This is a reply to Allin's (3744) and (3748).
The specific issue in these posts is whether Marx argued that the prices of
"average" commodities (produced with the average composition of capital) are
equal to their values even when the prices of the inputs for these
commodities are NOT equal to the values of these inputs. If so, then the
cost price component must be the SAME for both the price of production and
the value of average commodities. This conclusion provides important
support for the "single system" interpretation of Marx's theory.
I hope that Allin will forgive me for interpreting his "as if" argument
regarding Marx's discussion of average commodities in Chapter 12 of Volume 3
as a general argument regarding all of Marx's discussions of the prices and
values of average commodities. It was never explicitly stated that this
argument does not apply to Marx's other discussions of the average commodity
(or maybe I missed it), so I just assumed that it did apply. I read Allin's
posts carefully, but I guess I made a mistake (not the first). (Allin,
let's not turn rancorous. What is obvious to you may be obvious to your
readers.)
In any case, why doesn't Marx's argument in Chapter 12 also apply to his
other discussions of the average commodity? Because, Allin argues, only in
this discussion in Chapter 12 was Marx assuming that the prices of the
inputs are not equal to their values. In the other discussions of average
commodities, Marx assumed that the prices of the inputs are equal to their
values, in which case the "double system" interpretation would also imply
(along with the "single system" interpretation) that prices of average
commodities are equal to their values.
However, let's review quickly again at Marx's earlier discussions of the
price and value of average commodities in Chapter 9 and 11 of Volume 3 (and
also briefly mention another reference in Chapter 10 that I just noticed
yesterday.
CHAPTER 9
On. p. 263, Marx discussed average commodities and argued that the prices of
production of these average commodities are equal to their values. Two
pages before (p. 261), and two pages later (p. 265), Marx explicitly
discussed the fact that the prices of production of inputs are in general
not equal to their values. Allin seems to be arguing that the discussion of
average commodities on p. 263 is based on the assumption that the prices of
the inputs are equal to their values, event though Marx explicitly discussed
the inequality of the prices and values of inputs immediately before and
immediately after the discussion of the average commodity. Why would the
inequality of the prices and value of inputs not also apply to average
commodities?
CHAPTER 10
Chapter 10 opens another clear statement that the prices of production of
average commodities is equal to their values. Again, this is after Chapter
9 in which prices of production have already been determined, including the
prices of production of the inputs.
In some branches of production the capital employed has a composition of
capital we may describe as 'average' or 'mean'; i.e. a composition exactly
or approximately the same as the average of the total social capital.
In these spheres, the production prices of the commodities produced
coincide exactly or approximately with their values as expressed in money.
(Penguin, p. 273)
Marx repeated essentially the same sentence in the first sentence of the
next paragraph on the next page.
CHAPTER 11
I think that this chapter provides the strongest evidence against Allin's
"as if" interpretation. This chapter is about the effects of a change in
wages on prices of production (i.e. Ricardo's question). Marx clearly
stated in the last paragraph of this chapter (already discussed) that the
entire analysis in this chapter is based on the assumption that prices of
production have already been determined. Marx had already discussed in
Chapter 9 that the determination of prices of production includes the
determination of the prices of production of the inputs. Therefore, the
analysis in Chapter 11 also presumes that the prices of production of the
inputs have already been determined. Why would Marx revert back in Chapter
11 to the assumption that inputs are exchanged at their values?
CHAPTER 12, Section 2
Here again, Marx emphasized the point that the price of production of the
inputs will not be equal to their values, and here emphasized explicitly
that this will also be true for average commodities. However, Marx argued:
Yet this possibility in no way affects the correctness of the principles
put forward for commodities of average composition... (B)ecause (the
surplus-value) is equal to the average profit, the price of production =
cost price + profit = k + p = k + s, which in practice is equal to their
value. In other words, an increase or decrease in wages in this cases
leave k + p unaffected ...
Allin interprets this section as being only about only one conclusion or
"principle" - the effect of a change of wages on prices of production. But
TWO principles have been put forward in previous chapters, not just one, and
both are repeated in this paragraph: (1) the prices of production of average
commodities are equal to their values, and (2) the prices of production of
average commodities are not affected by a change of wages. Marx's argument
is that (2) is true BECAUSE (1) is true. Allin presents another argument
that (2) does not depend on (1); instead (2) follows even if (1) is not
true. Allin's argument appears to be correct, but it is not Marx's
argument. (1) may not be a necessary condition for (2), but it is a
sufficient condition and this is what Marx argued.
Allin objects that the words "in practice" in the above passage are odd and
really mean "as if". However, Marx's earlier statements (discussed above)
that the prices of production of average commodities are equal to their
values say nothing about "in practice". It is simply stated that, in the
case of average commodities, their prices of production are equal to their
values.
Finally, Allin also argues that his interpretation of this paragraph is also
supported by the first paragraph of Section 2, in which it is stated that
the divergence of prices of production of outputs from their values arises
in part from the divergence of the prices of production of inputs from their
values. This first paragraph seems to imply that the cost price of
commodities is not the same for the determination of the values and prices
of production of outputs.
In earlier posts, I have acknowledged this implication, which is
inconsistent with the "single system" view. However, I have argued that
this statement at the beginning of Section 2 was a lapse on Marx's part in
which he reverted back to Volume 1 assumptions. There is one more statement
like this in Volume 3 of Theories of Surplus-value (p. 167). I know of no
other statements like this. Therefore, it seems to me that the textual
evidence which we have examined in recent weeks that support the single
system interpretation far outweighs these two statements. That is why I
interpret these two statements as momentary lapses back to Volume 1
assumptions, rather an expression of Marx's fundamental views.
Allin has responded that my argument attributes to Marx "verbal trickery" in
which he changed the meaning of "value" from Volume 1 to Volume 3. But I
think that this misunderstands my argument (maybe because it has not been
clearly expressed). My argument is that value is DETERMINED in the SAME way
in both Volume 1 and in Volume 3 - by the sum of cost price and
surplus-value (actually, as I have previously discussed, by the sum of
constant capital and money value added, but this difference does not affect
the issue here). The cost price of commodities is equal by definition to
the sum of the constant capital and variable capital consumed in the
production of the commodities. The key point in my interpretation is that
these quantities of constant capital and variable capital are TAKEN AS
GIVEN. The SAME quantities of constant capital and variable capital are
taken as given in the theory of surplus-value in Volume 1 and in the theory
of prices of production in Volume 3. That is why Marx did not "fail to
transform the inputs" in his determination of prices of production. More
relevant to the current discussion, that is also why the cost price remains
the same in the determination of the value of commodities in both Volume 1
and Volume 3, or why the determination of value does not change from Volume
1 to Volume 3.
As we all know, Volume 1 is based on the assumption that the prices of all
commodities is equal to their values. Under this assumption, the cost price
of commodities is equal to the sum of the values of the means of production
and the means of subsistence. However, in Volume 3 it is determined that
prices of production are not equal to their values, so that the cost price
of commodities is not equal to the sum of the values of the means of
production and the means of subsistence. However, this determination of
prices of production does not change the magnitude of the cost price of
commodities from Volume 1 to Volume 3 and hence does not change the
determination of the value of commodities from Volume 1 to Volume 3. There
is no "verbal trickery" here. The magnitude of the cost price is still
equal to the given quantities of money constant capital and variable
capital, and the magnitude of value is still equal to the sum of the cost
price and the surplus-value. The only difference is that it is now seen
that this magnitude of the cost price is equal to the prices of production
of the inputs rather than to the values of the inputs.
Therefore, when Marx said at the beginning of Section 2 that the divergence
of the prices of production and the values of outputs arises in part from
the divergence of the prices of production and the values of the inputs, I
think that he was slipping back into the Volume 1 assumption that the cost
price of commodities is equal to the value of the inputs. I think that he
was saying something like "the transformation of values, as we originally
thought about them in Volume 1, into prices of production comes about in
part by the divergence of the prices of inputs from their values. However,
this does NOT imply that, after the determination of prices of production in
Volume 3, the cost price of commodities continues to be equal to the value
of the means of production and means of subsistence, nor that
the value of commodities continues to be equal to the sum of the values of
the means of production and the means of subsistence plus the surplus labor.
and the surplus labor-time, as Allin's interpretation suggests.
I am willing to continue this discussion of average commodities and Chapter
12, but I would also like to ask again that some attention be given to my
general "monetary" interpretation of the initial givens in Marx's theory -
that these initial givens are the quantities of money capital that initiate
the circulation of capital (the M in M-C-M') and not the physical quantities
of inputs and outputs, as in the traditional interpretation. My
interpretation of Chapter 12 is based ultimately on this general "monetary"
interpretation, as is Allin's interpretation of Chapter 12 based ultimately
on the traditional interpretation. Therefore, I would hope that at some
point the discussion could turn to these more general issues.
Comradely,
Fred