The following is a hastily written summary of my interpretation of the
issue of the production and realization of value and surplus-value in
Capita, which has been discussed in recent weeks. I have not had the time
to read all the recent posts on this issue, so it does not address all the
issues that have been raised. It is just an attempt to articulate my
general interpretation of Marx's treatment of this issue in the three
volumes of Capital, and to toss this into the discussion. It is very
sketchy and cryptic, with many points left and the textual evidence left
for later posts.
0. Marx's theory in Capital is at a high level of abstraction. I hope
that the following will explain what that means (or at least part of what
that means).
1. In Vol 1, the main question of the theory is the determination of the
total amount of surplus-value in the capitalist economy as a whole. The
main conclusion is that surplus-value is the monetary expression of surplus
labor. The total amount of surplus-value is determined in production,
prior to circulation, and is proportional to the total amount of surplus
labor (with the proportionality factor the inverse of the value of money).
In this theory of the total amount of surplus-value in Vol. 1, Marx assumed
that all commodities are sold at their value. Therefore, the total amount
of surplus-value realized is equal to the total surplus-value produced in
production.
2. In Vol. 2, Marx analyzed more closely the movement of capital through
the sphere of circulation and the specific forms of capital that arise in
the sphere of circulation (fixed and circulating capital, the turnover rate
of capital, etc.). In this analysis of the sphere of circulation, Marx
continued to assume that all commodities are sold at their value, i.e. that
all value and surplus-value produced in realized. Marx's purpose in Vol. 2
was not to explain realization crises, but to explain these specific forms
of capital.
The main point of Part 3 of Vol. 2, Marx's analysis of the reproduction
schemes, is his critique of "Smith's dogma", according to which the total
price of the total social product is entirely resolved into revenue, i.e.
into wages plus profit and rent.
(I have written a recent paper about this, "Marx's Reproduction Schemes and
Smith's Dogma", that I would be happy to send anyone interested). In this
analysis of reproduction and the critique of Smith's dogma, Marx continued
to assume that all commodities are sold at their value and thus that all
value and surplus-value produced is realized. The possibility of
realization crises is not relevant to the critique of Smith's dogma.
The possibility of realization crises is discussed by Marx in Section 11 of
Chapter 20 ("The Replacement of Fixed Capital") and in Chapter 21
("Extended Reproduction"). The main point of these sections is the
possibility of the disruption of reproduction arising from within the
process of reproduction itself - and especially the reproduction of fixed
capital. This was an important point, but Marx continued to emphasize the
critique of Smith's dogma and continued to assume in this critique that all
surplus-value produced is realized. And Marx continued to make this
assumption in Vol. 3.
3. The main subject of Vol. 3 is the distribution of surplus-value, i.e.
the division of the total amount of surplus-value - already determined -
into individual parts (or individual forms): industrial profit, commercial
profit, interest, and rent.
The main conclusion of Marx's theory of the distribution of surplus-value
is that all these individual parts of surplus-value are but specific
monetary expressions of surplus labor, i.e. that the source of all these
different forms of surplus-value (or forms of income to capital) is the
surplus labor of workers, and that these different forms of surplus-value
are NOT separate, independent sources of value and surplus-value. This
main point of Vol. 3 is summarized brilliantly by Marx in the final Part 7
("Revenue and its Sources").
One key aspect of the distribution of surplus-value is the equalization of
profit rates across branches of production, which of course involves the
determination of prices of production. Marx showed that, although the
prices of production of individual commodities diverge from their value,
this does not affect the total amount of value and surplus-value produced
(see my recent papers on the transformation problem). The total amount
value and surplus-value realized in circulation is equal to the total
amount of value and surplus-value produced in production. Again, the
possibility of realization crises is not relevant to the explanation of how
rates of profit are equalized.
As I have argued in recent posts, Marx's prices of production are long-run
"center of gravity" or "average" prices, not actual market prices.
Therefore, Marx is in effect assuming that S=D for each commodity as well
as for the economy as a whole. Marx's theory in Vol. 3 remains at a high
level of abstraction.
The other individual parts of surplus-value (commercial profit, interest,
and rent) are also explained on the assumption that the total amount of
surplus-value is taken as given, as determined by the prior analysis of
capital in general and production. In these parts of Vol. 3, Marx is not
trying to explain how realization crises may arise, but is rather
explaining how the different forms of surplus-value are monetary
expressions of surplus labor, on the assumption that all surplus-value
produced is realized (because realization crises are not relevant to the
explanation of the distribution of surplus-value).
3b. The other important subject of Vol. 3 is of course the falling rate of
profit. Here again, this tendency is derived on the basis of the
assumption that all the surplus-value produced is realized. The rate of
profit falls, not because of a realization problem, but because the total
amount of surplus-value produced falls in relation to the total amount of
capital invested (as a result of a rising composition of capital). A
falling rate of profit may cause a realization of surplus-value (because
capitalists do not invest and hold idle money), but the falling rate of
profit is not caused by a realization crisis from some other source.
CONCLUSION: Therefore, all three volumes of Capital are based on the
general assumption that all the value and surplus-value produced is
realized. Marx certainly recongized and even emphasized in places the
possibility of realization crises, but there is no systematic analysis of
realization crises, because realization crises are not relevant to the
Marx's main themes in Capital - the determination of the total amount of
surplus-value produced and the distribution of this total amount of
surplus-value into individual parts.
BEYOND CAPITAL: An important task beyond Marx's analysis of Capital is of
course to analyze further the possibility of realization crises. Remember
that, according to Marx's six-book plan, the analysis of crises was the
sixth and final book.
I would argue that, in the case of a realization crisis (i.e. if D<S in
the aggregate), then part of the value and surplus-value produced will not
be realized. Or, we could say that value that has been produced will be
destroyed. Value can be destroyed after production, but value cannot be
created after production. Other listmembers seem to be agreeing on this
point (although probably not all). So maybe we do not have too much of an
disagreement on this issue - although I suspect that the implications that
each of us draws from this point might be different. But the main
disagreement at this point seems to be the level of abstraction of Marx's
theory in Capital, especially Vols. 2 and 3.
I look forward to further discussion.
Comradely,
Fred