[OPE-L:3669] Textual evidence against monetary-macro interpretation

From: Rakesh Bhandari (bhandari@Princeton.EDU)
Date: Tue Aug 15 2000 - 11:37:48 EDT

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Fred says that constant capital is determined by the money needed to buy
means of production at current costs. While this may or may not be true at
an aggregate level, it is simply not true at the level of many capitals.

There is decisive textual evidence that at this level Marx defined constant
capital not as the money laid out for means of production but rather as the
value of the means of production consumed in a commodity.

Please see Capital 3, p. 309 : "Let us assume that the average composition
is 80c+20v. It is possible now that, for the actual individual capitals
that are composed in this way, the 80c may greater or less than the value
of C, the constant cpaital, since this C is composed of commodities whose
prices of production are different from their values."

On pg 308-9 I think Marx's argument is quite clear. He is saying that he
had initially calculated the average rate of profit and prices of
production on the assumption that price paid for the means of production
(80c) equaled constant capital (C), which is specifically the value of the
means of production consumed in the commodity.

But his own transformation now shows that this was wrong. Here is the
modified significance of cost price. We know that the value of the means of
production consumed in a commodity could not have been equal to the price
paid for them except in the most exceptional circumstance.

How does this matter in terms of Marx's efforts to demonstrate how it is
the law of value asserts itself? NOT AT ALL.

Let's say all that means of production were bought at less than value. This
only means that more value was transferred to the final output than
indicated by the money price of the means of production. It does not change
how the average rate of profit and prices of production are calculated. The
point is that we simply don't know the value of the means of production
consumed in any industrial branch. The value categories simply cannot be
known in a direct way.

Likewise let's say that all consumer goods sold at above their value. What
does this change? Only that out of the sum of variable capital the
capitalist will be able to hire fewer workers and the rate of surplus value
will thus be attentuated. Again there is no effect from these modifications
here on the logic of how the law of value has to work its way out through
the average rate of profit and prices of production. Of course wage rises
will affect capitals of varying OCCs differently but this is only because
of the way the law of value governs bourgeois society through the average
rate of profit.

So the modifications for which Marx is calling in terms of the inputs--and
my main objection to Fred's interpretation is that he cannot account for
Marx's own admission that the inputs do indeed need to be transformed--
would be necessary if we were to calculate what the magnitudes of the
average rate of profit, rate of surplus value and prices of production
exactly are.

But Marx is clearly not interested in the precise magnitudes here but
rather only the form in which the law of value asserts itself. He has has
shown that everyday exchange relations cannot be directly identical with
the magnitudes of values if indeed the law of value is to govern bourgeois

All the best, Rakesh

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