In (4367) I wrote:
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. There is nothing like this concept of
"revenue" in Marx's theory.
Andrew replied in (4370):
on p. 42 [of their more recent version in *Marx and Non-Equilibrium
Economics*], we write: "Each department's total price (C'-M') in PERIOD
TWO, minus the sum of its advances to production (M-C) in PERIOD
TWO, 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. (first two emphases added)
I was surprised at this, since it was certainly not the way I remembered
their definition of "revenue", so I looked back at p. 42, and my surprise
was confirmed.
Their sentence reads as reproduced by Andrew, except that the first PERIOD
TWO reads - guess what - PERIOD ONE!! In other words, this is exactly what
I said their definition of revenue was. The same sentence appears on p. 74
of the original Capital and Class article. And this definition is applied
in Table 1 of the original article and in the tables on p. 41 of the more
recent version - which is what I was working from in writing my earlier
post. The first column of these tables is the column of revenues. There
are no magnitudes for revenue in period 1 because it is defined as an
inter-period difference and therefore acquires magnitudes only in period 2.
The magnitudes in period 2 are precisely what I said in my original post:
"the difference between the price of the commodities produced in the CURRENT
period and the cost of producing these goods in the NEXT period." For
example, for Dept 2, the price of the commodities produced in period 1
(under the heading (C'-M')) is 285.71. The constant capital and variable
capital advanced in period 2 (under the heading (M-C)) is 202.38. The
"revenue" for period 2 is:
285.71 - 202.38 = 83.33
And similarly for Dept. 1 and the economy wide totals.
So, Andrew, please explain.
I repeat that there is nothing like this concept in Marx's theory (that I
know of ), or at the very least, there is nothing like this concept in
Marx's analysis of reproduction. Andrew points to one passage in Chapter 2
of Volume 2 in which Marx discusses a series of exchanges in which the
surplus-value contained in this year's output is first realized in the form
of money through the sale of this year's output and then used to buy
capitalist consumption goods produced this year. The surplus-value then
"makes its exit from circulation" (since it is not reinvested as capital in
the next period). This surplus-value is equal to the difference between the
price and the cost of this year's output, and is determined before these
transactions take place. Nothing is said about a concept of "revenue".
There is no concept defined as an inter-period difference between the price
of the output of this period and the costs of production in the next period.
All this is entirely consistent with my interpretation and does not support
Andrew's interpretation in any way.
Andrew is right about one thing - there is no dept. 3 in Marx's analysis of
reproduction. But this does not affect my argument in any way. I couched
my argument in terms of dept. 3 only in order to highlight KM's "completely
new and different" concept of "revenue", since this revenue stands alone on
the demand side of the equilibrium condition for dept. 3. But the exact
same argument can be made (just a little less clear) in terms of dept 2 in
the two dept. scheme. In this case, the demand side for Andrew's
equilibrium condition for dept. 2 is variable capital plus REVENUE, rather
than variable capital plus SURPLUS-VALUE, as in Marx. The same critique I
made of the concept of revenue with respect to dept. 3 applies equally as
well to dept. 2 - there is no such concept of revenue in Marx's theory.
Comradely,
Fred