From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Sat Sep 21 2002 - 18:02:21 EDT
Dear Fred, Entertain the possibility of a willfully blinkered understanding of what Marx, you, Michele and I have been trying to say. One may not want to understand why Michele, you and I are saying there would tend to be extra surplus value in the gold industry (lower than average OCC as a result of i. the use of little to no raw materials in the extraction of precious metals as Marx emphasizes, ii. economic disincentives for large investment on scarce, privately owned land for which the lease cannot be counted on to last as long as long lived fixed capital, iii. value of gold being set at marginal mine which will tend have the most labor intensive technique of production as you have underlined though I am not clear about this, iv. inherent technical difficulties in raising the capital intensity of in agriculture and mining etc.) and why instead of being competed away this extra surplus value would tend to be appropriated by the owner of the land which is an inherently scarce means of production as absolute rent even as the gold capitalists themselves tend to make the average rate of profit. Of course demand may not be strong enough for the full extra surplus value in the gold industry to be realized but given that gold is immediately exchangeable there seems little reason to doubt that the extra surplus value would in fact tend to be realized. Whether there is place for absolute rent in Sraffa's framework, the point remains that M'-M/M in the numeraire/money producing sector should not be set equal to the uniform profit rate. Aside from the reason of absolute rent, there is little chance that output can be varied to regulate supply towards the end of equilibriating the exchange value of gold to its value or price of production but my point is a digression from the main argument here. More importantly, the dubious assumption that the money commodity is like any other commodity in that M'-M/M in gold production should tend to be equal to M'-M/M in the bulk of commodity producing branches was shared by both Malthus and Ricardo who both did not grasp the contradiction between or the mutual exclusivity of or polarization of commodities and money. Money is not like any other commodity even when money is a commodity, and one aspect in which it is distinguished is in that its exchange value is not determined in the same way as the bulk of commodities. At any rate, the assumption that the money commodity would have a price of production was shared not only by Malthus and Ricardo but by Ricardo's followers Bortkiewicz and Sraffa in the latter's construction of the standard commodity as an invariable standard of value. Once this assumption is dropped and the standard commodity with it, what is left of the Sraffian theory? All the best, Rakesh
This archive was generated by hypermail 2.1.5 : Mon Sep 23 2002 - 00:00:01 EDT