This is a belated response to Paul C's (2199). Paul was responding to my
comment in (2193) where I said that:
The value of constant capital and the value of labor-power are then
determined as the value represented by these given money quantities of
constant capital and variable capital.
to which Paul responded:
This seems suspiciously close to defining value to be price, which is of
course a rather easy way to transform values into prices of production.
Paul's comment is a good one. My comment was brief and requires fuller
elaboration. The general context of this statement is my interpretation of
Marx's theory of the aggregate amount of surplus-value, so this needs to be
briefly reviewed (please see my 1993 paper on the transformation problem in
'Marx's Method in Capital' for further discussion, if anyone is interested).
I argue that the logic Marx's theory of surplus-value is as follows::
1. The aggregate amounts of constant capital and variable capital ARE TAKEN
AS GIVEN, as quantities of money-capital invested to purchase means of
production and labor-power. These quantities are not derived as the value
of the means of production and means of consumption, as in the standard
Sraffian interpretation.
2. These given quantities of money-capital (constant capital and variable
capital) are assumed to be the "necessary form of appearance" of abstract
social labor. This function of money as the form of appearance of abstract
labor (or the "measure" of value) is the main conclusion of Marx's prior
analysis of the commodity in Chapter 1 of Capital, and is derived as a
deduction from the labor theory of value in Section 3 of Chapter 1. Marx
commented on this conclusion:
Money as a measure of value is the necessary form of appearance
of the measure of value immanent in commodities, namely labor-time.
(C.I., p. 188)
The starting point [of capital] is money ... the converted form of the
commodity, in which ... the labor contained in it has the form of general
social labor. (Marx and Engels Collected Works, vol. 30, p. 11)
3. This important conclusion is then presupposed in the remainder of
'Capital' and, in particular, in the theory of surplus-value. Therefore,
the quantities money-capital (constant capital and variable capital) taken
as given beginning in Part 2 of Volume 1, like all other quantities of
money, are assumed to represent definite quantities of abstract labor. The
precise quantities of abstract labor represented by these quantities of
money-capital depend on the value of money (m), which Marx took as given.
4. The quantity of abstract labor represented by the CONSTANT CAPITAL (the
"value of constant capital", or the "past labor" included in the total labor
required to produce this period's product, or the "value transferred" from
the means of production to the final product) is equal to:
(1) Lp = C * m
Lp will be equal to the labor-time required to produce the mean of
production if and only the price of the means of production is equal to
their labor-value, which in general will not be true. Since the means of
production enter capitalist production with a price, and not simply as
physical goods, the labor-time contained in the means of production has
already been represented in the price of the means of production, or in
constant capital, and it is this labor-time represented by the constant
capital, not the labor-time required to produce the means of production,
that forms a part of the total labor-time required to produce this period's
product.
5. Similarly, the quantity of abstract labor represented by the VARIABLE
CAPITAL (the "value of variable capital", or the "value of labor-power", or
the "necessary labor"), is equal to:
(2) Ln = V * m
Ln will be equal to the labor-time required to produce the mean of
subsistence if and only the price of the means of subsistence is equal to
their labor-value, which in general will not be true. According to this
interpretation, "necessary labor" is the amount of labor-time necessary for
workers to reproduce the money-equivalent of their money-wage, not
necessarily the amount of labor-hours required to produce the means of
subsistence. According to this interpretation, all workers perform
"necessary labor" - i.e. all reproduce the money-equivalent of their
money-wage - although not all workers produce means of subsistence.
This is an important point of agreement between my interpretation and the
"new interpretation" presented by Duncan, et al.
6. Marx also took as given in this theory of surplus-value the quantity of
current abstract labor (L) in the economy as a whole and the value of money
(m) (as already noted). The inverse of the value of money (1/m) is the
money-value produced per labor hour. The product of L and (1/m) determines
the money-"new-value" (N) produced in the economy as a whole by current
labor (i.e. N = (1/m)L ). This is the key assumption of Marx's labor theory
of value and his surplus-labor theory of surplus-value.
7. The aggregate price of the total commodity product is then determined by
the following equation:
(3) P = C + N
= C + (1/m)L
It makes no different in the determination of the aggregate price whether or
not the given quantity of constant capital is proportional to the labor-time
required to produce the means of production. The first component of the
aggregate price of commodities is equal to this given constant capital
whether or not this given constant capital is equal to (or proportional to)
the labor-time required to produce the means of production. In other words,
the "value transferred" from the means of production to the final product is
the value represented by the given constant capital, not the value of the
means of production.
8. From this theory of aggregate price, Marx derived the aggregate amount
of surplus-value (S). This derivation may be briefly summarized
algebraically as follows:
(4) S = P - K
= (C + N) - (C + V)
= N - V
= (1/m) L - (1/m) Ln
= (1/m) (L - Ln)
S = (1/m) Ls
where K represents the aggregate costs of production, and Ls the aggregate
surplus-labor-time. According to this theory, the aggregate amount of
surplus-value is equal to the excess of the money-value produced by workers
over the money-wages they are paid and is proportional to the aggregate
surplus-labor.
9. Finally, one key point with respect to Marx's theory of prices of
production. Marx's theory of prices of production can be represented by the
equation:
(5) Pi = Ci + Vi + Ri
where Ci and Vi are the amounts of constant capital and variable capital in
each industry, and Ri is the profit in each industry and is equal to
r(Ci+Vi) (ignoring the difference between flows and stocks). The key point
is that, in this theory of prices of production, THE SAME QUANTITIES OF
CONSTANT CAPITAL AND VARIABLE CAPITAL ARE TAKEN AS GIVEN as in the theory of
surplus-value summarized above. The only difference is that in the theory
of surplus-value the aggregate quantities of constant capital and variable
capital are taken as given, and in the theory of prices of production the
individual quantities of constant capital and variable capital in each
branch of production are taken as given. By assumption, the sum of the Ci's
is equal to C and the sum of the Vi's is equal to V. THIS is why constant
capital and variable capital DO NOT CHANGE in the transition from the
aggregate theory of surplus-value to the theory of prices of production, and
why constant capital and variable capital DO NOT HAVE TO BE TRANSFORMED, and
why Marx DID NOT FAIL TO TRANSFORM constant capital and variable capital.
The same quantities of constant capital and variable capital are taken as
given in both the aggregate theory of surplus-value and in the theory of
prices of production. Constant capital and variable capital are NOT first
determined as the value of given means of production and means of
subsistence and then determined as the price of these same given physical
quantities. This latter method in terms of given physical quantities is not
Marx's logical method, but is instead the method mistakenly attributed to
Marx's theory by the Sraffian interpretation.
10. `In conclusion, this interpretation is still very much a "labor theory
of value". It is just a different labor theory of value than the standard
Sraffian interpretation. It is a Hegelian interpretation rather than a
Ricardian interpretation. The labor theory of value is still very much
present in the following senses:
a. the aggregate amount of new-value produced is determined by the
aggregate amount of current labor.
b. the aggregate amount of surplus-value is determined by the aggregate
surplus labor. Surplus-value is the excess of the money-value produced by
workers over the money-wages they are paid.
c. The quantities of money-capital (constant capital and variable capital)
are assumed, on the basis of Marx's labor theory of value and theory of
money, to represent specific quantities of abstract social labor (but not
necessarily the labor-time required to produce the means of production).
Sorry for this long response to your short comment. But I hope it will
prove helpful in explaining why the value of constant capital and the value
of variable capital are derived from the given money quantities of constant
capital and variable capital, and how this derivation is based on the labor
theory of value and is part of the surplus-labor theory of surplus-value.
In any case, I am sure it will lead to further questions, which I look
forward to discussing after my return in 10 days or so.
Fred