[OPE-L:4955] Re: ideal vs real value

Gerald Levy (glevy@pratt.edu)
Thu, 8 May 1997 10:17:02 -0700 (PDT)

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Chai-on wrote in [OPE-L:4954]:

> In vol 3 of Capital, Marx says even the process of circulation consists of
> "belated production process" or "eventual production process" as against
> the "immediate production process".
> Even if the commodity is placed in the market place with a price tag,
> it is in the process of production. (Chapter 17). Transport, storage is
> a part of production in the sphere of circulation. Only when the
> commodity is handed over to its purchaser, it is in the real exchange
> process. [...]

Thank you for raising this topic, Chai-on. I think there are many
important issues that would surface with a discussion of circulation
time, the costs of circulation, and commercial capital, including a
further discussion of the distinction between productive and unproductive
labour (Hi Simon and Murray!) and the degree to which the length of
circulation time can lead to a "restriction on the creation of value, and
the surplus-value, as expressed in the profit rate" (Vol 3, Penguin ed.,
p. 392).

While Marx says that "circulation time and production time are mutually
exclusive" (Vol 2, Penguin ed., p. 203), he distinguishes the *costs of
circulation* into "pure circulation costs" and other costs incurred in
circulation "such as dispatch, transport, storage, etc." (V3, p. 402).
[For a general discussion of this topic, see V2, Ch. 6].

In V3, he writes: "The purely commercial costs of circulation (*i.e.
excluding the costs of dispatch, transport, storage, etc.*) are the costs
that are necessary to realize the value of the commodity" and that "all
these costs are incurred not in the production of the commodities'
use-value, but rather in the realization of their value; they are pure
costs of circulation. They do not come into the immediate production
process, but they do come into the circulation process and hence into the
overall process of reproduction" (Ibid, pp. 402-403, emphasis added, JL).

On the other hand, he writes in V3, Ch. 16 "We have already explained
(Volume 2, Ch. 6, 'The Costs of Circulation', 2 and 3) the extent to
which the transport industry, storage and the dispersal of goods in a
distributable form should be viewed as production processes that continue
within the process of circulation" (Ibid, p. 379). [In V2, Ch. 6, he
writes re transport costs: "it is distinguished by its appearance as the
continuation of the production process *within* the circulation process
and *for* the circulation process", p. 229]. Later, in Ch. 17, he
refers to this as "charges arising from belated production processes
that are inserted within the circulation process" (Ibid, p. 401-402) and
"in so far as this cost element consists of circulating capital, it goes
completely into the sale price of the commodities as an additional
element, while in so far as it consists of fixed capital, it goes in
according to the degree of its depreciation" (Ibid, p. 402). Whereas if
the costs represent "purely commercial costs of circulation, this element
forms only a nominal value and not a real addition to commodity value
(what is "nominal value"?, JL). Whether circulating or fixed, however,
this additional profit goes into the formation of the general rate of
profit" (Ibid).

An interesting point to note re this thread is that while Marx states in
V2, Ch. 6 that "the general law is that *all circulation costs that arise
simply from a change in the form of the commodity can not add any value to
it*" (pp. 225-26, emphasis in original), he also notes that:

"once the commodities lingering in their circulation stores
fail to make room for the incoming wave of production, and the
stores are overfilled, the commodity stock expands as a result
of the stagnation of circulation, just as hoards grow if the
money circulation stagnates. It is quite immaterial here
whether the stagnation takes place in the storeroom of
the industrial capitalist or the warehouse of the merchant.
The commodity stock is then not a condition of uninterrupted
sale, but a consequence of the unsaleability of the
commodities. The expenses remain the same, but *as they arise
purely from the form*, i.e. from the necessity of transforming
the commodities into money, and the difficulty of this
metamorphosis, they do not enter into the value of the
commodities, but form *deductions*, a *loss of value in the
realization of value*" (Ibid, p. 225, emphasis added, JL).

In solidarity, Jerry