[OPE-L:3593] Re: constant capital and variable capital

From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Fri Aug 04 2000 - 10:15:12 EDT

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Hi Ajit,

Thanks for your (3592) in response to my earlier post. I think we need to
return to some fundamental issues before we can deal with constant capital
and variable capital. So I will briefly summarize the starting point of my
interpretation of Marx's theory, and you please tell me what you think.

1. The general analytical framework of Marx's theory is the CIRCULATION OF
CAPITAL, expressed symbolically as M - C - M' (or expanded to include
production). This is what Marx's theory is all about. This analytical
framework is introduced in Chapter 4 of Volume 1 ("the general formula for
capital") and maintained as the focus of Marx's theory throughout. Marx's
analytical framework is NOT "the production of commodities by means of
commodities", expressed in physical quantities and input-output matrices.
(M-C-M') is not just a minor illustration, with no significance for Marx's
theory and Marx's analytical framework. (M-C-M') IS Marx's analytical
framework. It is the way that Marx posed and analyzed the main questions
in his theory.

2. It is clear from the "general formula that capital is defined in terms
of MONEY, as money that becomes more money. Capital is NOT defined in
terms of LABOR-VALUES, and especially not in terms of labor-values alone,
without any relation of money quantities. Of course, all money quantities
represent labor-values (this is the main conclusion of Part 1 of Volume 1),
and so do the quantities of money that circulate as capital. But capital
is defined in terms of money, not in terms of labor-values, unrelated to
money quantities. The title of Part 2 is "The Transformation MONEY into
capital" (a phrase that Marx uses repeatedly); it is not "the
transformation of labor-values into capital."

3. Surplus value is also defined in Chapter 4 in terms of MONEY, as the
increment of money, dM, that emerges at the end of the circulation of
capital (pp. 251-52).

4. The main objective of Marx's theory in Volume 1 is to explain the
determination of dM , or surplus value, for the economy as a whole. The
main objective is not to explain the determination of surplus-labor-time,
unrelated to dM.

Marx's theory of surplus-value, presented in Chapter 7 of Volume 1, is
expressed in terms of money, that are determined by quantities of
labor-time. In the end, 27 shillings is converted into 30 shillings, with
dM = 3 shillings. This increment of money is what the theory is intended
to explain. Marx expressed the conclusion of his theory of surplus-value,
clearly and explicitly in terms of money: "The trick has at last worked:
MONEY has been transformed into capital" (p. 301)

5. Money magnitudes are assumed by Marx to be determined by labor-values,
in a somewhat complicated way, that I will be happy to discuss later. But
the point here, to begin with, is that Marx's theory in Volume 1 is NOT
about the determination OF labor-values, unrelated to money magnitudes.
Rather, the theory is about the determination of money magnitudes, and
especially dM, BY labor-values.

Ajit, what do you have to say about all this? How do you interpret the
"general formula for capital", the "transformation of money into capital",
Marx's theory of surplus-value in Chapter 7, etc.?

Thanks very much for the discussion. This may take a while, but it may
indeed serve to clarify our differences.


P.S. I would of course be interested in other people's views on these

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