[OPE-L:3640] Re: Re: Re: Re: Fred M's interpretation

From: Rakesh Bhandari (bhandari@Princeton.EDU)
Date: Thu Aug 10 2000 - 16:54:38 EDT

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So as I pointed out to Julian privately Fred notes in Marx's Method in Capital:

"the value transferred from the means of production to the price of
the final product is equal to the given constant capital, or to the price
of the means of production, whether or not this price is proportional to
the labor embodied in the means of production."

Now another advantage of dropping this assumption of price=value is that
while we can agree that the price at which the inputs were bought is
determined by the value produced in the previous period and taken as a
datum throughout the this period, this is not necessarily true of the value
of those means or c which should be determined by the socially necessary
labor time needed to reproduce them. Marx can only define cost price as
replacement value when the value was set the price.

So if within this period of production, the socially necessary labor time
needed to produce those means is reduced--of course in the tableaux Marx
assumes away such a possibility--so is the value and thus the value
transferred, which will thereby reduce the rate of profit on the extant

And to the extent that this capital is devalued and scrapped through wars
or earthquakes or recessions, more scope for accumulation will be created.

However, the question then becomes whether the process by which this
'capital saving innovation' is produced has itself exerted upward pressure
on the OCC of total capital (think for example of what lies behind
capital-saving computers--an astonishingly heavy demand for capital to
build the fabs in which those computers' brains are produced) .

And if this innovation not only offers to reduce price of the means of
production used per unit but replace ever more direct labor, then while
this will allow the assimilator to beat off falling profitability--and thus
seem to the businessmen the best means to raise the profit rate--it may
still contribute to draining the system as a whole of the value substance.

>From the perspective of the individual businessman, a capital saving
innovation is clearly counted on the counter-tendency side but from the
Marxian macro perspective which is well described as a Galilean empiricism,
that is not so clear at all. The problem with Marx is that he has not
provided a primer for businessmen which with the corporatization of the
university means Marx will be less and less understood there though of
capitalist development and its contradictions there remains yet no better

Yours, Rakesh

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