# [OPE-L:3604] Re: Re: Re: Re: Re: constant capital and variable capital

From: Rakesh Bhandari (bhandari@Princeton.EDU)
Date: Sun Aug 06 2000 - 03:21:12 EDT

Ajit, ok I have some free time, so let me to try to clarify what I am
getting at. I think your question was a great one, and that I did not

OK, here is my example again:
>Rakesh Bhandari wrote:

>>
>> \$MP C V SV costprice value pp
>> 80 70 20 20 100 110 124
>> 60 70 30 30 90 130 112
>> 90 85 15 15 105 115 131
>> 50 55 25 25 75 105 93
>> _______________________________________
>> 280 280 90 90 370 460 460
>>
>> Rate of profit is 24%.

You then asked me the excellent question:

"How did you calculate your c and v and what are their units?"

What I am trying to show in the above example is the value transferred from
the inputs is the paid and unpaid labor actually objectified in the means
of production (C), not the value represented by the money that the
capitalist advanced at the start of the circuit to purchase those inputs
(tendentially) at their prices of production (\$MP).

Secondly, I am claiming however that the variable capital is indeed the
money sum invested to hire workers and pay wages. Of course this well tend
to be determined by the money price of the wage goods needed for the
workers' reproduction.

Of course you could say that variable capital cannot be determined unless
we already have a set of prices from which we can then determine the wages
needed for workers to buy the goods they need. This is an objection to
which I should like to return at a later date if indeed you or someone else

Thirdly, I am saying that the cost price for the capitalist is obviously
the variable capital, so defined, plus the money advanced at the start of
the circuit for inputs at their prices of production. What else would the
cost price be for an individual capitalist?

And it is on the basis of cost price that profit is appropriated.

Fred would now argue that in the case of c the value category is not in
terms of the value of the money advanced while in the other case (v) it
is.

Is this a contradiction? Fred and Alejandro R (as well as Carchedi and
Mattick Jr) all argue that it is, so that c, like v, must be defined in
terms of the value of the money advanced for both c and v.

But then what have they done? "If the cost price of a commodity is equated
with the value of the means of production used up in producing it, it is
always possible to go wrong."

And their interpretation goes wrong in exactly that way since they are
equating c (the value of the means of production used up in producing a
commodity) with price of the means of prod which goes into the cost price
of a commodity.

I'll leave it there, and look forward to any questions.

All the best, Rakesh

>>
>> >"It was originally assumed that the cost price of a commodity equalled the
>> >*value* of the commodities consumed in its production. But for the buyer
>> >of a commodity, it is the price of production that constitutes its cost
>> >price and can thus enter into forming the price of another commodity. As
>> >the price of production of a commodity can diverge from its value, so the
>> >cost price of a commodity, in which the price of production of other
>> >commodities is involved, can also stand above or below the portion of its
>> >total value that is formed by the value of the means of production going
>> >into it."
>> >[C.III: 264-65]
>>
>> Quoted by Gil.
>>
>> Yours, Rakesh

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