There have been many interesting and enlightening posts over the last
several days, and I have been occupied (happily) with more visiting friends.
I hope to get around soon to responding to some of these posts.
I will start with a belated response to Alan's (828), which I had lost.
Thanks very much to Jerry for promptly sending me another copy. What a
great moderator!
1. Alan argues first of all that the assumption that the value of existing
means of production is reevaluated according to current production
conditions contradicts Marx's theory of value because, in the case of lower
productivity, it implies that new-value is produced by something other than
living labor - simply by the reevaluation of existing means of production.
2. Alan argues further, using a one-commodity corn model, that if
productivity were so low that there were no net product, then simultaneous
determination of inputs and outputs implies that the value of the corn would
be infinite, and that even lower productivity would imply that the value of
the corn would be negative.
My response to these arguments are the following:
1. REEVALUATION OF EXISTING MEANS OF PRODUCTION CONTRADICTS MARX'S CONCEPT
OF NEW-VALUE
a. The first argument does not depend on whether it is assumed that the
value of means of production is determined by the current most advanced
technique or the current average technique, which we have discussed in
previous posts. All that is required for the above argument is to assume
that the value of the existing means of production CHANGES as a result ot
technological change (which I think Marx clearly did). Either of the two
above assumptions implies such a change in the value of the existing means
of production.
b. This argument also does not depend on whether it is assumed that the
value of the means of production are determined at the BEGINNING of the
current period (as Andrew does; see post 868) or at the END of the current
period (as I do). In either one of these cases, the value of the means of
production CHANGES as a result of technological change, and thus are targets
of this criticism. The only difference is that, according to my
interpretation, the value of the means of production changes in the current
period, and, according to Andrew's interpretation, the value of the means of
production changes in the next period. The only way that the value of the
means of production DOES NOT CHANGE as a result of technological change is
if the value of the means of production are determined by HISTORICAL costs.
c. Whatever the contradictory implications of assuming that the value of
existing means of production is reevaluated according to current production
conditions, I think this was this was clearly Marx's assumption, as
evidenced by the passages I have presented. (Andrew agrees, right?)
Therefore, if there is a logical contradiction in this assumption, then Marx
was guilty of this logical contradiction and to make a different assusmption
would be a significant alteration in Marx's theory. Which of course would
be all right, if necessary (which it probably will be at times, perhaps many
times, but I don't think it is in this case). I just want to be clear on
what we are doing.
d. However, and most importantly, I DO NOT THINK ALAN'S CRITICISM IS VALID.
I do not think that Marx's assumption leads to a contradiction regarding
new-value. The increased value of existing means of production is not
really new value in the sense of being a source of surplus-value. Although
the value of the existing means of production increases, the current value
of the means of production is still a component both of the cost and of the
price of the commodities produced. Therefore, this component of the price
cannot be a source of surplus-value. The means of production still can only
transfer to the product the value than they themselves possess, and no more.
This was Marx's distinction between transferred value and new value, and
this distinction remains true even in the case of an increase in the value
of the existing. means of production.
2. SIMULTANEOUS VALUATION OF INPUTS AND OUTPUTS IMPLIES INFINITE VALUE
Alan's argument here assumes that values or prices are derived from given
technical conditions of production, as in the neo-Ricardian interpretation
of Marx's theory. But in my previous work (1993 paper on transformation
paper), I have argued against this standard interpretation of Marx's theory.
This is a very big subject, which I cannot hope to do justice to here. But
the point most relevant to Alan's argument is that, according to Marx's
theory, ALTHOUGH THE VALUE OF THE MEANS OF PRODUCTION ARE DETERMINED AT THE
TIME OF THE SALE OF THE OUTPUT, THIS DOES NOT IMPLY THAT THE VALUES OF
INPUTS AND OUTPUTS ARE DETERMINED BY SIMULTANEOUS EQUATIONS BASED ON THE
TECHNICAL CONDITIONS OF PRODUCTION.
According to the interpretation I have presented, the price of production
for a given commodity is determined according to the following equation:
P = ( C + V ) + r M
where C and V are the flows of constant capital and variable capital, M is
the stock of invested capital, and r is the rate or profit. In this
determination of prices of production, r is taken as given as determined by
the prior analysis of capital in general in Volume 1 of Capital; and C, V,
and M are TAKEN AS GIVEN as sums of money used to purchase the means of
production and labor-power. According to Marx's theory, even though the
quantities of C and M may change during the current production process as a
result of technological change, these quantities are nonetheless taken as
given in the determination of the price of the commodity for which they are
inputs. Marx's clearest statement of this point is in the following passage
from the 1861-63 manuscript, which I have presented in a previous post:
But the values of the material and means of labor only reappear in the
product of the labor process to the extent that they were pre-posited to the
latter as values, i.e. were values before they entered into the process.
Their value is equal to the social labor time materialised in them; it is
equal to the labor time necessary to produce them under given general social
conditions of production. If later on more or less labor time were to be
required to manufacture these particular use values, owing to some
alteration in the productivity of the labor of which they are the products,
their value would have risen in the first case and fallen in the second; for
the labor time contained in their value only determines it to the extent
that it is general, social, and necessary labor time. Hence although they
entered the labor process with a definite value, they may come out of it
with a different value that is larger or smaller, because the labor time
society needs for their production has undergone a general change... But
this change in the value of the material and means of labor involves
absolutely no alteration in the circumstance that in the labor process into
which they enter as material and means they are always preposited as given
values, values of a given magnitude. For in this process itself they only
emerges values in so far as they entered as values. A change in their
value never results from this labor process itself but rather from the
conditions of the labor process of which they are or were the products
and to which they therefore are not preposited as products. If their
general conditions of production have changed, this reacts back upon them.
They are an objectification of more or less labor time, of more or less
value then they were originally; but only because a greater or smaller
amount of labor time is now required than originally for their
production... These changes in their value, however, always arise from
changes in the productivity of the labor of which they are products,
and have nothing to do with the labor processes into which they
enter as finished products with a given value. Their change of value
stems from alterations in their own conditions of production, which occur
outside and independently of the labor process into which they enter as
material and means; not as a result of an operation occurring within the
labor process. For it they are always values of a given, preposited
magnitude, even though owing to external agencies, acting outside the labor
process, they are now preposited aas of greter of smaller mgnitude than was
originally the case. (MECW.30. 79-80)
As can be seen from this passage, Marx's justification for assuming that,
although the value of constant capital may change during the production
process, this value is nonetheless taken as given in the determination of
the prices of output, is that
THE VALUE OF CONSTANT CAPITAL IS DETERMINED IN A PRODUCTION PROCESS
DIFFERENT FROM THE ONE INTO WHICH IT ENTERS AS IN INPUT, and therefore this
value may be taken as preposited in this process in which it is an input.
The value of constant capital is LOGICALLY prior to the determination of the
prices of output, even though the value of constant capital is determined at
the time of the sale of the output.
Therefore, Alan's one-commodity model, in which the value of inputs and
outputs are determined in the same process and are derived from the
technical conditions of production, assumes a different theory of values and
prices than does Marx's theory, and hence does not apply to Marx's theory.
Looking forward to further discussion.
Fred