From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Sun Oct 23 2005 - 09:44:16 EDT
On Thu, 20 Oct 2005, Paul Bullock wrote: > Fred, thank you for taking the time to write up your reply. The point I am > trying to make is that, if as you and I agree, Capital is all along > effectively dealing with a theoretical process of the appropriation of > reality through the construction of mediating categoriesm, then the notion > of the Supply of commodities at market prices possibley being equal to the > demand for them, presumably in particular departments, can only come in your > '6th' book, as a matter of 'reality', the most concrete complete sensuous > level. All the quotes you provide simply restate the assumption that the > 'realisation' problem can be explained as arising from the development of > the commodity, and then money, etc as an historical process, but that > throughout the three volumes Marx constantly reverts back to the theoretical > supposition of the absence of a realisation problem in order to explain > better a series of other fundamental relations, eg Rent and Surplus value. > He does not use the expression 'I here assume demand is = to supply' ever!! > I don't think he would or could at thius stage. > > Now I understand what you are saying, but I think the use of this particular > vocabulary implies a mortaly dangerous jump in the direction of another > level of analysis requiring different 'words' , and is thus really quite > confusing, and also quite unecessary. Paul, thanks for your reply. I am glad that we understand each other better now. It seems to be that the assumption of "no realization problem" or "circulation proceeds normally" is the same as assuming that S = D. What is the difference? Below are two passages from Chapter 10 of Volume 3, where Marx discusses supply and demand at length, in which Marx explicitly states that, in his theory of prices of production, he is assuming S = D, in order to analyze the laws of capitalism in their "pure form". Marx distinguished in this chapter (and elsewhere) between prices of production which assume S = D and actual market prices which assume S not = D. "The real inner laws of capitalist production clearly cannot be explained in terms of the interaction of DEMAND AND SUPPLY ..., since these laws are realized in their pure form only when demand and supply cease to operate, i.e. when they COINCIDE. In actual fact, demand and supply never coincide, or, if they do so, it is only by chance and not to be taken into account for scientific purposes; it should be considered as not having happened. Why then does political economy assume that they do coincide? In order to treat the phenomena it deals with in their law-like form, the form that corresponds to their concept, i.e. to consider them independently of the appearance produced by the movement of demand and supply. And, in addition, in order to discover the real tendency of their movement and define it to a certain extent." (p. 291) "IF SUPPLY AND DEMAND COINCIDE, the market price of the commodity corresponds to its price of production, i.e. its price is then governed by the inner laws of capitalist production, independent of competition, since fluctuations in supply and demand explain nothing by divergences between market prices and prices of production - divergences which are mutually compensatory, so that over certain longer periods the average market prices are equal to the prices of production. As soon as they coincide, these forces cease to have any effect, they cancel each other out, and the general law of price determination corresponds to price of production in its immediate existence and not only as an average of all price movements, and the price of production, for its part, is governed by the immanent laws of the mode of production." (pp. 477-78) And below is one other passage from Chapter 10 where Marx stated that the exchange of commodities at their value (and by extension, at their price of production) is the "law of equilibrium between commodities". What else could "equilibrium between commodities mean, other than equilibrium between S and D? "The exchange or sale of commodities at their value is the rational, natural law of equilibrium between them; this is the basis on which divergences have to be explained, not the converse; i.e. the law of equilibrium should not be derived from contemplating the divergences." (p. 289) Comradely, Fred
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