I was of course very interested to return home yesterday and read the
OPEL discussion last week (mainly between Alejandro R. and Ajit) about
"is Fred a new solutionist?"
I have certainly have never thought of myself as a "new solutionist". As
Alejandro pointed out, in my (1993) paper I emphasized my differences with
the new solution. The paragraph quoted by Alejandro is from a section of
that paper entitled "Comparison with the New Solution ..." I am sure that
that section was in the draft I sent Ajit in pretty much the final version.
So I would say that Ajit is wrong in his interpretation of that paper and
ask him to clarify on what basis he judges me to be a "new solutionist."
However, my paper for the IWGVT this week, while continuing to emphasize
these differences, also emphasizes more some of the important similarities
between my interpretation and the new solution. The subtitle of this paper
is "a sympathetic critique."
To briefly summarize some of the important similarities between my
interpretation and the new solution (all these points have been discussed
in prior OPEL posts): First, both interpretations emphasize the monetary
nature of Marx's theory and that the general analytical framework of Marx's
theory is the circuit of money capital, M-C ... P ... C'-M'. Secondly,
both interpretations emphasize the general methodological principle of the
prior determination of aggregate magnitudes (prior to individual
magnitudes). Thirdly, both emphasize that the key assumption in Marx's
labor theory of value is that the value added component of the price of
commodities is proportional to the living labor expended.
More specifically, another important similarity is that variable capital is
taken as given, as a quantity of money capital, rather than derived from a
given physical quantity of wage goods, as in the standard (Sraffian)
interpretation. The same quantity of money capital is 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, so that, in the determination of prices of
production, variable capital does not have to be transformed from values to
prices of production.
However, and here is the key disagreement between the two interpretations,
the new interpretation determines CONSTANT CAPITAL differently from
variable capital (as emphasized in the passage quoted by Alejandro).
Constant capital is NOT taken as given as a quantity of money capital, as
in my interpretation, but is instead derived from a given physical quantity
of means of production, as in the standard (Sraffian) interpretation. As a
result, constant capital changes in the transition from the theory of
surplus-value in Volume 1 to the theory of prices of production in Volume
3. In Volume 1, constant capital is equal to the value of the given means
of production, and in Volume 3, constant capital is equal to the price of
production of the same given means of production.
Therefore, I argue that there is a key methodological inconsistency in the
new solution between the determination of constant capital and the
determination of variable capital. Variable capital is taken as given in
money terms, but constant capital is derived from given physical
quantities. My paper argues that, since constant capital and variable
capital are specific forms of the general concept of capital, they should
both be determined in the same way. Either they should both be taken as
given in terms of money or they should both be derived from given physical
quantities. Nowhere in Marx's writings is there a suggestion that constant
capital and variable capital are determined in different ways. My paper
also argues that there are strong reasons for assuming that constant
capital and variable capital are taken as given in Marx's theory as
quantities of money capital, as the two components into which the money
capital (M) that initiates the circulation of capital is divided. Thus I
argue that the new solution "goes only halfway" in breaking out of the
standard Sraffian interpretation of Marx's theory. It breaks out for
variable capital, but not for constant capital. As a result, it is
inconsistent.
The new solution's inconsistent treatment of constant capital and variable
capital leads to the following erroneous (in my opinion) conclusions
regarding Marx's theory of prices of production: (1) Marx made a partial
error in his determination of prices of production in Volume 3 (failing to
transform constant capital); (2) the total price of commodities also
changes from Volume 1 to Volume 3, so that the total price is no longer
equal to the total value of commodities; (3) the rate of profit also
changes from Volume 1 to Volume 3, i.e. the "price" rate of profit is not
equal to the "value" rate of profit.
So what I am basically arguing is that the new solution should be EXPANDED
or COMPLETED to include an interpretation of constant capital similar to
that of variable capital. I think that there is very substantial textual
evidence to support this consistent determination of constant capital and
variable capital. If the new solution were expanded in this way, then all
our other differences (discussed in the last paragraph) would disappear,
and I would indeed be a "new solutionist" and would be happy to be called
one. But this is an important "if", and in the absence of this extension,
I will continue to emphasize the methodological inconsistency in the new
solution, and the erroneous conclusions that follow from it.
I should qualify the above and say that I am talking here about Duncan's
version of the new solution. Dumenil's version is different from Duncan's
version in significant ways, especially in that Dumenil's version does not
emphasize the monetary nature of Marx's theory, and even goes so far as to
argue that, not only Volume 1, but also Volume 3, is mainly about
labor-values and not about prices and monetary magnitudes (even prices of
production and profit - Volume 3 concepts - are defined in labor-time
units). Simon Mohun's version is closer to Duncan's than to Dumenil's
version.
Therefore, whether or not "Fred is a new solutionist" depends mainly on
Duncan's response to the above arguments. Duncan has said in his IWGVT
paper that he "has no objections" to extending the new solution to constant
capital as I have suggested, and that his work on the "circuits of capital"
is based on essentially the same interpretation. So perhaps I will be a
"new solutionist" after all. Maybe we shall find out in Washington.
I will deal in a later post, probably after Washington, since time is
running short, with Ajit's critique of my interpretation.
Comradely,
Fred