[OPE-L:3611] Re: Re: Re: constant capital and variable capital

From: Gil Skillman (gskillman@mail.wesleyan.edu)
Date: Mon Aug 07 2000 - 14:57:47 EDT

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Concerning this exchange between Fred and Paul Z.:
>On Sat, 5 Aug 2000, Paul Zarembka wrote:
>> >5. ... 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.
>> Huh?
>> I must be missing something. Paul Z.
>Paul, why is this so hard to understand? Marx's theory in Volume 1
>attempts to explain the monetary phenomenon of dM. The explanation
>is in terms of labor-times. dM is proportional to surplus-labor-time.
>Volume 1 is not about surplus-labor-time by itself, unrelated to dM.
>You may disagree with this interpretation, but don't you agree that this
>is at least a possible interpretation? And, I would add, an
>interpretation for which there is substantial textual support,
>which I would be happy to continue to examine.

Here are 4 statements, in increasing order of restrictiveness, that one can
glean from Capital concerning the connection between labor values and
prices and/or surplus value and capitalist profit.

1) Capitalist profit corresponds to surplus value, which corresponds to
capitalist exploitation of labor.

2) It is necessary, or at the least very important for analytical
purposes, to explain the existence of capitalist profit on the basis that
commodity prices and labor values are proportional. On this basis,
capitalist profit is clearly seen to correspond to surplus value, which
corresponds in turn to capitalist exploitation of labor.

3) Commodity prices are "regulated" by their respective labor values, such
that divergences of prices from values can be considered "accidental
disturbances." Putting such "incidental" divergences aside, we have
price-value proportionality, which yields the result stated in the second
sentence of (2).

4) In a capitalist world in which commodity prices are not necessarily
proportional to values, it is nonetheless true that total commodity values
= total commodity prices and total surplus value = total profit ( perhaps
up to a common factor of conversion from dollar units to labor units).

Let's consider these in reverse order. (4) is false unless yielded as a
simple tautology by an otherwise arbitrary normalization procedure. Marx's
"demonstration" of the result in Volume III is clearly invalid. In
contrast, the "new solution" guarantees the result by its normalization
condition. No other approach, alas including Fred's as far as I can tell,
avoids the dilemma that the result is either a simple tautology or false in
general. It's also completely unnecessary to Marx's larger project in
Capital; see below.

Claim (3) is stated in various forms throughout Volumes I and III, but it
is both implausible and logically incoherent. Value-theoretic categories
are strictly derivative phenoma: commodity values are determined by
empirical production conditions, and the breakdown of commodity values into
C, V, and S is determined by incorporating the class distribution of
income. Furthermore, value entities are not the phenomena capitalists and
other class actors respond to in the social determination of production
conditions and class distribution of income; prices are. Thus, for
example, a change in relative input prices may induce a profit-seeking
capitalist to change production techniques, which would in turn change
labor values. More generally, it is more plausible to say that labor
values and prices are simultaneously determined--the problem being that
labor values, unlike prices, are epiphenomenal.

Furthermore, as I've tried to show in the "Ch. 5" discussion, price-value
disparities *can not* be considered "accidental disturbances" in the
capitalist system, and moreover cannot be considered "incidental" to the
existence of surplus value unless Marx is understood as assuming his

The first sentence of claim (2) is advanced in Vol. I at the end of Ch. 5.
I've tried to show that this assessment does not follow, can not follow,
from the premises advanced in Ch. 5 and beforehand, unless Marx is held to
be assuming his conclusions. That's a separate discussion. My point here
is that, consistent with Fred's interpretation of Vol. I, Marx uses the
(invalidly derived) stipulation of price-value proportionality to establish
the correspondence of profit with surplus value, and surplus value with the
exploitation of labor. In this sense, it is indeed true, as Fred says,
that Marx's Vol. I "theory is about the determination of money magnitudes,
and especially dM, BY labor-values."

The question I want to raise here is what, in hindsight, did Marx really
need to show to establish this point?

With that question in mind, turn to claim (1), which is one way of
phrasing the "Fundamental Marxian Theorem." Note that it is *implied by*
claims (2) - (4), but it *does not imply* them. I raise this question:
given the validity of claim (1) (about which more in a second), why does
anybody care about claims (2) - (4), especially given their extremely
doubtful validity or relevance?

I can certainly understand, again in hindsight, why *Marx* cared: the
proof of the Fundamental Marxian Theorem for a multi-commodity economy
requires the use of the Frobenius-Perron theorem about linear systems,
which wasn't established when Marx wrote. So he had to justify an
alternative basis for comparing the price and value regimes in order to
demonstrate his quite sound intuition that profit corresponded to surplus
labor, understood in a specific sense. He labored to develop two
alternative bases for this comparison: the "microeconomic" or
"disaggregative" story in Volume I, and the "macroeconomic" or
"aggregative" story in Volume III. But we now know that these stories,
besides being logically problematic, are completely unnecessary to
establish the logical correspondence of profit and capitalist exploitation.
 So why not dispense with them?


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