[OPE-L:3554] Re: money-capital as initial givens

From: Gil Skillman (gskillman@mail.wesleyan.edu)
Date: Mon Jul 03 2000 - 14:05:29 EDT

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This is a response to Fred's comments on his post 3543, concerning money
(and thus circulation) as the starting point for Marx's theory of capital.
I largely agree with Fred's characterization, but I have a couple of
caveats; Fred, I wonder how you'd respond to these.

>1. The circulation of capital is the overall analytical framework for
>Marx's theory, and is of course expressed symbolically as M - C - M', or
>in its expanded form as M - C ... P ... C' - M'. This "general formula
>for capital", it should be noted, BEGINS WITH MONEY, i.e. with M, a
>certain amount of money-capital invested to purchase means of production
>and labor-power. Therefore, this "general formula for capital" itself
>suggests (especially in combination with the textual evidence and other
>points discussed below) that the starting-point of Marx's theory, the
>initial givens with which the theory begins, are the quantities of
>money-capital, M, that initiate the circulation of capital, the process
>that Marx is analyzing. The purpose of Marx's theory, in a nutshell, is
>to explain how the given quantity of money-capital, M, increases its
>magnitude, i.e. becomes M + dM. As Marx put it in the
>"Results" manuscript (using in this passage x instead of M to stand for
>money): "The fact that the purpose of the process is that x should be
>transformed into x + dx also points to the path our own investigations
>should take." (C.I: 977)

1) Here and in another passage further below you describe the initial M in
the circuit of capital as being invested to "purchase means of production
and labor-power." My comment is that while this is on the whole
descriptively accurate, I do not think based on Marx's writing in Capital
and elsewhere that this should be considered a *definitional* aspect of the
circuit of capital M-C-M', insofar as it is possible for this circuit to
occur *without any purchase of the commodity "labor-power."* I don't know
if you intended this phrase as descriptive or definitional, but I'll
anticipate and indicate some factors that seem to me to work against the
latter characterization--

--Marx never mentions the term "labor power" when he defines the circuit of
capital in C.I: Ch. 4. Indeed, at the end of the chapter he accepts
merchant and usury capital--neither of which involve the purchase of
labor-power--as instances of the "general formula of capital (albeit "in
abridged form", in the latter case)."

--He corroborates this inclusion in a passage from the Resultate, a source
you also cite:

"In India, for example, the capital of the *usurer* advances raw materials
or tools or even both to the immediate producer in the form of money. The
exorbitant interest which it attracts, the interest which, irrespective of
its magnitude, it extorts from the primary producer, is just another name
for surplus-value. It transforms money into capital by extorting unpaid
labour, surplus labour, from the immediate producer." [C.I: 1023]

He then makes a parallel characterization of the putting-out form of
merchant's capital in the next passage.

There are a number of other passages from C.III, the Grundrisse, and the
Economic Manuscript of 1861-63 that support this characterization.

--These forms of merchant and usury capital are fully consistent with
Marx's notion of "general formula of capital"
M-C-M' so long as this circuit is understood from the standpoint of the
system or the transforming capital itself, rather than from that of the
particular capitalist who initiates the circuit of capital.

>2. This interpretation is further supported by the logical structure of
>Parts 1, 2, and 3 of Volume 1 of Capital. In Part 1, money is derived as
>the necessary form of appearance of the value of commodities. In Part 2,
>capital is defined in terms of this previously derived concept of
>money: as money that becomes more money, i.e. as M - C - M'. Part 3 then
>analyzes the origin of the increment of money that is characteristic of
>Parts 1 and 2 provide the logical presuppositions (the "givens") for
>Marx's theory of surplus-value in Part 3 and beyond. Marx did not
>suddenly in Part 3 ignore the prior logical development of money and
>capital in Parts 1 and 2 and introduce out of nowhere the technical
>conditions of production and the real wage as the initial givens in his
>theory of surplus-value in Part 3.
>The Sraffian interpretation, on the other hand, has no explanation for
>Marx's analysis in Parts 1 and 2 or for the logical relation between these
>two parts and the theory of surplus-value in Part 3. These key parts of
>Volume 1 are usually just ignored by this interpretation, and Marx's
>theory is turned into Sraffa's theory, starting with the technical
>conditions of production and the real wage.

But isn't it reasonable to imagine that, since the issues raised in Parts 1
and 2 were evidently not Sraffa's concern, that he took Marx's analysis of
these issues as either given or beside the point? There was no need for
Sraffa to reinvent Marx's wheel in order to develop his arguments
concerning the nature of commodity production. Under this interpretation
it's not a matter of turning "Marx's theory...into Sraffa's theory," it's
using Sraffa's theory to address portions of Marx's argument to which it is
directly relevant. If the origin of capital in circulation is not at issue
in Sraffian analysis, what would be the point of addressing it one way or
the other?

>Another related aspect of the logical structure of the first three parts
>of Volume 1 is that Parts 1 and 2 are about the "sphere of
>circulation" and Part 3 begins Marx's analysis of the "sphere of
>production" (with the famous passage at the end of Part 2 about moving
>from the "noisy sphere of circulation" to the "hidden abode of
>production" marking the transition between these two stages of the
>analysis). Marx argued that, in his theory of capital, the analysis of
>circulation is a necessary prelude to the analysis of production because
>the circulation of capital begins in the sphere of circulation; it begins
>with the purchase of means of production and labor-power by a certain
>quantity of money-capital in the sphere of circulation, i.e M - C. Again,
>Marx's prior analysis of the sphere of circulation in Parts 1 and 2
>provides the logical presuppositions (the "givens') for his later analysis
>of the sphere of production in Part 3 and beyond.
>Marx emphasized that the means of production do not simply enter
>capitalist production as physical goods or as use-values; rather they
>enter capitalist production through circulation, as commodities, with
>prices; i.e. they have been purchased with a certain amount of
>money-capital in the sphere of circulation. This quantity of
>money-capital that initiates the circulation of capital prior to
>production are the initial givens, the starting-point of Marx's
>theory. As Marx put it succinctly in the "Results": "the means of
>production enter production as COMMODITIES, i.e. as MONEY." (C.I: 952)
>Again, the Sraffian interpretation of Marx's theory completely ignores
>this initial analysis of the circulation of capital in the sphere of

[as being beside the point of its critique]

>and implicitly assumes that capital first appears, not in
>circulation, but in production, as the physical inputs to

This doesn't necessarily follow. Nothing in the Sraffian structure is
inconsistent with Marx's dictum that capital has its origin both within and
without the sphere or circulation. But it must be *both.* Furthermore,
Sraffian theory implicitly acknowledges the role of circulation in treating
prices of production, since prices are intrinsically phenomena of exchange
rather than production.

> This is clearly not Marx's logical method in the first three
>parts of Volume 1. The initial quantities of money capital that provide
>the givens in Marx's theory of surplus-value come from circulation, not
>from production.

>3. Finally, this interpretation is strongly supported textually by
>numerous passages throughout the various drafts of Capital in which Marx
>explicitly stated that the money-capital which initiates the circulation
>of capital is the "PRESUPPOSED capital" or the "POSTULATED capital" or the
>"STARTING POINT" or the "POINT OF DEPARTURE" for his analysis of the
>circulation of capital and the production of surplus-value. These
>references can be found in Chapter 4 of Volume 1 of Capital and in the
>earlier drafts of this chapter in the Grundrisse (G: 250-64) and in the
>"1861-63 Manuscript" (Marx-Engels Collected Works, vol. 29,
>pp. 501-07; and vol. 30 pp. 9-20 and 66-75). There are also numerous
>similar passages in the "Results" manuscript. One especially clear
>passage is the following:
>"Here, where we are concerned with MONEY only as the POINT OF DEPARTURE
>for the immediate process of production, we can confine ourselves to the
>observation: capital exists here as yet only as a GIVEN QUANTUM OF VALUE =
>M (MONEY), in which all use-value is extinguished, so that nothing but the
>monetary form remains... If the ORIGINAL CAPITAL IS A QUANTUM OF VALUE =
>X, it becomes capital and fulfills its purpose by changing into x + dx,
>into a quantum of money or value = the original sum + a balance over the
>original sum. In other words, it is transformed into the GIVEN AMOUNT OF
>MONEY + additional money, into the GIVEN VALUE + surplus-value.... As a
>GIVEN SUM OF MONEY, x is a constant from the outset and hence its
>increment = 0. In the course of the process, therefore, it must be change
>into another amount which contains a variable element. Our task is to
>discover this component and at the same time to identify the mediations by
>means of which a constant magnitude becomes a variable
>one. (C.I: 976-77).
>Nowhere that I know of did Marx refer to the means of production as the
>"givens" or the "starting point" for his analysis of the circulation of

Well, he identifies a *dual* starting point for capital at the end of Ch.
5: partly in circulation, but also "for [surplus value] to be formed,
something must take place in the background which is not visible in the
circulation itself." [C.l: 268]. That "something" is, of course,
production, involving the use of means of production in generating more
labor in the output than is embodied in the means of production and labor
capacity expended. As you point out, we find out about this in C. I, Part
3 and beyond; so one interpretation of Sraffian analysis is that it takes
up Marx's story beginning in Part 3.

>Either Marx, who it should be remembered had a Ph. D. in
>Philosophy and paid a great deal of attention throughout the various
>drafts of Capital to questions of logical method, was extremely sloppy in
>these many passages, or (which seems to me by far more
>reasonable) Marxintended the usual methodological meanings for the terms
>"given," "postulated," "presupposed," etc. - i.e. that they are the
>initial data with which his theory begins.

[As an aside,] Can we also infer that Marx, with his Ph. D. in Philosophy
and his great deal of attention paid to questions of logical method,
intended the "usual methodological meanings" for terms like "therefore"
"has to be", and "must"? Specifically, as indicating logical necessity in
the context of a deductive argument?

>4. Constant capital and variable capital are then defined in Chapter 8 of
>Volume 1 as the two components of the money capital (M) that initiate the
>circulation of capital. In other words, M = C + V. Constant capital is
>the money capital used to purchase means of production and variable
>capital is the money capital used to purchase labor-power. The key point
>to be emphasized again is that constant capital and variable capital, like
>the general concept of capital of which they are component parts, are
>taken as given in terms of money.
>I would of course appreciate comments, questions, criticisms, etc.

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