From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Thu May 25 2006 - 12:33:59 EDT
Hi Fred, you write: >A few comments: > >1. Lexis is right that Marx's main goal was to explain exploitation, and >to explain exploitation as a class phenomenon; i.e. the main question of >Marx's theory is the determination of the total surplus-value produced by >the working class as a whole for the capitalist class as a whole, and the >rate of exploitation for the working class as a whole. > >Lexis is also right that Marx's logical method was to use these macro >variables (the total surplus-value and the class rate of exploitation) >that are determined in Volume 1 to explain the general rate of profit and >the micro variables of prices of production in Volume 3. > >In other words, Lexis got the "macro" part of Marx's method right. >(Rakesh, why do you say that Lexis seems "more macro" than me?) I think to refer to (as you do here) TOTAL surplus value is to imply that there is surplus value at the level of the firms out of which the total surplus value is composed. Which in turn implies that the OCC and s/v can be defined for each individual firm. I take Lexis to be denying this, this implication of your formulation. In Karl Marx, Our Contemporary the analytical philosopher Keith Graham notes: "The descriptions most pertinent for understanding the actions of collectives are often different from those which apply to the actions of their constituent individuals." While an individual firm can have performed some quanta of the total valid social labor time, it cannot have produced surplus value. Only the total social capital, as itself a concrete individual in terms of which alone are the OCC and s/v defined, yields surplus value. The individual firm does not produce surplus value but receives some portion of it in the form of profit. Marx's crucial distinction between surplus value and profit is not only one of essence and appearance but one of levels of abstraction, macro and micro. Because of this denial that surplus value exists at any other than macro level, Lexis' interpretation (in King's summary) seems more macro more than yours. >Therefore, King and the usual Sraffian interpretation of Marx's theory are >wrong. It is possible to determine the macro total surplus-value before >the micro prices, and then to use the total surplus-value to determine the >rate of profit and micro prices. I think Lexis' point is not only that total surplus value can be determined before micro prices but that total surplus value is not defined as the sum of the quantities of surplus value produced at individual firms. >Who is Wilhelm Lexis? A late 19th century statistician? See Engels comments on him in intro to third volume. The respect is perhaps too grudging! >Furthermore, the alternative Sraffian method of taking the physical >quantities of inputs and outputs as the basic givens, and using these >physical quantities to simultaneously determine the rate of profit and >individual prices is EXTREMELY PROBLEMATIC: Yes I find interesting the delineation of assumptions required for the neo Ricardian equations to be solvable even after distribution has been settled. Yours, Rakesh >On Fri, 19 May 2006, Rakesh Bhandari wrote: > >> Fred, I found this description of Lexis' interpretation on the web. >> Don't know whether it's an accurate summary of Lexis. But how does >> the idea below relate to your interpretation. It seems more macro >> than yours? There is a movement from an irreducibly macro level to >> the micro level. Seems intriguing to me. >> >> Rakesh >> >> from http://william-king.www.drexel.edu/top/prin/txt/marx/marx9.html >> >> Lexis' idea is that the concepts of surplus-value and rate of >> exploitation be applied to the working class as a whole. There is >> then no difference in the organic composition of capital to worry >> about -- the organic composition of capital to use in the computation >> is the composition for the entire capitalist economic system. That >> determines the rate of profit, which then determines the "values in > > exchange." > > >Hi Rakesh, > >Thanks for this interesting link. > > >Like Bortkiewicz?! >What did he write on Marx? >And who is "William King" that is writing about Lexis? > > > > >2. But then King goes wrong, and in the usual direction, and argues that >it is not possible to do what Marx wanted to do - derive micro prices from >the macro total surplus-value, because the macro total surplus-value also >depends on the micro prices of the wage goods. Therefore, the macro total >surplus-value and the micro prices have to be determined simultaneously, >not sequentially as Marx attempted. It is not clear whether or not this >is also Lexis' view. This is pretty much the standard view of Marx's >theory these days, as you know, although some would deny that Marx even >attempted to determine the macro variables prior to the micro variables. > > >3. But King is mistaken. It is not necessary to determine the macro >surplus-value and the micro prices simultaneously. > >The analytical framework of Marx's theory is the circulation of capital: > > M - C P C' - M' M' = M + dM > >I argue that, in Marx's theory of the total surplus-value, the initial M >is TAKEN AS GIVEN, as the quantities of money capital advanced to purchase >means of production and labor-power in the first phase of the circulation >of capital, prior to production. (This initial M that is taken as given >is eventually explained at a later stage of the theory; see below). > >This initial M consists of two components, constant capital and variable >capital; i.e. M = C + V. These two components of the initial M, that are >taken as given, become determinants of the total price (P) and the total >surplus-value (S), along with the total current labor of the working class >(Lc) and the MELT (m), as follows: > > P = C + N = C + m Lc > > S = N - V = m Lc - m Ln (where Ln = V / m) > > = m (Ls) > >Then in Volume 3, the total surplus-value is used to determine the general >rate of profit and prices of production, as follows. > > R = S / (C + V) > > PPi = (Ci + Vi) (1 + R) > > >The initial C and V, that are taken as given to begin with, are equal to >the prices of production of the means of production and means of >subsistence. After prices of production have been explained in Volume 3, >then the initial C and V can also be explained. This method of first >taking the initial C and V as given, and then explaining them later, on >the basis of previously derived results, could be described in Hegelian >terms as "posit the presuppositions". > > > >4. It is reasonable and legitimate to take the initial C and V as given, >for the following reasons: > >a. The initial C and V have already been advanced, prior to production, >and therefore already exists, prior to production. > >b. The initial C and V are in principle observable, as equal to the >long-run average prices of the means of production and means of >subsistence. > >c. The above equations are valid, no matter what determines C and V. No >matter what determines C, P = C + mLc. And no matter what determines V, >S = mLc - V. C and V do not have to be determined at this stage of the >theory, but can be determined later. > >d. The total surplus-value is explained by this method, the actual total >surplus-value in the real capitalist economy, and that is the main purpose >of the theory (not to explain micro prices). > >e. C and V are also eventually explained, after prices of production are >determined. > > >a. It assumes that means of production and labor-power enter capitalist >production as mere physical quantities without prices, rather than as >commodities with already existing prices. > >b. It assumes that all industries have exactly the same turnover period. > >And it assumes that, at the beginning of the identical period, all >industries start out with physical inputs, then the physical inputs move >through the production process together, and then all the outputs are >completed at the same time, and finally (and most importantly) all outputs >are SOLD AT THE SAME TIME. (Sraffa called this method the "annual >harvest".) This assumption is not a simplifying assumption that could be >later relaxed, but is a necessary assumption that is required by the >method of simultaneous determination. If prices are determined >simultaneously, then they must be sold at the same time. Sraffa's >question is: how can exchange of all goods take place at the end of the >period (after the "harvest"), so that the initial physical quantities are >exactly reproduced, and the same processes can start all over again the >next period. > >c. It assumes that the partially used elements of fixed capital (used >machines, buildings, etc.) are "joint products", that are treated as if >they are bought and sold at the end of every period, along with the >regular outputs. > >d. It provides no theory of money. > >I could go on, but that is enough for now. > > >Rakesh, I hope you are still intrigued. Any further thoughts? > >Comradely, >Fred
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