From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Tue Oct 02 2007 - 18:37:52 EDT
Hi Paul, One more. I still think my interpretation is correct, and therefore I reject the Mohun-Mattick-Bullock-Grossmann-Nicolaus interpretation of this concept as false. When Marx discusses the valorisation process in cap. 1 ch. 7 section 2, he in fact makes his view on valorisation very explicit, although some of what he says is lost in the older English translations as I mentioned. Among other things, he states: "Dieser ganze Verlauf, die Verwandlung seines Geldes in Kapital, geht in der Zirkulationssphäre vor und geht nicht in ihr vor. Durch die Vermittlung der Zirkulation, weil bedingt durch den Kauf der Arbeitskraft auf dem Warenmarkt. Nicht in der Zirkulation, denn sie leitet nur den Verwertungsprozeß ein, der sich in der Produktionssphäre zuträgt." http://www.mlwerke.de/me/me23/me23_192.htm#Kap_5_2 Literally translated, "this whole course of events, the transformation of his [i.e. the capitalist's] money into capital, proceeds both within the sphere of circulation and also not within it. [On the one side] Through the mediation of circulation, because predicated on the purchase of labour-power in the commodity market. [On the other side] Not in circulation, since this only ushers in the valorisation process which happens in the sphere of production." So it is very clear from this statement in what Marx himself published that valorisation in production and realisation in circulation are separate processes. Verwertung means literally the "transformation or conversion into value". It is capital which is valorised within production. This core concept of valorisation is crucial in Marx's theory for five main reasons: (1) It describes how capital can increase in value through production, even if we presuppose the exchange of equal values in the transactions M-C and C'-M', which in fact does not occur because unequal exchange to some or other extent is the norm. (2) The valorisation process is not simply a "value-adding" process to be inferred by deducting input costs from output sales, but the augmentation of the value of capital external to exchange; the ultimate purpose of the capitalist production process is not value-creation as such, but value-creation which augments the value of capital. (3) The valorisation process occurs exclusively and only through the performance of surplus labour in production which is objectified in a surplus product existing prior to exchange. (4) The valorisation process assumes that living labour conserves capital value, and transfers it to the products, as well as adding new value to it, i.e. valorisation cannot occur unless the capital value is conserved and transferred to the new products by living labour within the production process. (5) It is precisely the dyssynchrony between valorisation and realisation of capital as separate moments which is at the very core of the dynamics of capital accumulation, given a capitalist mode of production, namely, the physical inputs used can be bought, and outputs can be sold, at above or below their value. A greater capital value is produced within production, but how this new capital value will be evaluated in the market cannot be known with certainty or exactitude in advance, i.e. more or less of that new capital value may be realised in the trading process. This ultimately explains precisely why there exists a permanent pressure to increase labour-productivity in capitalist production, leaving aside the pressures of competition. The owner of production capital generally has no control over the fluctuations and viccissitudes of the prices in markets within which he trades, mainly what he can do is economise within his production process such that the most is produced at the least cost, so that he realises the maximum of the capital value newly produced, whatever those market fluctuations and vicissitudes happen to be. In other words, more or less surplus-value can be realised through sales, and ultimately the only way there is, to ensure the maximum will be realised, is to produce as much of it as possible, with all that implies for the exploitation of human labour. Marxist economists have generally tried to prove with mathematics the synchrony of valorisation and realisation, such that values match prices in aggregate (assuming perfect competition). But really what matters in Marx's theory is precisely the dyssynchrony between them, i.e. the fact that prices may realise more than or less than the value of commodities. That is what explains the longrun developmental trajectory of the capitalist system: the quest for surplus-profits (above-average profits under conditions of imperfect competition) on the one side, and the ultimate destruction of industries that realise prices below the value of the commodities they produce on the other side. The shifts or movements in value relations and the shifts or movements in price relations, though they influence each other indirectly, occur independently from each other. Hence Marx's explicit claim that the process of price formation and the process of value formation occur independently from each other. If they coincided, the distinction between them would be completely redundant, as Sraffians claim. The Sraffians think you can explain price formation by price formation, but Marx thinks that price formation has to be explained ultimately in terms of value formation, i.e. aggregate values set boundaries for aggregate prices, at least in the long term, although at each given moment there may be only a tenuous relationship between particular values and particular prices. Jurriaan
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