In reply to Fred's ope-l 4367.
I will be too busy through the upcoming EEA to deal with the many points Fred
raises all at once. Therefore, I think it is better if we discuss the issues
one by one. I'll start with Fred's new stuff. Here I address his 6b., on
revenue:
"Marx's equilibrium condition for department 3 is that the SURPLUS VALUE
spent by capitalists to consume surplus goods is equal to the price of the
surplus goods, where surplus-value is defined as the difference between the
total price of the commodities produced in the current period and the cost
of producing these commodities in the current period."
Marx has no department 3. It was invented by Tugan and, IMO, constitutes a
major departure from the dialectical vantage-point of Marx's schema, due to
its distributional focus. Marx was concerned instead with the capital/labor
relation as expressed materially in the preponderance of means of production
over articles of consumption.
Relatedly, there are no "surplus goods" in Marx's schema, only means of
production and articles of consumption. The existence of IIa and IIb does
not change this.
The "equilibrium condition" of which Fred speaks therefore does not exist.
There is a balance condition in the *simple* reproduction schema, that all
surplus-value is spent on the output of Dept. II (not III). However, this
result depends on Marx's explicit assumption that prices (values) are
constant. We were dealing with changing prices, however, so there is
necessarily a discrepancy between the simple reproduction of material
relations and the reproduction of value relations.
"By contrast, KM's equilibrium condition for department 3 replaces surplus
value on the demand side of the equation with an entirely new and different
concept, which they call 'REVENUE' but which has nothing to do with Marx's
concept of revenue or
with Marx's theory in general."
Note that KM refers to Kliman and McGlone (why does an ampersand not appear?),
not Karl Marx.
We were surprised to learn that people questioned the existence of the
"revenue" category as we presented it in our 1988 *Capital and Class* paper,
so in the revised version in *Marx and Non-equilibrium Economics*, we
introduced the category "m capitalists' personal revenue" on p. 40 and
immediately added a footnote (# 12, p. 47) that read:
"As a moment in the circuit of *productive* capital, its role in Table 1, m
is used by Marx to denote 'the capitalist's revenue' (Marx 1978: 149, also
152), 'the money that the capitalist spends, whether on commodities as such or
on services, for his esteemed self and family' (Marx 1978:146). In the
circuit of *money* capital, he uses m to denote surplus-value. To avoid
confusion, we use s instead."
Marx 1978 refers to the Vintage ed. of _Capital_ Vol. II. (The date is wrong,
for some reason, but the page numbers are right.)
I therefore deny that our use of the category of revenue is "an entirely new
and different concept, which they call 'REVENUE' but which has nothing to do
with Marx's concept of revenue or with Marx's theory in general."
Fred: "KM define 'revenue' as the difference between the price of the
commodities produced in the CURRENT period and the cost of producing these
goods in the NEXT period."
No, we do not. We defined it in footnote 12, without reference to the cost of
producing goods in the next period. Also, on p. 42, we write: "Each
department's total price (C'-M') in period 2, minus the sum of its advances to
production (M-C) in period 2, equals the reveunue (m) that the collective
capitalists consume unproductively on AC [articles of consumption] purchased
from Department II." Note that, again, "the cost of producing these goods in
the NEXT period" is not part of the *definition* of m. Rather m = total price
- advances.
Fred: "There is nothing like this concept of "revenue" in Marx's theory."
Yes there is. See p. 146 of Vol. II, in which Marx presents a figure dealing
with the C' to C phase of the circuit. Unfortunately, I can't reproduce it
over e-mail, but the point is that C' is the post-production "commodity
capital" one period of production and C is the "capital value" advanced in
the next and period of production. Marx breaks down the exchanges as
follows. The C' breaks into two parts, C + c. C exchanges for M, which
exchanges for C, which has two forms, L and mp. c exchanges for m which
exchanges for c. So, conceptually, this does take place between one period of
production (circuit of money capital) and the next, even though it is of
course true that, as Marx writes on the same page: "m-c is a series of
purchases made with the money that the capitalist spends, whether on
commodities as such or on services, for his esteemed self and family. These
purchases are fragmented, and take place at different times." That only means
that m exists as a hoard for awhile.
Fred: "Marx himself used the concept of 'revenue' in two different senses,
neither of which is KM's concept. One of Marx's uses of the term revenue" was
really the concept of the classical economists, and especially Adam Smith,
which refers to what we would call today "value added" or "total income", and
which is equal to the sum of the different types of income, e.g. wages +
profit + rent. This was Marx's sense of revenue in Part 7 of Volume 3 of
Capital, which is entitled "REVENUE and Its Sources".
"Marx's own concept of "revenue" is defined as a part of the total
surplus-value, and in particular to that part of surplus-value that is spent
on consumer goods, rather than accumulated as additional capital (see e.g.
Chapter 24, Section 4, of Volume 1 of Capital, which is about "the division of
surplus-value into capital and REVENUE.". This concept has to do with the
division of surplus-value into revenue and additional capital, which is
important in Marx's analysis of the reproduction schemes and in his analysis
of accumulation."
This second concept is essentially the concept of revenue that we employed,
only we referred to total value = total capital advanced + revenue (exactly as
in the passage from Marx on p. 246), and not to surplus-value = additional
capital + revenue. The two things are identical, since total value -
surplus-value = total capital advanced - additional capital = original capital
advanced. So I deny again that our use of the "revenue" concept diverges from
Marx's.
Fred: "Neither of these concepts have anything to do with KM's concept of
"revenue" as the difference between the price of the commodities produced in
the current period and the cost of producing these goods in the next period.
Marx never defined revenue in this way, nor did he define any other concept as
this particular inter-period difference."
Neither did we. See above.
Andrew Kliman