I recently had the opportunity to write a letter in which, among other things,
I brought together almost all the textual evidence that values and prices in
_Capital_ constitute a single system, not two opposed systems. Or, to use the
terminology favored by Ramos, Rodriguez, and Freeman, this is evidence for the
"nondualist" interpretation, and against the "dualist" one. Some people on
ope-l may be interested in this, so I'm posting, below, the relevant part of
the letter, followed by some additional evidence that Alejandro Ramos pointed
out yesterday in a comment on my letter.
First, however, let me note that this constitutes a much-belated reply to Gil,
who asked me to supply evidence in support of my claim that it was because of
the dialectical method of _Capital_ that Marx didn't state from the outset
that constant and variable capital are determined by the *prices* of means of
production and subsistence, not their *values*. As I note below, "the manner
in which he writes about their determination corresponds to his specific
assumptions and stages of analysis." I'm sorry for the delay but, on the
other hand, I did send Gil a letter with most of the same evidence and
analysis one year ago.
First, although Marx does not discuss this issue much in Vol. I, since he
assumes exchange at values throughout much of it, he does note the following
in Ch. 8 (of the English editions; all page references will be to the
Vintage/Penguin translation). "Suppose that the *price* of cotton is one day
sixpence a pound, and the next day, as a result of a failure of the cotton
crop, a shilling a pound. Each pound of the cotton bought at sixpence, and
worked up after the rise in value, transfers to the product a value of one
shilling [pp. 317-18, my emphasis]." This seems to indicate that the amount
of value transferred depends on the price, not the value, of the means of
production.
Ch. 6 of Vol. III is an extended discussion of "The Effect of Changes in
Price" on the profit rate. Marx argues that price changes affect the profit
rate by altering the constant capital advanced. The profit rate to which Marx
refers is the "value" rate of profit, s/(c+v) - which for him is the same as
the general "price" rate of profit. Of course, at this point, he is still
assuming exchange at values, and thus assuming
that any rise or fall in prices is an expression of real fluctuations in
value. But since we are dealing here with the effect that these price
fluctuations have on the profit rate, it is actually a matter of indifference
what their basis might be. The present argument is just as valid if prices
rise or fall not as a result of fluctuations in value, but rather as a result
of the intervention of the credit system, competition, etc. [p. 208].
Thus, if prices change, for whatever reason, they alter the (value) rate of
profit by altering the magnitude of the constant capital advanced.
A passage in the Theories of Surplus-Value (Part III, Progress, 1971, p. 223;
cf. Collected Works vol. 31, p. 65) also makes the same point:
if the price of cotton, etc., should fall, e.g., as a result of an especially
good harvest, then in most cases the price falls below its value, again
through the law of demand and supply. The rate of profit ... increases,
consequently, not only in the proportion in which it would have increased had
the cotton which has become cheaper been sold at its value; but it increases
because the finished article has not become cheaper in the *total* proportion
in which the cotton-grower sold his raw cotton below its value.
Once Marx does deal systematically with the transformation of values into
production prices, he immediately notes in a couple of passages that prices
influence both variable capital and the value transferred from constant
capital. On p. 261, he writes:
Apart from the fact that the price of the product of capital B, for example,
diverges from its value, ... the same situation also holds for the commodities
that form the constant part of capital B, and indirectly, also, its variable
capital .... As for the variable capital, the average daily wage is certainly
always equal to the value product of the number of hours that the worker must
work in order to produce his necessary means of subsistence; but this number
of hours is itself distorted by the fact that the production prices of the
necessary means of subsistence diverge from their values.
Thus, the quanta of value laid out as constant capital and as variable capital
are affected by divergence of prices from values, because they depend on the
prices, not values, of means of production and subsistence. The number of
hours a worker needs to work to produce an amount of value equivalent to
his/her wage is not a purely technological datum, i.e., it does not depend
purely on the labor-time currently needed to reproduce means of subsistence.
It rather depends on the actual amount of value laid out in wages, which
depends in turn on the price of means of subsistence.
Similarly, on pp. 264-65 (2nd emphasis is mine):
It was originally assumed that the cost price of a commodity equalled the
*value* of the commodities consumed in its production. But ... [a]s the price
of production of a commodity can diverge from its value, so [can] the cost
price of a commodity, in which the price of production of other commodities is
involved .... It is necessary to bear in mind this modified significance of
the cost price, and therefore to bear in mind too that *if the cost price of a
commodity is equated with the value of the means of production used up in
producing it, it is always possible to go wrong*.
And again, on pp. 309 (Ch. 12, "Supplementary Remarks"):
[T]he price of production of a commodity that diverges in this way from its
value enters as an element into the cost price of other commodities, which
means that a divergence from the value of the means of production consumed may
already be contained in the cost price ....
It is quite possible, accordingly, for the cost price to diverge from the
value sum of the elements of which this component of the price of production
is composed, even in the case of commodities that are produced by capitals of
average composition. ... The [variable capital] can similarly diverge from
its value, if the spending of wages on consumption involves commodities whose
prices of production are different from their values. The workers must work
for a greater or lesser amount of time in order to buy back these commodities
(to replace them) and must therefore perform more or less necessary labor than
would be needed if the prices of production of their necessary means of
subsistence did coincide with their values.
Here again there is a clear statement of a *conceptual difference* between the
value laid out as constant capital and the value of the means of production,
and between the value laid out as variable capital and the value of means of
subsistence. And again, Marx indicates that necessary labor is not determined
purely by the amount of labor-time needed to reproduce means of subsistence,
but by the amount of the worker's labor needed to replace the quantum of value
s/he has received as wages, which depends on prices of means of subsistence.
In connection with the transformation, there is also a significant passage in
the Theories of Surplus-Value (Part III, p. 167, Progress, 1971; cf. Collected
Works, Vol. 32, p. 352) at the end of the section on Bailey:
the cost-price of constant capital ... may likewise be either above or below
its value. ... It is clear that what applies to the difference between the
cost-price [production price] and the value of the *commodity* as such - as a
result of the production process - likewise applies to the *commodity* insofar
as, in the form of constant capital, it becomes an ingredient, a
pre-condition, of the production process. ... the difference between
cost-price [production price] and value, insofar as it enters into the price
of the new commodity independently of its own production process, is
incorporated into the value of the new commodity as an antecedent element.
The difference between cost-price [production price] and value is thus brought
about in two ways ....
This passage indicates that the influence of past prices on current values
which Marx discusses in Vol. III was part of his thinking from at least 1863,
before he began writing the manuscripts that became Vol. III. It also
indicates that the charge that Marx "forgot to transform input prices" is
incorrect. He notes quite clearly that the transformation pertains to inputs
as well as outputs -- but not simultaneously. Rather, the price/value
deviation of the constant capital is an "antecedent element."
Finally, there is a passage later in Vol. III which indicates that variable
capital and surplus-value in reality depend on the actual price (not the
production price, and not the value) of means of subsistence: "If the
commodity with the monopoly price is part of the workers' necessary
consumption, it increases wages and thereby reduces surplus-value, as long as
the workers continue to receive the value of their labour-power" (p. 1001).
Putting this passage together with those that concern the influence of
production prices on constant and variable capital suggests an explanation for
the confusion over Marx's concept of the determination of the value of
constant and variable capital: the manner in which he writes about their
determination corresponds to his specific assumptions and stages of analysis.
Until Ch. 9 of Vol. III, because he was *assuming* exchange at values, he
often wrote that constant and variable capital are determined by the values of
means of production and subsistence, which can give the impression that they
are determined independent of exchange conditions. Once he relaxed this
assumption in Ch. 9, he immediately noted that constant and variable capital
are instead determined by the production prices of means of production and
subsistence, not their values. And when he examined monopoly prices, briefly,
he noted that they too influence the magnitudes of constant and variable
capital. Thus, rather than constant and capital being determined wholly apart
from exchange, they are equal to the values of means of production and
subsistence when (but only when) commodities happen to *exchange* at their
values.
Finally, the textual evidence that I consider the *most* important by far is
that the single-system interpretation is able to replicate many significant
theoretical results which Marx obtained and which the standard, two-system,
interpretation is unable to replicate. This is particularly the case when the
single-system interpretation is combined (as in my work) with an
interpretation of values and production prices in Marx's work as being
determined temporally (sequentially), not simultaneously. Total price and
profit always equal total value and surplus-value respectively, and
transformation leaves the profit rate as s/(c+v). The problem of negative
values and surplus-values cannot arise (this is discussed in the enclosed
paper). Production conditions in non-basic industries can affect the general
rate, the general rate is not affected by the distribution of profit, the
general rate is determined by magnitudes of labor-time and not only by
technology and the real wage. And, of course, technical change itself can
lead to a fall in the general rate of profit. This ability of the temporal
single-system interpretation to replicate Marx's theoretical conclusions does
not, of course, mean that it necessarily makes for good theory, but I think it
clearly does indicate its superiority as an *interpretation* of Marx's texts.
>From a letter by Alejandro Ramos:
"...
I have been reading your reply to [----], mainly the "textual evidence"
section. It is impressive "to see all of it at once". However, I think you
have missed two important references which, perhaps could be useful for a
second round with [----]:
(a) Capital Vol. III, Ch. 9, pp. 264, Penguin/Vintage
Here we have a single-table version of the transformation, a single system
version, presented by Marx himself!! In this case there are not 2 tables as
the "dualists" want and need. As a textual evidence this single-table example
has the same importance as the infinitely quoted two-tables version. However,
no-one cares of it. As far as I know the only person who quotes this (with a
very weak argumentation)
is Arghiri Emmanuel in an article of 1962. (I have an imprecise reference of
the original French, but I have the Spanish version) In the article written
with Adolfo [Rodriguez] for M&NE [_Marx and Non-equilibrium Economics_] there
is an incidental reference to this in footnote 11. Adolfo uses this example in
his dissertation.
...
(b) Marx Engels Gesamtausgabe (MEGA 2, Band 4). Original manuscript of Vol.
III, published in 1992 by IISG, Amsterdam, (Dietz Verlag, Berlin), pp 239-240.
I have photocopies, if you need them.
Here we have a passage SUPPRESSED BY ENGELS where Marx defines clearly
value and production prices as:
Werth = KostenpreiB + Mehrwerth
ProductionspreiB = KostenpreiB + Profit
Hence, there is no difference between value and production-price regarding
"KostenpreiB". This is what [----] et al. have been misunderstanding for 90
years. Perhaps the article written in German quoted by Mino [Carchedi] (Ohno,
1993) deals with these "details".
My best, Alejandro 30.10.96"
Let me note that I knew about Alejandro's first piece of additional evidence,
but neglected to mention it. The second piece is new to me, however, even
though I used these exact definitions of value and price in a debate with
Allin on ope-l last winter. I think Alejandro has made an important
discovery.
Andrew Kliman