[OPE-L:3489] Re: Re: Re: measurement of value

From: Steve Keen (stevekeen10@hotmail.com)
Date: Tue Jun 13 2000 - 00:00:32 EDT

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Steve "spanner in the works" Keen here; just thought it worth mentioning
some discussions by Marx on the concept of effective demand. They are better
detailed in Groll's "The active role of `use value' in Marx's economics"
(*History of Political Economy*, Vol 12 No. 3, 1980, pp. 336-371), but the
gist is the following.

The keyt areas for his discussion are the *Grundrisse*--In Notebook IV pp.
404-24, Notebook VI pp. 678-80, and "Capital as Fructiferous" in Notebook
VII, p. 745-60. It is partially developed in Chapter 15 of Volume III of

His basic proposition is that the production process appears to provide no
bounds to the conversion of surplus value, so that a focus on this circuit
alone can imply that capitalism is free of crises: "Inside the production
process, realisation appeared totally identical with the production of
surplus labour ... and hence appeared to have no *bounds* other than those
... posited within this process itself". (*Capital*, Vol III, pp. 404-05).)

However there are many "barriers" to the conversion of surplus value into
profit. In the sphere of production, exchange value is all that matters and
use-value is irrelevant; yet to convert the exchange value embodied in
commodities into money, the products must actually be use-values when
transferred to the sphere of circulation. This is both in an individual
sense as useful objects, and in a mass sense in the proportion of output to
total demand. Further, in a setting of expanded reproduction the new value
created must be met by a matching expansion of aggregate demand. The
accumulation of capital can lead to failures in aggregate demand, since this
accumulation can change the
distribution of income between capitalists and workers on which the vector
of outputs was based. These barriers restrict the "*general tendency of
capital*"(*Grundrisse*, pp. 415-16.) to expand ncessantly, leading to
crises and overproduction. A failure of aggregate demand to grow
sufficiently to match the creation of new value, or disproportionality in
the growth of different sectors are among the factors internal to capitalism
which can lead to the value
generated in production not being realised in circulation.

Relevant cites include, from Vol III:

The entire mass of commodities, ... including the portion which replaces
constant and variable capital, and that representing surplus-value, must be
sold. If this is not done, or done only in part, or at prices below the
prices of production, the labourer has indeed been exploited, but his
exploitation is not realised as suchc for the capitalist... The conditions
of direct exploitation, and those of realising it, are not identical... The
first are only limited by the productive power of society, the latter by the
proportional relation of the various branches of production and the consumer
power of society. But this last-named is not determined either by the
absolute productive power, or by the absolute consumer power, but by the
consumer power based on antagonistic conditions of distribution,
which reduce the consumption of the bulk of society to a minimum
varying within more or less narrow limits." (p. 244.)


>From: Paul Cockshott <wpc@dcs.gla.ac.uk>
>Reply-To: ope-l@galaxy.csuchico.edu
>To: Andrew@lubs.leeds.ac.uk, ope-l@galaxy.csuchico.edu
>Subject: [OPE-L:3486] Re: Re: measurement of value
>Date: Mon, 12 Jun 2000 12:12:55 +0100
>At 11:17 12/06/00 +0100, Andrew Brown wrote:
>>Regarding the theory of demand:
>>is there really much more to say, at the *abstract* level (ie
>>generalising over all markets in the manner of microeconomics),
>>than banalaties:
>I agree, but that statement is from the standpoint of a classical
>marxian view of the theory of value - that it is determined in
>production not by market conditions.
>I was just supporting Ajits point that if you think marx was saying
>demand was important to the determination of value, why did
>he not analyse it.
>My take on it is that demand is not important to the determination
>of value except in the case of marginal land, and that this was
>also the position of Marx. Rakesh has been arguing that commodities
>only have value once there is sufficient effective demand for them
>to sell. If that is the case, then one needs a theory of effective demand
>to get a coherent system.
>By the way part of this may be terminological, Rakesh sees commodities
>prior to sale as having potential value. I would say they have value
>which has a big influence on their likely exchange value, so that
>if we systematically relabel all uses of the unqualified noun value
>in what I write with the phrase 'potential value', what I am saying will
>be translateable without loss of meaning into a format acceptable
>to Rakesh.

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