1. Murray's first point is that his main impression about
Marx's writing on the subject of the costs of unproductive labor
is that Marx did not fully resolve the problem of how these
costs should be allocated among the different components of
the price of commodities. He argues that Marx at least
considered the possibility of treating the costs of unproductive
labor as a part of the constant capital component of the price of
commodities, and that Marx should have developed this
interpretation further.
I agree in part that Marx did not work out fully and clearly all
the details regarding the costs of circulation and how these
costs affected the determination of the price of commodities.
However, I think that Marx was clear and consistent in his own
mind about the basic general principle (the "general law")
regarding the costs of circulation - that these costs are
"deductions from surplus-value". Marx used this same phrase
in all the various drafts of Capital: the Grundrisse in 1857-58,
the 1861-63 manuscript, the 1864-65 draft of Vol. 3, and the
1870 draft of Vol. 2.
Murray cites a few passages which he argues support his
interpretation that Marx also at times regarded the costs of
circulation to be a part of constant capital. However, none of
these passages explicitly says that the costs of circulation
should be treated as a part of constant capital, and these
passages can also be interpreted as consistent with Marx's
many statements that these costs are "deductions from
surplus-value." Therefore, I conclude that the textual evidence
strongly supports the standard interpretation. But further
consideration of this point will have to await another occasion.
2. Murray also suggests that the standard interpretation that
the costs of unproductive labor are a "deduction from surplus-
value" is closely associated with the underconsumption theory
of crises. I reject this "error by association". It is true that
some underconsumptionists have held this view (e.g. Sweezy);
but it is not true that all who hold this view are
underconsumptionists (e.g. myself, Shaikh, etc.). In other
words, it is not true that the standard interpretation
necessarily implies the underconsumption theory of crisis. I
myself have presented a type of falling rate of profit theory of
crisis, according to which an increase of unproductive labor is
one of the important causes of the falling rate of profit.
This is essentially the opposite of underconsumption theory. If
the cause of crises is underconsumption, then an increase of
unproductive labor can be a solution. However, if the cause of
crises is a decline in the rate of profit, then an increase of
unproductive labor cannot be a solution and may even be a
cause of the declining rate of profit (as I argue it was in the
postwar US economy). Therefore, any association which the
standard view of the costs of unproductive labor may have had
with underconsumption theory is irrelevant to the current
discussion.
It seems to me that Murray's interpretation falls somewhere in
between my interpretation and underconsumption theory.
According to MurrayÕs interpretation, rising unproductive labor
is not a solution to a fall in the rate of profit, but neither is it a
cause. Rather, unproductive labor simply has no effect at all
on the rate of profit. It is a part of the flow of constant capital
which is recovered out of the constant capital component of the
price of commodities. So these two different interpretations
come to very different conclusions concerning the effeects an
increase of unproductive labor. Obviously this is a very
important question which we should explore further in the
future.
3. Murray's third preliminary point is that his interpretation
emphaiszes that the costs of circulation play a contradictory
role relative to the rate of profit: their socially necessary
functions help sustain the rate of profit, but they require
additional investment. But Murray also states that the
additional investment required is only the flow of constant
capital and not the stock of constant capital, so this additional
investment has no effect on the rate of profit, as just discussed.
The standard interpretation, on the other hand, implies a much
stronger contradiction: these socially necessary functions
REDUCE the rate of profit.
4. Finally, Murray states that his interpretation has yielded
results that are broadly consistent with Marx's expectations
and that help make sense of the postwar Canadian economy. I
certainly want to study Murray's empirical analysis more
carefully; however, I have made a similar argument for my
interpretation and the US economy. So it seems like we should
compare our two empirical analyses and try to evaluate which
interpretation has the greater explanatory power.
Toward that end, Murray would you please send me (when you
get a chance) your latest 1996 paper, which I have not yet seen.
Also would you please send me your estimates of the following:
variable capital
and the before-tax wages of productive labor
surplus value, broken down into:
before-tax profit income
taxes on profit
surplus-value transferred to the state
(also some idea of how this latter is estimated)
constant capital, broken down into:
fixed capital
circulating capital
Maybe even send me a copy of your Masters thesis, if you still
have an extra copy.
My most recent paper is in the December 1997 of the RRPE
which I would be happy to send you if it is not otherwise
accessible to you.
I look forward to further discussion.
Comradely,
Fred