Thanks very much to Alejandro R. for his comments (in 3801) on my "monetary"
interpretation of the initial givens in Marx's theory.
1. Alejandro argued:
Money --from the simplest to the most complex form--is ESSENTIALLY a
REPRESENTATION OF LABOR-TIME. Marx's monetary theory is a
constitutive part of his theory of value.
So, when Fred says that the "givens" in Marx's theory are quantities of
money, actually these amounts are the representation of quantities of
labor-time
I agree of course that money is a representation of labor-time (and have
also emphasized this point). So a given amount of money could also be
interpreted as the representation of a given amount of labor-time.
My main point in emphasizing that the initial givens in Marx's theory are
quantities of money capital is that the SAME AMOUNTS of money capital are
taken as given, BOTH in Marx's theory of surplus-value in Volume 1 AND in
his theory of prices of production in Volume 3 (the only difference is that
only aggregate amounts are considered in Volume 1 and individual industry
amounts are considered in Volume 3). In other words, the amounts of money
capital are not first derived in Volume 1 as the value of given means of
production and means of consumption and then later rederived in Volume 3 as
the prices of production of these given physical bundles of goods. This is
why the "inputs" of constant capital and variable capital do not change
(i.e. do not need to be "transformed") in the transition from values to
prices of production. Or, more directly related to our recent discussion,
this is why the cost price of commodities is the SAME for BOTH the
determination of the values and the determination of the prices of
production of commodities. Another way of putting this point is that the
initial givens in Marx's theory is the cost price of commodities, as we have
discussed in recent posts. The cost price of commodities is clearly defined
by Marx in terms of money.
I hope that we agree at least on this important point - that the initial
givens of Marx's theory are NOT the physical quantities of means of
production and means of subsistence, from which the magnitudes of constant
capital and variable capital are derived.
2. Alejandro argued further:
It is clear that, as long as the amount of labor-time represented by one
unit of money is constant, Fred's formulation is equivalent to say that
the "givens" in Marx's theory are amounts of labor-time.
Yet, what happens if the quantitative relationship between
labor-time/money changes? What are then the "givens", labor-time or
money quantities?
Alejandro then cites a passage from Wages, Price, and Profit to support his
interpretation that, in the case of a change in the value of money, the
initial givens in Marx's theory are quantities of labor-time, rather than
quantities of money.
In response, I argue that the phenomena to be explained in Marx's theory -
to begin with in Marx's theory of surplus-value - are monetary phenomena -
i.e. how does the money capital invested in the first phase of the
circulation of capital become more money in the third phase? The phenomenon
is described by the general formula for capital, which is of course M - C -
M'. The general formula is not
L - C - L'.
This all-important monetary phenomenon is explained according to the
following equations:
(1) P = C + MVA = C + mL
(2) S = MVA - V
The left hand side of equation (1) is clearly a monetary variable (the
aggregate price of commodities). Therefore, the terms on the right hand
side of the equation must also be monetary variables. MVA is clearly a
monetary variable and so is C. Similarly, the variables in equation (2) are
also monetary variables. It is in this sense that I have argued that C and
V are taken as given in terms of the initial money capital consumed in the
production of commodities. The monetary phenomenon of surplus-value
(increment of money) is ultimately explained by surplus labor time, i.e. by
excess of the total current labor-time over the labor time necessary to
reproduce the money variable capital.
Now, if the value of money changes, then all prices will change inversely,
and the magnitudes of these money capital will also change accordingly (as
Marx and Alejandro point out, the change of the variable capital may lag
behind the change of the other variables). However, the above points remain
true: The phenomenon to be explained remains the same monetary phenomenon:
the origin and magnitude of the increment of money that is characteristic of
capital, and this monetary phenomenon is explained in the same way: by
taking the quantities of the initial money constant capital and variable
capital (i.e the cost price of commodities as we have been discussing) as
given and by deriving the increment of money as a result of the current
surplus labor of workers.
Therefore, I continue to argue that the initial givens in Marx's theory are
the quantities of money constant capital and variable capital consumed in
the production of commodities (the cost price of commodities), not the
physical quantities of inputs and outputs, and not directly the quantities
of labor represented by these quantities of money capital.
Comradely,
Fred