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Aha, I think I got it.
I agree with you, Fred. Kinda.
Now stick with me though I shall define constant capital not as the money
price paid for means of production but as the value of the means of
production consumed in a commodity. This after all is how Marx defines it
in the crucial passage which has been haunting Marxism for more than 50
You are right however. The constant capital can be equated with the money
price paid for it. But this is only true in the aggregate.
Only when Marx is analyzing a single capital as an aliquot of total capital
can he assume that money laid out for means of production would equal the
value of the means of production consumed in the commodity output, which is
how I understand constant capital.
But when Marx gets to many capitals, the assumption has to go. Some
capitalists have paid more for the means of production than the value which
will be transferred from them. Other capitalists have paid less.
By what right however can we assume that such cancellation of the
price-value divergences of the means of production obtains in the aggregate
and thus would not affect the calculation of the average rate of profit and
prices of production done on the basis of the assumption that the money
price paid for the means of production is the same as constant capital or
the value of the means of production consumed in a commodity?
We really don't have any "right", and I don't think Ajit believes I have
answered his question--his skepticism here is appreciated. It seems to me
that what Marx is saying is that it simply follows that if the law of value
is to regulate prices, it cannot do so except in the way he hypothesizes
(Ricardo's and Smith's accounts were confused, or suffered from forced
And if the law of value does work the way Marx hypothesizes--and showing
how it would have to regulate prices does not prove that it actually
does--then it shouldn't matter if Marx calculated the average rate of
profit and prices of production on the basis of the assumption that the
price paid for the means of production in each individual branch is equal
to the value of the means of production consumed in teach branch's
commodity output. This will be true in the aggregate for the same reason
that total price=total value of this period's output.
I am pretty sure that I am interpreting Marx correctly here, which is not
to say that this interpretation frees Marx from logical contradiction or
under or over determination in his value theoretic account of prices.
I would just like to reiterate that the main point of Marx's demonstration
here is not to prove that non labor income has its source in unpaid labor.
His main goal here is to comprehend and predict the dynamics of a system in
which prices are regulated in the way he hypothesizes by the law of value.
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