From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Tue Jan 24 2006 - 12:25:47 EST
Something I was thinking about.... Any comment, however critical, welcome. Yours, Rakesh If the profit rate did not equalize, the value of a commodity would be represented as or (more accurately resolved into) c+v+s, what Marx calls simple price; however given the tendency towards the equalization of the profit rate, a tendency which grows stronger with the development of capitalist markets and the mobility of labour, the value of a commodity is now represented as m[(1+r)(c+v)], m as the monetary expression of labor time allowing for the translation between price of production and labor magnitudes. As Fred has argued, m is given throughout Marx's theory, and depends in the contemporary economy on the quantity of fiat money. At any rate, such is the value of the capitalist commodity, the socially necessary abstract labor time it must represent for it to be produced. In a capitalist society, value is price of production is supply price. Value is not the actual labor time required to produce an object; it is the abstract labor time, the aliquot of homogeneous social labor time, that an object must represent for it to be produced. In other words, value is the supply price of a commodity. It may seem that in denying that value is given directly by the socially average labor time actually expended in the production of a commodity, I have dirempted value from the conditions of production and from the materialist outlook in general. But this is not true. The overwhelmingly most important factor in changing the social labor time a commodity represents is change in (indirect and direct) labor productivity in that commodity's sector. The conditions of production are overwhelmingly important but in a mediated way. At any rate, there is no actual transformation from value to price of production. Commodities don't possess value or simple price before they acquire a price of production in and through competition. What Marx means by value as simple price is counterfactual; simple price is the value a commodity would have had had there been no competitive equalization of the profit rate, but the value a capitalist commodity does in fact have as a result of competition is its price of production. Because a commodity never has value, qua simple price, there is never any transformation from value as simple price to value as price of production. There is no transformation problem. One cannot transform a counterfactual situtation into an actualized one. We can however speak of a transformation but a counterfactual one, from prices of production to simple prices had there been no capital mobility. That Marx begins in the relevant third volume chapter with the counterfactual situation has given the false impression that he is charting in that chapter an actual transformation from one real set of affairs to another. As I have argued here, what one really has to do is an inverse transformation, from price magnitudes to labor values. Again the value of a capitalist commodity is m[(1+r)(c+v)], with m giving us the expression of price of production in labor value. That is the social labor time that a capitalist commodity represents. The commodity exchanges as an objectification of abstract labor time (Marx has made that clear from the beginning of Capital, vol 1) but the determination of its magnitude is a complex social process that goes on behind everyone's back. No more does an individual confront sense data with private and idiosyncratic cognitive equipment (as Kant demonsrated in his transcendental deduction) than does a producer alienate a commodity as a private object. Cognition and commodity exchange are thoroughly social processes. Yours, Rakesh
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