[OPE-L:5301] Re: x+a = revenue

Ajit Sinha (ecas@cc.newcastle.edu.au)
Mon, 23 Jun 1997 01:56:57 -0700 (PDT)

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At 06:42 AM 6/20/97 -0700, Andrew Kliman wrote:
>A reply to Ajit's ope-l 5296.
>
>Ajit writes: "The big problem with you Andrew is that you don't understand
>plain English. Go and read the passage you had quoted from Marx again, and
>this time real slow. ... x+a in Marx's example is not revenue. Marx is not
>talking about a situation where even simple reproduction will not be possible.
>I think you would develop a good critique of your own theory if you started to
>read Marx a bit closely."
>
>Here's the passage in question:
>
>"If the annual surplus-value on a capital C = x, for example, the cheapening
>of those commodities that go into the consumption of the capitalist may bring
>it about that x - a is sufficient to procure the same means of satisfactions,
>etc. as before. A portion of the capitalist's revenue = a is thus set free
>and can now serve either to expand his consumption or be transformed back into
>
>capital (accumulation). Conversely, if x+a is required in order to continue
>with the same mode of life, either this expenditure must be restricted or else
>a portion of income = a that was previously accumulated must now be spent as
>revenue" (Karl Marx, _Capital_, Vol. III, Ch. 6, section 2, fourth paragraph,
>p. 206 of Vintage ed.).
>
>And here's what Ajit evidently thinks a "close reading" of it is:
__________________

I'll just comment on your bracketed statements to make it clear what a close
reading means.
>
>"Marx is talking about a total surplus value equal to x. A part of x goes
>into capital accumulation and another part goes into capitalist consumption.
>[I don't seem to see this stipulated.]

Look at the first sentence of the quotation: "... same mass of satisfaction,
etc. as before." What "etc." could stand here for? If the same mass of
satisfaction is already taken care of, then etc. could only stand for
accumulation. Thus x is already divided into revenue and accumulation. This
becomes even more clearer when one reads it in the context of the last
sentence of the quotation: "..."income = a that was PREVIOUSLY ACCUMULATED
must now be spent as revenue." Is it the case that you don't understand what
accumulation means, and so you don't understand such straight forward sentences?

So revenue is less than x to begin
>with. [I don't seem to see this stipulated.]

Now you should be able to see it.

Now if it becomes easier to
>produce the capitalist consumption goods [I don't seem to see anything about
>the production of capitalist consumption goods]

Well, luxury is generally considered capitalists consumption goods. Look at
the quotation again: "cheapening of those commodities". How does this
cheapening of those commodities come about? Anybody who knows CAPITAL knows
that this "cheapening" comes about because now it takes less labor-time to
produce those commodities. This is the general theme in Marx, and I expected
you to know this.

, then let's say "a" amount of
>labor is released [I don't seem to see anything about labor or its release
>here. I would have thought that since capitalists "procure ... means of
>satisfactions" with money, not labor, that "a" is an amount of money, not of
>labor]

Since the unit of surplus value is labor, it is quite appropriate to
interprete it as realease of labor. Moreover, since Marx is talking about
the realeased "amount" could be put either as increased accumulation or
increased consumption, it is employment of labor in different sectors is
being talked about here. Furthermore, since Marx uses the language "mass of
satisfaction", he obviously is not talking about a subjective mass in terms
of total utility but the physical mass of the luxury goods. To interprete
this in money terms would be a poor interpretation. But most interestingly,
given that you assume $1 = 1 hour of labor that remains constant, you should
have no problem whether one is using labor or money unit in this context.

after the system has produced same amount of goods and services it had
>produced in the previous case. [I don't seem to see anything about the overall
>amount of goods and and services produced in the system.]

"same MASS of satisfaction, etc. as before" is basically a reference to
physical goods and services. Mass of satisfaction would otherwise mean
something like total utility, which Marx was of the opinion that it cannot
be measured.

Now this "a" amount
>of labor [Which '"a" amount of labor? Marx's? Or yours?]

It is neither mine or Marx's labor. It is the amount of labor Marx is
talking about would be released in the system.

can be used in two
>ways: either it could go for increasing the rate
>of accumulation ["Rate"? I don't seem to see anything here about the *rate* of
>accumulation]

If the realeased labor from the luxury sector is put in increasing
accumulation, why shouldn't the rate of accumulation rise in this case?

or increasing the capitalist consumption (or a bit of both is
>also possible). [I don't seem to see anything in the text about labor
>allocation.]

By now you should have begun to see a few things.

"Conversely", if it becomes difficult to produce capitalists'
>consumption goods, the the situation is reversed. [I still don't seem to see
>anything in the text about the production of capitalist consumption goods.]

By now you should be aware of your blindness.

>This time to maintain the same rate of accumulation and the same amount of
>capitalists' consumption [I don't seem to see this tradeoff posed], x+a amount
>of surplus [surplus what?] would be needed. But since there is only x amount
>of surplus [surplus what?] in the system, either accumulation must go down by
>"a" amount or the capitalists' consumption go down by the "a" amount (or a bit
>on both sides adding up to "a") [To what part of the text does this clause
>refer?].

Surplus is surplus value. It refers to the last part of the quotation.

So x+a in Marx's example is not revenue. Marx is not talking about a
>situation where even simple reproduction will not be possible."
>
>I think this is not a close reading, but a symptomatic reading (_lecture
>symptomale_). It constructs Marx's problematic for him by imposing the
>Dmitriev-Tugan-Bortkiewicz-Sraffa conceptual framework upon nearly every word
>of the passage and upon the whole of it. Given that this is the way he reads,
>it is not surprising that Ajit "finds" Marx to be a precursor of Sraffa, nor
>that he "finds" Marx guilty of internal inconsistency.

By now you should know what a close reading means. You don't seem to see
anything, except just repeat the quotations, which means that you are unable
to get an understanding of Marx's writing.

>Again: algebraic symbols don't lie. x = surplus-value. a > 0. "x+a is
>required in order to continue with the same mode of life." Therefore, the
>capitalist needs to spend more than the whole of surplus-value "in order to
>continue with the same mode of life." If s/he does, not only x is spent as
>revenue, but a as well.

If the whole of x was consumed by the capitalists in the first case, then
what would the last part of the last sentence mean: "income = a that WAS
PREVIOUSLY ACCUMULATED..."? You see, you don't read Marx closely. Since it
is the accumulation that must go down in this case, it means that
accumulation was positive and so x was already divided into accumulation and
consumption.

>
>
>I'll also note that Ajit's post does not respond to the following:
>
>Ajit: "I doubt that this is what Fred's position is. How can one deny that a
>system could be run down to the ground."
>
>Fred doesn't deny that. He reasons this way, more or less:
>
>Marx states that the part of surplus-value spent on capitalist consumption is
>"revenue."
>Therefore, Marx defines the part of surplus-value spent on capitalist
>consumption as "revenue."
>Therefore, Marx defines "revenue" as the part of surplus-value spent on
>capitalist consumption.
>Therefore, "revenue" is a part of surplus-value.
>No part can be larger than the whole of which it is part.
>Surplus-value is the whole of which "revenue" is part.
>Therefore, "revenue" cannot be larger than surplus-value.

This is a very unsympathetic interpretation of Fred's reasoning by you. Why
should I comment on it? Fred should comment on it, not me.
>
>
>Ajit: "As far as your 'difference equation' is concerned. I must admit, I
>don't understand what is going on there."
>
>Why is "difference equation" in scare quotes? Do you deny that I wrote down a
>
>difference equation?
>
>The essence of the matter is very simple. The equation gives cyclical
>behavior for total value. In the expansionary phase of the cycle,
>surplus-value exceeds revenue, in the downturns the opposite occurs. The
>point is that this is *long run* behavior yet, because the system is not a
>*static equilibrium* system, the existence of revenue > surplus-value even in
>the long run does not mean that the system runs down into the ground, as you
>alleged that it did.
>
>Your mistake was to assume wrongly that, in the long run, stationary (growth)
>equilibria and breakdown are the only possibilities. You've made that mistake
>
>before. For instance, you confuse average prices with stationary equilibrium
>prices, though the two will be equal in general only if the system in question
>
>is a static equilibrium one. You also seem to argue at times that the mere
>persistence of a system in the long-run means that its behavior can be
>approximated by means of static equilibrium equations.

I have never understood your mathematics. By my standard they are simply far
out!

Cheers, ajit sinha