[OPE-L:3600] Re: constant capital and variable capital

aramos@aramos.b (aramos@aramos.bo)
Tue, 5 Nov 1996 16:56:58 -0800 (PST)

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Some quick comments on some Allin's interesting observations in OPE-
L 3598:

1.
> So what about the formulations dropped by Engels, in which
> Marx says: price of production = cost-price plus profit;
> value = cost-price plus surplus value?

> It seems clear that *in that context* Marx is assuming that the
> *inputs* are sold at their values, not at prices of production
> that deviate from values.

I think that, given that all these quotations come from a draft,
Allin's hypothesis ("Marx is assuming that the *inputs* are sold at
their values, not at prices of production that deviate from values.")
is perfectly reasonable.

However, it seems to me that Allin does not wish to quote the lines
following the piece in p. 164-5 (Moscow edition) that he quotes. So,
Allin cites:

> Continuing: "Since the price of production may differ from
> the value of a commodity, it follows that the cost-price of
> a commodity containing this price of production of another
> commodity may also stand above or below that portion of its
> total value derived from the value of the means of
> production consumed by it." (Moscow edition, 164-5)

But, inmediatly after this, in the same paragraph, Marx says:

"It is necessary to remember this modified significance of the cost-
price, and to bear in mind that there is always the possibility OF AN
ERROR IF THE COST-PRICE OF A COMMODITY IN A PARTICULAR SPHERE IS
IDENTIFIED WITH THE VALUE OF THE MEANS OF PRODUCTION CONSUMED IN IT.
Our present analysis does not necessitate a closer examination of
this point" (In my "Moscow Edition", this lines, as well as those
quoted by Allin, are in p. 162)

So, Allin's hypothesis is reasonable, but if we identify the COST-
PRICE with the value of the means of production (i.e. as Allin says,
if "the inputs are sold at their values") WE ARE SIMPLY MAKING A
MISTAKE.

The decisive point in the definitions "dropped by Engels" is that
COST-PRICE, "k" is COMMON for both, VALUES and PRODUCTION
PRICES. Now then, if we think that "k" corresponds to the the "value
of inputs", it is clear that there would be an error. "k" must be
"transformed", i.e. considered as corresponding to the "price of
production of the inputs" for BOTH, VALUES AND PRODUCTION PRICES.
This is what the definitions underline.

Incidental observation: Bortk. et al. were right saying that "the
inputs must be transformed". The problem is that they transformed
them ONLY IN THE PRODUCTION PRICES EQUATIONS, FORGETING THAT THE
INPUTS MUST BE ALSO TRANSFORMED IN THE VALUE EQUATIONS.

2.

> This is all perfectly consistent with the idea that Marx is
> groping towards some sort of iterative transformation. He
> knows that the cost-prices of inputs may already deviate
> from values, but at the same time he keeps slipping back to
> the "simple case", where inputs are purchased at their
> values.

I think that the idea of a "sort of iterative transformation" is
unnecessary complicated. I can accept that in a first moment Marx
thinks of cost-price "k" as equal to the "value of inputs".
(Actually he says this "It was ORIGINALLY ASSUMED that the cost
prices of a commodity equalled the **value** of the commodities
consumed in production", Penguin, p. 264), But, later, he clearly
says that -given the new conditions considered- this would be wrong.
So, "k" must be considered as equal to the "prices of production of
inputs". We no need any "sort of iterative transformation" for this.
The "simple case" (where prices = values) has been analytically
superated.

3. Allin poses to consideration some "dynamic" cases considered by
Marx in these chapters (see, for example, in Penguin, p. 266, where
Marx considers "changes" in profit rate and values). I think he is
right raising this problems but I also that this kind of
examples and problems require a more complex framework to be
considered. (Ted, Andrew and Alan work is particularly important in
this respect.)

So, I think that we could concentrate our efforts, in a first stage,
in the interpretation of what we can call the "traditional framework"
of the transformation. For instance, let us take the single-table
of Penguin p. 264, where Marx does not consider "changes" of any kind.

What are, there, the definitions of "value" and "production price"
suggested by Marx?
Have we, in this table, any element to think that the magnitude
"k", cost price is different, regarding, on the one hand, the
calculation of prices and, on the other, the calculation of values?

Alejandro Ramos, 5.11.96