[OPE-L:3627] Re: Fred M's interpretation

From: Rakesh Bhandari (bhandari@phoenix.Princeton.EDU)
Date: Wed Aug 09 2000 - 13:15:48 EDT

[ show plain text ]

> Rakesh wrote
> > I have flooded the list with criticisms of Fred's assumption that constant
> > capital or the value of the means of production is determined by the cost
> > price of the commodity
> My understanding of Fred's position is this:
> He claims that the average rate of profit is calculated on the value
> advanced (in the form of money) to procure constant (and variable) capital
> -- a sum of money which *may* be different from the value contained in the
> commodities forming part of constant capital...

Julian, I do agree with this.

> Fred does NOT say anything to the effect that this money capital
> outlay "determines" the value of the commodities in question (which I think
> is what Rakesh means by "constant capital...is determined by the cost price
> of the commodity").

Fred is indeed saying this. So is Alejandro R, Carchedi, Paul Mattick Jr.
All people I agree with on almost everything else. Andrew and Ted do
rightly question this assumption but then do not follow it through the way
I have here. For example, their table makes no correction in the first
period. And Fred has said exactly this on this list, but I can provide
quotes from his own work when I get home. But let him clarify. Do note
that I offered this criticism of Fred's interpretation on July 4th.

> His point is simply that the value laid out by the capitalist may be
> different from the value of the commodities received -- and if there is any
> difference then this represents a *transfer* of value.

Of course I agree that this is also true if the labor theory of value is
true for then total prices must equal total values and such differences
must cancel out. It is indeed a matter of tautology, as Gil would have it.
The point is whether a theory based on this kind of relation
(a single system indeed) Marx postulates between prices and values is
explanatorily powerful (as long as the postulates are not logically
contradictory which is the mess I am trying to clear up here; you will
note that Meek and Sweezy are saying that Marx himself realized the same
problem about the inputs to which they are pointing, and I am saying this
is a complete misreading of what Marx is saying--here I emphatically
agree with Fred!)

As Marx says in his famous Kugelmann letter, the labor theory of value
finds its confirmation in the dynamic social reality it can explain.
That prices would have to be determined in the way Marx says if the
labor theory of value is true does not in itself establish the truth of
the latter. The LTV cannnot be established apodictically.

All the best, Rakesh

This archive was generated by hypermail 2b29 : Thu Aug 31 2000 - 00:00:03 EDT