Re: [OPE-L] Faux frais of production

From: glevy@PRATT.EDU
Date: Tue Apr 25 2006 - 22:33:27 EDT


> Following this line of argument, the faux frais are a deduction from the
> total new surplus value, in the same way that e.g. Fred Moseley describes
> the salaries of non-productive workers (in the Marxian sense) as a
> deduction from total new surplus value.

Hi Jurriaan,

Yes, that's the way I understand it.

> Peculiarly though, while these flows are treated as a deduction from
> surplus-value, they are in fact *included* in the social account for
> aggregate surplus-value (in which case, we would really have to
> distinguish between "gross" and "net" surplus value).

You could treat it in that way, I suppose.

> Marxists usually ignore the faux frais, but if in reality the so-called
> incidental expenses beyond investment in means of production grow very
> large (a magnitude to the order of perhaps? $2 trillion in the US, who
> knows), the  matter is certainly worth looking at in more detail.

Indeed. On that point we are in agreement.  Generally, I think faux frais
are important from a social accounting perspective because they are
a category of expense which is neither C nor V. By itemizing these
expenses separately, I think we have a more nuanced and realistic
accounting system. Also, I think that had those expenses been included
in C or V then we would be doing an injustice to the meaning of those
categories.

(Parenthetical remark:  I am humored and/or chagrined by the critics of
all stripes who have accused Marx of being simplistic since the more one
analyses his system, the more you can observe how nuanced and complex and
layered it is. Simplistic it is not.)

> I think a significant trend in modern official social accounting is that
> statisticians resort increasingly to mathematical models to extrapolate
> the aggregates, because this - given budget constraints - is cheaper than
> comprehensive direct surveys. That is, the estimates for aggregates may in
> good part be extrapolated from key indicator variables, i.e. a limited set
> of empirical variables statistically strongly correlated with changes in
> the main aggregates. It is quite likely that this procedure would actually
> have the statistical effect of smoothing out real economic fluctuations
> across time to some extent, precisely because the procedure involves
> extrapolating a current trend from past data. But while this means that
> observations of short-term flunctuations might actually be spurious to
> an unknown extent,  the system I think still does pick up significant
> trends within a five or ten year interval.

What would be examples of this?

In solidarity, Jerry


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