[OPE-L:3573] Re: Re: Re: Re: money-capital as initial givens

From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Fri Jul 07 2000 - 09:59:30 EDT

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Gil, thanks for your messages. I don't have time for a full response, but
below is a quick response to one key point.

On Mon, 3 Jul 2000, Gil Skillman wrote:

> The necessary inconsistencies in Marx's account are readily seen.
> First, grant that, for the purposes of Ch. 9 in V. III, constant and
> variable capital are represented in their price-form rather than their
> value form; that is, they've *already* been transformed from the value
> terms by which they were defined in V. I to the cost terms by which
> capitalists actually experience them. Next, grant that capitalist
> competition will equate the *rate of exploitation* across sectors,
> i.e. ensure that
> (1) Si/Vi = e for all i,
> where Si is surplus value in sector i, Vi is variable capital in sector i,
> and e is the constant rate of exploitation across sectors.
> Now in light of these two givens, the "product values" in the first table
> (p. 255) must be understood as *product prices* under a system of
> capitalist competition that ensures equal rates of exploitation. There's
> no other coherent way to interpret them, since constant and variable
> capital are in price-form by assumption, and capitalist competition--which
> is based on prices, not values--equalizes the rate of exploitation by
> assumption. This dictates in turn that for each sector i,
> (2) Ci + Vi(1+e) = Pi for all i,
> where Ci is the price-form of constant capital in sector i and Pi is the
> commodity price in sector i following from the conditions stated above.
> But next Marx asserts that capitalist competition must *also* equate the
> rates of profit across sectors. If Ci and Vi are interpreted as *already*
> transformed into their price-form, per Fred and the passage quoted above,
> this means that
> (3) Si/(Ci +Vi) = r for all i,
> where r is the economy-wide rate of profit induced by capitalist competition.
> But since this is a consequence of capitalist competition, enacted in the
> price-world, it must then be that (ignoring, by Marx's stipulation at the
> beginning of the chapter, any complications from unequal rates of
> depreciation of constant capital goods)
> (4) (Ci + Vi)(1+r) = Pi for all i.
> Here, the Pi are "officially" the sectoral "prices of production" as Marx
> defines them on p. 257. *If* we accept, however, that constant and
> variable capital inputs have already been transformed into their price-form
> (a transformation that Marx fails to demonstrate), then the Pi's must
> simultaneously satisfy equations (2) and (4). It is readily shown that
> this is only possible if organic compositions are identical across sectors,
> which of course *contradicts* Marx's original stipulation. There's no way
> around this other than denying that capitalist competition equates sectoral
> rates of exploitation (or something similar) or denying that the constant
> and variable capital inputs were "really" transformed.
> On the other hand, if we *don't* require that capitalism satisfies (2) and
> (4) in the price world--that is, if we give up on the notion that
> capitalist competition (and thus capitalist prices, N.B.) equates the rate
> of exploitation, then Marx's aggregate equalities fail to hold.
> So necessarily *either* Marx's "transformation" is in error, or the central
> conclusion of his "transformation" is erroneous. Either way, Marx's
> analysis of the "transformation" includes a fundamental error.
> Gil

There is no contradiction between equations (2) and (4) if equation (2) is
understood to apply to the economy as a whole (i.e. to capital in
general), as I have argued in several papers. Equation (2) (or an
equation similar to it in my papers) determines the total amount of
surplus-value and the rate of profit, which then is taken as given in
the determination of individual prices of production in equation (4).


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