[OPE-L:3592] Re: Re: constant capital and variable capital

From: Ajit Sinha (ajitsinha@lbsnaa.ernet.in)
Date: Wed Aug 02 2000 - 09:11:24 EDT

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Fred B. Moseley wrote:

> Hi Ajit,
> This is brief and partial response to your (3588), in response to Duncan's
> (3587). I am afraid that we disagree so completely that discussion may be
> difficult, but let's see.


Hi, Fred! I just came back from Delhi, and found your response in the mail. I
don't think discussion will be difficult. But let's see.

> Fred:
> I would like to focus first on the question of the DEFINITION of constant
> capital and variable capital. I will be happy to discuss later the
> question of the DETERMINATION of the magnitudes of constant capital and
> variable capital, but I would first like to focus on the prior question of
> the definition of these two key components of capital in Marx's theory.
> I argue that Marx defined constant capital and variable capital in terms of
> MONEY - as the quantities of money-capital invested in the first phase of
> the circulation of capital to purchase means of production and labor-power,
> respectively. In other words, constant capital and variable capital are
> the two components of the money-capital M that initiates the circulation of
> capital: M - C - M' (i.e. M = C + V). Capital itself is defined in terms
> of money, as money that becomes more money (the title of Part 2 of Vol. 1
> is "The Transformation of MONEY into Capital"); therefore, these two
> components of capital are also defined in terms of money (as indeed are all
> the components of capital).
> I think the textual evidence for this monetary interpretation of the
> definitions of constant capital and variable capital is overwhelming: the
> monetary nature of the circulation of capital, the initial definitions of
> constant capital and variable capital in Chapter 8 of Vol. 1, discussions
> and numerical examples throughout the three volumes, etc.


Fred, May be we are reading two different books! Let's just begin with the
beginning of the chapter 8.

"The various factors of the labour process play different parts in forming the
value of the product." (Marx). My commentary: By the way, the "factors of
labour process" here are not money but physical goods. Let us continue with

"The worker adds fresh value to the material of his labour [not money] by
expending on it a given amount of additional labour, no matter what the
specific content, purpose and technical character of that labour may be. On the
other hand, the value of the means of production used up in the process are
preserved, and present themselves afresh as constituent parts of the value of
the product; ..." (Marx).

My comment: Now, you may ask, what does "value of the means of production
mean"? Now, earlier in *Capital* "value" is defined in no uncertain terms as:

"How, then, is the magnitude of this value to be measured? By means of the
quantity of the 'value forming substance', the labour, contained in the
article. This quantity is measured by its duration, and the labour-time is
itself measured on the particular scale of hours, days etc." (Marx). Where does
money figure here, Fred?

Anyway, let's go back to chapter 8 and see what Marx has to say about the value
of constant capital.

"We saw, when we were considering the process of creating value, that if a
use-value is effectively consumed in the production of a new use-value, the
quantity of labour expended to produce the article which has been consumed
forms a part of the quantity of labour necessary to produce the new use-value;
this portion is therefore labour transferred from the means of production to
the new product." (Marx).

I could go on quoting the whole of chapter 8 as a direct refutation to the kind
of definition of constant capital Fred is attributing to Marx. As a matter of
fact, there is not one iota of evidence in chapter 8 that supports Fred's
position. Not an iota!

In anycase, in my opinion the kind of thing under dispute here is something
that need not be settled by quotations from Marx. What we need to see is that
whether Fred's proposal makes any sense or not. If it does not make any sense,
then it should be rejected on that ground solely. In my earlier post I gave a
simple case of corn production where seed corn and labor is used to produce
corn. Now, Fred's proposal suggests that the value of the constant capital seed
corn should be measured by the money price of corn multiplied by the 'value of
money' as derived by the NI approach. Now, given the money price of corn, we
have determined the value of corn in this case without any reference to the
live labor-time or the S+V element of the value of corn. This means that one
can work out examples where values of corn could remain the same even when its
technology of production (i.e. direct and indirect labor time needed to produce
it) is changing. Fred's proposal makes such examples much easier because he, or
the NI approach, does not even have a theory of determination of money prices.
They just take it as "given". It is simply not clear what this game of
converting "given" money quantities into labor quantities is about. What does
one gain by multiplying those given money quantities by some constant? And what
kind of theory is this?

> Fred:
> ...
> The monetary magnitudes of constant capital and variable capital may be
> DETERMINED by labor-times (i.e. proportional to the labor-times embodied in
> the means of production and the means of subsistence); as mentioned above,
> I will discuss this later.


I would like to understand this, Fred. So let's concentrate on this from now
on. Cheers, ajit sinha

> Comradely,
> Fred

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