From: Andrew Brown (A.Brown@LUBS.LEEDS.AC.UK)
Date: Thu Jun 08 2006 - 17:01:30 EDT
Hi Ian, Owing to the recent ending of the HE industrial dipsute in the UK, I am faced now with a large stack of marking! So must be even briefer than usual. I look forward to discussing at geater length at a future date. Let me just state how I see the issue re. interest as 'price' of money capital. You are right to quote Marx in Vol 3 on this. But, in a way, Paul is right to say that 'Marx is being vulgar' here. The bottom line is that this is a very complex issue involving aspects from vol 1 to vol 3. In short, in my view, interest is a 'price' of money capital but this price, unlike that of labour-power, is *not* deternmined, on my understanding of Marx's theory, by the labour time required to produce the items it enables capitalists to consume. Rather it is determined by (1) the magnitude of total surplus value and (2) the struggle between industrial and financial capital (and other factions) over the distribution of this magnitude (into profit, interest, rent). I am being crude here but hope the point is clear. There is no set of commodities whose value has anything directly to do with the determination of the 'price' of money capital. There is nothing analogous the worker' commodity bundle that detemrines the value hence 'price' of labour-power [ I am aware of course of the issues surrounding this concept]. Formally the workers consumption and the capitalists consumption may seem similar but in Marx's theory they have entirely different roles. I am not of course making an argument here, nor therefore a criticism of you. I am simply stating my understanding of Marx's theory, without having time to argue for it. I wrote: > There is no general law of > 'interest', nor even of 'profit', rather there is a law of surplus value. Interest, rent and profit > fight over the available surplus value magnitude. No doubt profit and interest must be > positive otherwise capitalists starve. Perhaps then a small proportion of capitalists > consumption might be considererd a true 'input', in the same way as unproductive labour > can be treated like constant capital. But this merely sets a lower limit on the magnitude > of capitalist consumption, a lower limit of relatively small magnitude. Capitalist > consumption should not appear as an input, on this view. And you replied: But you think that some of it perhaps should? Is this a difference between "subsistence" capitalist consumption and "luxury" capitalist consumption, which echoes Sraffa's distinctions applied to the real wage? In simple reproduction, in which the real-wage and capitalist consumption is fixed, there isn't a need for such a distinction. I now reply: Yes one could see *formal* similarity with the workers' (so-called) subsistence vs non-susbsistance distinction. However, I would agree with you that in the case of workers then the actual workers' consumption is all we need consider - the distinction I think a bogus one in this case because there is a moral and historical element and in fact the value of labour power is ultimately decided by the entire real process of struggle in the economy. I deny, however, any *real* symmetry of this case to that of capitalists. Fixing capitalist consumption does not remove the need for the distinction between its substistence and non-subsitence elements (in *Marx's* theory, as I understand it). The distinction arises not from fixity vs non-fixity (indeterminacy) but from being necessary or unecessary for capitalist reproduction (Shaikh's 'circuit of capital'). I wrote: > I say (with Shaikh and Paul C... and perhaps even Sraffa... ) that capitalist consupmtion goods > will have, on average, close to the economy average OCC hence aggregate equalities will > approximately hold despite it not being input. You say it is an input hence aggregate equalities > hold exactly. And you replied: Here I agree with Fred. On the assumption of equal exchange there is quantitative identity, not approximation, and this is crucial to the theoretical integrity of Marx's theory of value. I now respond: Actually, you agree with Fred on a more broad issue. The key for you and Fred and many others (including Ajit I think) is that you think that *if* total profit a different magnitude from total surplus value, *then* as Fred put it in a recent post, the latter total does not 'solely determine' the former total. More generally this means that you, Fred, Ajit and many others believe that if a given quantity is the sole determinant of some other quantity then there must be a one-to-one mapping between the two quantities. I think this is wrong!...and therein lies the crux of the value debate in my view. I hope to perasuade you to debate this at some future point but won't state my case now. Sorry to be cryptic but marking beckons.. Many thanks Andy ________________________________ From: OPE-L on behalf of Ian Wright Sent: Thu 08/06/2006 18:38 To: OPE-L@SUS.CSUCHICO.EDU Subject: Re: [OPE-L] workers' consumption and capitalists' consumption Hi Andy Apologies for delayed response. My response is unfortunately also a little rushed. > One general issue: I'd suggest that there needs to be a discussion in your paper of the > relationship between accounting procedures/propositions and theoretical propositions. It > is the ommission of such a discussion that is responsible I think for the *appearance* > that you are offering a very non-Marxian theory of profit (as pointd out by Ajit), which in a > sense your paper revolves around. No doubt this is not intended, but without actually > discussing the general issue regarding how accounting and theory propositions relate it > is impossible to debate this key issue - so impossible for you to avoid giving this > non-Marxian impression to the reader. I must have a presentational problem. So if you get the time I would be interested in any suggestions you might have that would help avoid misunderstandings. > Specifically: Marx, (imperfectly) followed by the Sraffian system, does indeed exclude > capitalists' consumption from the inputs. You are essentially arguing that it should not be > so excluded. I am willing to accept this conclusion -- based on textual evidence and analysis. But until such a demonstration is provided I think it is an open question, with many subtleties perhaps not yet appreciated. For example, it is all too easy to take a common-sense productivist metaphor, taken from Marx's images of factory production, and apply it to the modern concept of vertical integration. > One thing your paper does is confirm from a different angle the key point > (stated by Shaikh 1984 and no doubt by others) that it is this exclusion of capitalists' > consumption from inputs (Shaik's 'circuit of capital') that is responsible for the issues > arising in the transformation problem. That is a very insightful remark, and a connection I had not made until recently. You are right: there is an important common element here. > But you seem to argue that capitalists' > consumption (funded by profit) should be included as an input because profit is a cost of > money-capital lending. This is anathema to my understanding of Marxian theory, it is a > 'surface appearance' from my perspective. I think we will be able to work through these issues. > Crudely put, profit is surplus labour in money > form (surplus value) from which various deductions have been made, including the > deduction of interest (and rent). I think this depends whether we are talking about an undistributed surplus or a distributed surplus. In simple reproduction, there isn't any surplus labour "left over". The deductions balance the productions, so to speak. > Interest and profit need not have the same magnitude. > For a given amount of surplus value, the amount of interest is crudely down to the relative > power of finance capital as opposed to industrial capital - finance capital siphons off > some of the surplus value generated by industrial capital. OK. > There is no general law of > 'interest', nor even of 'profit', rather there is a law of surplus value. Interest, rent and profit > fight over the available surplus value magnitude. No doubt profit and interest must be > positive otherwise capitalists starve. Perhaps then a small proportion of capitalists > consumption might be considererd a true 'input', in the same way as unproductive labour > can be treated like constant capital. But this merely sets a lower limit on the magnitude > of capitalist consumption, a lower limit of relatively small magnitude. Capitalist > consumption should not appear as an input, on this view. But you think that some of it perhaps should? Is this a difference between "subsistence" capitalist consumption and "luxury" capitalist consumption, which echoes Sraffa's distinctions applied to the real wage? In simple reproduction, in which the real-wage and capitalist consumption is fixed, there isn't a need for such a distinction. > To compare our respective approaches to the TP: we agree that capitalist consumption is > the key. Agreed. > I say (with Shaikh and Paul C... and perhaps even Sraffa... ) that capitalist consupmtion goods > will have, on average, close to the economy average OCC hence aggregate equalities will > approximately hold despite it not being input. You say it is an input hence aggregate equalities > hold exactly. Here I agree with Fred. On the assumption of equal exchange there is quantitative identity, not approximation, and this is crucial to the theoretical integrity of Marx's theory of value. I am convinced by Rubin's account of the relationship between Ricardo and Marx's economics, and his explanation that the Ricardian school dissolved due to its theoretical (not empirical) approximations. One of Marx's many great leaps forward over Ricardo's economics was to adhere to the conservation of labour-time in price, which at a given stage of theoretical abstraction, is strict. Best wishes, -Ian.
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