From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Sun Mar 11 2007 - 09:13:29 EDT
--- Pen-L Fred Moseley <fmoseley@MTHOLYOKE.EDU> wrote: > I argue, to the contrary, that the initial > quantities of money constant > capital and variable capital are TAKEN AS GIVEN, and > the crucial point > is that the SAME QUANTITIES of constant capital and > variable capital > are taken as given in the determination of BOTH > values and prices of > production – the quantities of money capital > advanced to purchase means > of production and labor-power at the beginning of > the circulation of > capital (the M in M-C …). These given quantities of > money capital are > later explained as equal to the prices of production > of the means of > production and means of subsistence, but to begin > with they are simply > taken as given. Therefore, Marx did NOT “fail to > transform the inputs” > of constant capital and variable capital, because > these inputs are not > supposed to be transformed. > > Leaving aside the issue of interpretation for now, > why do you think > this is not a valid logical method? > > Comradely, > Fred _______________________ For a very simple reason. You say, you take "money constant and variable capital as given". So let's see what could this mean. Say a capitalist begins with an amount of money equal to 50 pounds of silver. What does he do with this 50 pounds of silver? You say he buys constant capital and variable capital with it. Let us say this capitalist is engaged in production of a commodity X. To produce this commodity X, the capitalist needs to buy commodity Y and Z as constant capital and Labor-power L. If the technology available for the production of X is not the usual neoclassical one but the Leontieff type, then these Y, Z, and L must be bought in a given proportion. So let us suppose that to produce 1 unit of X, it takes 2 units of Y and 3 units of Z with 1 unit of L. Let us suppose that the price of Y is 4 pounds of silver, the price of Z is 5 pounds of silver, and the wage per unit of L is 6 pounds of silver. Thus the capitalist will spend 29 pounds of silver to be able to buy enough constant and variable capital to produce 1 unit of X. If there is no chance of divisibility of commodites below 1 unit, then this capitalist is simply unable to productively invest the rest of his 21 pounds of silver. Even if you assume perfect divisibility, the capitalist in no way will be able to invest his full 50 pounds for constant and variable capital. So what would it mean to say that the capitalist begins with a capital in terms of money? This was only to highlight the flimsyness of such statements that capitalist start with a GIVEN money. Acually what you have to do is to start with an input output structure with KNOWN prices and wages, and then calculate your total amount of money investment, which you then call given money investment. Any way, this is not my main criticism. Let's suppose you are lucky, prices of Y, Z and L happens to be such that your capitalist could invest your so-called given 50 pounds of silver completely. So, how much is the constant capital investment? You say we add the amount of Y and Z bought by the capitalist multiplied by their respective prices. So you cannot get a money measure of contant capital without knowing the prices of the elements of the constant capital. After which you tell me that you derive the prices of Y and Z and show me that voilà! these prices are the same as I had assumed in calculating my so-called money constant capital and therefore there is no transformation problem. Then do I have to still explain that your methodology has some problem? You see, it is now well known (at least since 1966) that heterogenous capital cannot be aggregated in terms of K, or labor or money etc. prior to the knowledge of prices of those capital goods. Why do you think Foley and Dumenil only took variable capital given in terms of money and not the constant capital? Because they knew that it would be fatal to their whole argument. Cheers, ajit sinha ____________________________________________________________________________________ It's here! Your new message! Get new email alerts with the free Yahoo! Toolbar. http://tools.search.yahoo.com/toolbar/features/mail/
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