From: Rakesh Bhandari (bhandari@Princeton.EDU)
Date: Mon Aug 14 2000 - 14:33:15 EDT

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Oops I made typos as I was trying to rush this post out to Fred before he
logged off again.

So everyone please read this one.

Unfortunately Fred, I'll be off by the end of the week for months.

>Rakesh, you seem to agree with me that Volume 1 is about money.

I agree that based on Marx's analysis of the form of value, he is trying to
show that money price is the necessary form of appearance of value--that
value has no other form of appearance but than that in money price.

 I have made two further points: 1. this puzzling aspect of value Marx does
not explain in terms of the substance of commodity value but in terms of
the form of commodity value--which possibly suggests that Marx assumed a
broad Aristotlean theory of causes or explanatory factors--"aitia" (form,
material, efficient, final) and

2. that the value of a commodity only remains at best a potentiae (or
perhaps simply undefined) until actualized in the form of money price,
which then gives an even stronger meaning to "necessary form of

I have further suggested that the conceptual couplet of
potentiae/actualization by which the substance is understood in dynamic
terms also recalls Aristotle for whom ousia was not what persists unchanged
as for Descartes, Locke and Kant but precisely as that which undergoes
change in change, what is at the end of any process different what it was
at the outset (see John Randall, Jr Aristotle, p. 112).

Price is then the necessary form of appearance of value because only upon
price measurement is the value substance actualized. This is a very strong
interpretation of the meaning of "necessary form of appearance" to which I
subscribe. Indeed it may be original to me. Paul Mattick Jr thinks it's all

So I am opening up the question of whether the first part of Capital 1 has
been misunderstood due to inattention to Marx's debt to Aristotle (the
other epochal thinker of the 19th century Darwin also owed a great debt to
Aristotle in comparison to whom his two other heroes Cuvier and Geoffrey
came across as mere 'schoolboys' as Darwin once put it.) No one questions
that Marx held no ancient thinker in higher regard than Aristotle.

>on the other hand, you also seem to agree with Ajit that the concepts of
>constant capital, etc. are defined in terms of labor-times. Have I
>understood you correctly?


  If the key concepts of constant
>capital, etc. refer to labor-time quantities alone, then in what sense in
>Volume 1 about the determination of money magnitudes? What other concepts
>in Marx's theory refer to the money quantities that Volume 1 is supposed to
>be about?

Fred, money is the necessary form of appearance of value. therefore I agree
with the inputs could be in nothing other than prices. I agree with you
here and disagree with Ajit. However, that value can only be represented in
price does not mean that price does not misrepresent value. You of course
do not disagree.

Here is where our disagreement begins: Marx can argue that constant capital
is given by the money price needed to purchase means of prod ONLY when he
was assuming price=value. I argue that constant capital is not the money
price paid for the means of production (which is what enters into their
cost price) but the actual value of these means of production as they are
used up in a commodity. In later posts I have argued against your
defintion of constant capital in money terms, which does not mean I reject
your argument that inputs can only be in money terms.

So this is how I read Marx's argument in which constant capital is not
given by the current money price needed to buy inputs but the value of the
means of production:

If we assume that prices are regulated by the law of value, then Marx
demonstrates it can only be through the average rate of profit due to the
unequal compositions of capital.

In this demonstration Marx assumes the price of the inputs is equal to
their value, but his own demonstration that the law of value can only rule
through the indirect means of the average rate of profit implies that this
assumption built into the tableaux is simply false.

Now indeed if the law of value regulated the formation of prices in the
same way in the prior period as he demonstrates in this period--and why
shouldn't it have?--then the price/value divergences for which he indeed
has to correct should cancel themselves out and thus not affect his
calculation of the average rate of profit and production.

I have also been making a big stink about trying to solve the
transformation while carrying over assumptions from vol 2, viz. constant
value or prices.

Yours, Rakesh

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