[OPE-L:3618] Re: Re: Re: Re: Re: Re: Re: constant capital and variable capital

From: Rakesh Bhandari (bhandari@Princeton.EDU)
Date: Tue Aug 08 2000 - 10:04:37 EDT

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>> Marx is arguing that we need to make a transformation of the inputs from
>> the prices at which they were bought to their value--though the profit
>> appropriated will be determined by cost price.
>What do you mean by cost price? Cost price should include profits, shouldn't
>it? Cheers, ajit sinha

Cost price should include profits? You dare call me confused. You obviously
have not noted that Marx is not adding surplus value and constant capital
but variable capital and constant capital in the cost price column. Of
course this mistake is an easy one for the tyro since the two numbers are
the same due to Marx's assumption of 100% rate of exploitation.

  Profit is appropriated on the basis of cost price--how could it possibly
include profit. What price has the production of a commodity cost a
capitalist? The money sums he laid out for the means of production and
productive labor power--on this cost price basis he will appropriate
profit, so how could it include profit unless you are making the point that
the capitalist has to buy means of production tendentially at their prices
of production, which includes the average rate of profit from the prior
period? What are you getting at?

>Then those numbers are simply gibberish. Remember, our problem was how to
>calculate the value of constant capital.

No Ajit that's your problem: my problem (and Marx's in the chapters we are
discussing) is how to calcuate the average rate of profit and production
prices. For this matter the price value divergences in terms of the inputs
will cancel out. I give my reasons below.

>But how do you calculate the value of the means of production and the value of
>money. Above you say that you don't know how to calculate the value of the
>means of production. Then how do you know that the value of the means of
>production differ from the value of the money needed to purchase them?

Well first we can assume that there is no difference, which is what Marx
does in the tableaux. The money price of the means of production and their
value is assumed to be the same.

Second, we can then allow for the possibility that there was divergence in
the prior period from which came this period's inputs for the same reason
that the present example is showing divergence between the value and the
price of the output.

Third we can assume that the divergences with the inputs cancel themselves
out for the same reason that they do in the case of the outputs displayed
in the tableaux.

That is my reasoning for the the two conditions which I submitted for the
numbers in the c column.

I also submit that it is the most reasonable interpretation of Capital 3
pp. 264-65 for which you have not provided an alternative explanation.

The Sweezy/Meek point is that Marx recognized the need to transform the
inputs from value to price but did not know how to go about doing so due to
lack of needed mathematical tools.

I am arguing that Marx is not arguing that the inputs should be transformed
into prices. I agree with Fred that they are already in prices, which is
why Marx says they need to be transformed into values in order to
understand the value transferred in each branch of production, though
profit will of course be appropriated on the basis of cost price.

>Not if you are serious about the problem. According to your conditions I could
>put four zeros ar even negative or imaginary numbers under the c column. But
>they would be patently nonsensical numbers.

Well, I could have added the third condition that the numbers must be
realistically possible, so no imaginary, etc numbers allowed.

>> Rakesh:
>> The point of the example is not what c exactly is; the point is that value
>> of the means of the production consumed in a commodity should not be
>> equated with the cost price of a commodity.
>Of course not! The point is that you are extremely confused. The reason is that
>you have been lost in the woods for quite some time. And I'm showing you light,
>but you refuse to see it.

I don't think the second sentence provides the reason for the first,
explains the first. It's rather a metaphoric expression of the first
sentence. If you do have point, try to spell it out. If you want to flame
me, try to rise above the banal.


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