I am back in Tepoztlan for 2 weeks before driving back up to Massachusetts,
and will try to squeeze in a few OPEL posts. This is a belated reply to
Andrew's (5261), defending K-M's concept of "revenue".
A. K-M'S CONCEPT OF "REVENUE" AND THE TRANSFORMATION PROBLEM
1. K-M's concept of "revenue" in their interpretation of the
transformation problem (i.e. of Marx's determination of prices of
production) is an INTER-period difference between the price of the output
in one period [P(t)] and the constant capital [C(t+1)] and variable capital
[V(t+1)] invested in the NEXT period; i.e.
(1) Rev(t, t+1) = P(t) - [C(t+1) + V(t+1)]
2. I have argued that Marx NEVER defined revenue in this way, i.e. as this
INTER-period difference expressed in equation (1).
3. Most importantly, I have argued that Marx NEVER utilized KM'S concept
of revenue in any of his discussions of the determination of prices of
production. Therefore, for this and other reasons, I have concluded that
K-M's interpretation of Marx's determination of prices of production, as a
multi-period process involving in a crucial way their concept of "revenue",
is wrong; i.e. is a misinterpretation of Marx' theory of prices of
production.
4. Andrew has never provided any evidence (including in his most recent
posts) that Marx EVER defined revenue as K-M's INTER-period difference, in
Marx's discussions of prices of production or otherwise
5. Instead, Andrew has responded on a narrower point which is irrelevant
to Marx's determination of prices of production: whether Marx in one
passage from Chapter 6 of Vol. 3 used revenue in a way that can be greater
than surplus-value.
However, this narrow argument - which I will discuss below - is completely
beside the point at issue because: (1) the concept of revenue in Chapter 6
is NOT THE SAME as K-M's concept of "revenue" (see part B below) and (2)
Marx's very brief discussion of revenue in Chapter 6 has nothing to do with
Marx's determination of prices of production.
6. Jerry asked the right question in responding to Andrew's (5261):
"what does all this have to do with the transformation problem?"
Andrew has not yet answered Jerry's question, or my similar earlier questions.
B. REVENUE IN CHAPTER 6 OF VOLUME 3
With regard to Andrew's narrow and irrelevant argument that Marx once used
revenue in a way that can be greater than surplus-value in Chapter 6 of
Volume 3, my response is the following:
1. Marx defined the concept of revenue in several different ways. Marx's
main definition of revenue is a PART OF SURPLUS-VALUE, where surplus-value
(S) is defined as the INTRA-period difference between the price of the
output in one period [P(t)] and the constant capital and variable capital
invested in the SAME period [C(t) + V(t)]; i.e.
(2) S(t) = P(t) - [C(t) + V(t)]
For one of many examples of this concept of revenue, see Chapter 24,
Section 3 of Volume 1 ("The Division of Surplus-value into Capital and
Revenue"). Revenue in this sense, as all or part of surplus-value CANNOT
be greater than surplus-value. This is the defnition of revenue that I
have been talking about - Marx's main definition.
2. I have also noted that Marx also sometimes used revenue in a second
sense -
in the sense of the classical economists - as total income ( = wages +
profit + rent). This is the concept of revenue in Part 7 of Volume 3
("Revenue and its Sources") and in the earlier draft of this part in the
1861-63 manuscript and occasionally in other passages.
3. In the sentences quoted by Andrew from Chapter 6 of Volume 3, Marx
appears to use revenue in yet another third sense and in a sense in which
revenue can be greater than surplus-value. However, I will show below that
even this third sense of revenue in these few sentences - which have
nothing to do the transformation problem - is still not the INTER-period
difference of K-M's concept of "revenue".
4. The sentences quoted by Andrew in Chapter 6 are the following:
"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."
5. In this passage, revenue seems to be implicitly defined as money spent
by capitalists to purchase consumer goods, whether or not this money is
surplus-value. If the price of capitalist consumer goods increases, then
the surplus-value produced in period t will not be sufficient to purchase
all the consumer goods produced in period t. So, if all the consumer goods
are to be purchased, additional money, beyond the surplus-value of this
period, must come from somewhere. This concept of revenue can be
expressed algebraically as:
(3) Rev(t) = S(t) + M(t),
where M(t) is the additional money necessary to maintain capitalist
consumption.
So this is a more general concept of revenue than Marx's main concept of
revenue discussed in B.1 above. Revenue here seems to be ALL the money
spent to purchase capitalist consumer goods, rather than just the
SURPLUS-VALUE spent to purchase capitalist consumer goods. In this more
general sense, revenue can of course greater than surplus-value.
However, this more general concept of revenue is NOT THE SAME as K-M's
concept of "revenue", as the INTER-period difference expressed in equation
(1). This more general concept of revenue in Chapter 6 is an INTRA-period
SUM, rather than an INTER-period DIFFERENCE. Equation (3) is completely
different from equation (1).
7. Finally, and once again, this more general concept of revenue,
discussed very briefly in Chapter 6, plays no role in Marx's determination
of prices of production, in Part 2 of Vol. 3, or in any of Marx's other
discussions of prices of production. Therefore, these few sentences from
Chapter 6 provide no support whatsoever for K-M's concept of "revenue" in
their interpration of Marx's determination of prices of production. These
sentences are completely irrelevant to their interpretation. Andrew has
still not provided evidence: (1) that Marx ever defined revenue as K-M's
INTER-period difference and especially (2) that Marx ever utilized their
concept
of "revenue" in his determination of prices of production.
Thus we see that the answer to Jerry's question "what does all this have to
do with the transformation problem?" is: nothing.
Comradely,
Fred