From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Thu Apr 05 2007 - 19:33:56 EDT
Recently I had another look at the notion of ground rent (trying to correct what I previously thought) and really Marx's more interesting discussion of production prices occurs there (I am citing from the online edition). Clearly the equalisation of the rate of profit giving rise to a "general rate of profit" in Marx's view presupposes, if not perfect competition, at least the free mobility of capital (and really also an equalisation of S/V). The conundrum is that to find production-prices, a uniform rate of profit must be assumed, while at the same time to find a uniform rate of profit, production-prices must already be assumed, a sort of tautology. Moreover, the uniform rate of profit assumes an equalisation process has already occurred. This is intrinsically a static picture, which can at best illustrate the differential realisation of surplus-values under the assumed conditions. But the more interesting problem is the dynamic one, i.e. how will the competitive process evolve over time, and how that plays out in a world market setting. In Ernest Mandel's theory on this, which I think has merit, the frontline of capital accumulation (its historical trajectory or path) is really the quest for surplus profits (extra-Mehrwert) deriving from resource or supply monopolies, or especially favourable production or distribution conditions, but this would imply at least a relative blocking of the equalisation process?! It is really quite a complex argument. Marx writes e.g.: If the composition of the capital in a given sphere of production is lower than that of the average social capital, i.e., if its variable portion, which is used for wages, is larger in its relation to the constant portion, used for the material conditions of labour, than is the case in the average social capital, then the value of its product must lie above the price of production. In other words, because such capital employs more living labour, it produces more surplus-value, and therefore more profit, assuming equal exploitation of labour, than an equally large aliquot portion of the social average capital. (...) The opposite is the case when the capital invested in a certain sphere of production is of a bigger composition than the social average capital. The value of commodities produced by it lies below their price of production, which is generally the case with products of the most developed industries. (...) And then: Prices of production arise from an equalisation of the values of commodities. After replacing the respective capital-values used up in the various spheres of production, this distributes the entire surplus-value, not in proportion to the amount produced in the individual spheres of production and thus incorporated in their commodities, but in proportion to the magnitude of advanced capitals. Only in this manner do average profit and price of production arise, whose characteristic element the former is. It is the perpetual tendency of capitals to bring about through competition this equalisation in the distribution of surplus-value produced by the total capital, and to overcome all obstacles to this equalisation. Hence it is their tendency to tolerate only such surplus-profits as arise, under all circumstances, not from the difference between the values and prices of production of commodities but rather from the difference between the general price of production governing the market and the individual prices of production differing from it; surplus-profits which obtain within a certain sphere of production, therefore, and not between two different spheres, and thus do not affect the general prices of production of the various spheres, i.e., the general rate of profit, but rather presuppose the transformation of values into prices of production and a general rate of profit. This supposition rests, however, as previously discussed, upon the constantly changing proportional distribution of the total social capital among the various spheres of production, upon the perpetual inflow and outflow of capitals, upon their transferability from one sphere to another, in short, upon their free movement between the various spheres of production, which represent so many available fields of investment for the independent components of the total social capital. The premise in this case is that no barrier, or just an accidental and temporary barrier, interferes with the competition of capitals - for instance, in a sphere of production, in which the commodity-values are higher than the prices of production, or where the surplus-value produced exceeds the average profit - to reduce the value to the price of production and thereby proportionally distribute the excess surplus-value of this sphere of production among all spheres exploited by capital. http://www.marxists.org/archive/marx/works/1894-c3/ch45.htm
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