARX
> > did in regard to these questions.
> >
> > Please clarify, which of the following are you arguing (or something
> > else?):
> >
> > 1. Marx did NOT assume proportionality between surplus-value and
> > surplus labor in Volume 1.
>
> He did assume it but only for convenience. The assumption is
> innocuous such that it can be dropped without any affect on his
> theory. What cannot be dropped is the view that there is a
> systematic relationship between labour time magnitude and price
> magnitude. Proportionality is a very simple systematic relationship
> but not the only form of systematic relationship.
Marx's conclusion that surplus-value is proportional to surplus labor is
not merely "one of convenience" that can be dropped without any effect on
the theory. This determination of surplus-value provides the basic
quantitative premise for the theory of the distribution of surplus-value
in Volume 3.
> >
> > 2. Marx did assume proportionality between surplus-value and surplus
> > labor, but -
> >
> > - two variations:
> >
> > a. Marx did not explain the causal process or mechanism that
> > establishes this proportionality in Volume 1, but he did explain this
> > causal process or mechanism after Volume 1. (If so, then where?)
> >
> > b. Marx did not explain the causal process or mechanism that
> > establishes this proportionality at all, ever, in any volume of
> > Capital.
>
> My view is neither a nor b. My view is that he established in Vol. 3
> that proportionality does obtain when working at the level of the
> OCC. But this means also that it does not obtain when working at
> the (more concrete) level of the VCC. It means, further, that there is
> a systematic but non-proportional relationship between labour time
> magnitude and price magnitude, at the level of the VCC.
Andy, how do you think Marx "established" in Volume 3 (Part 2) that the
proportionality between surplus-value and surplus labor obtains "when
working at the level of of OCC"? As I understand Alfredo's
interpretation, at the "level of the OCC" in Volume 3, surplus-value is
taken as given, as determined in Volume 1, i.e. as proportional to surplus
labor (please see Alfredo's table on p. 85). In other words, his
interpretation assumes that the proportionality betwen surplus-value and
surplus labor holds in Volume 1, and then the surplus-value thus
determined in Volume 1 is used to determined the INITIAL general rate of
profit (= S / C+V) and the INITIAL prices of production in Volume 3, at
the level of the OCC. The proportionality between surplus-value and
surplus labor is not established in Volume 3, but is rather assumed, as
determined in Volume 1.
The differences between Alfredo's interpretation and my interpretation
does not have to do with whether or not surplus-value is assumed to be
proportional to surplus labor in Volume 1; we both agree that it is and
that the surplus-value thus determined is taken as given in Volume 3, not
"established" in Volume 3.
The differences between Alfredo's interpretation and my interpretation are
instead:
1. Alfredo assumes that the inputs of constant capital and variable
capital are equal to the values of the means of production and the means
of subsistence, and I assume that these inputs are taken as given, and
later explained as equal to the prices of production of the means of
production and the means of subsistence.
2. Alfredo argues that Marx's determination of prices of production in
Part 2 is only the first step in the determination of long-run
center-of-gravity prices, and I argue that Marx's determination of prices
of production in Part 2 is the complete determination of long-run
center-of-gravity prices.
3. As a result of Alredo's interpretation, the total surplus-value
changes as a result of the distribution of surplus-value (in this case, as
a result of the equalization of profit rates), thereby contradicting this
key aspect of Marx's logical method.
But we both assume, at least as I undertand Alfredo, that the
transformation begins with the surplus-value taken as given, as determined
in Volume 1, i.e. as proportional to surplus labor.
Andy, thanks very much for the discussion, and I look forward to its
continuation.
Comradely,
Fred
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