[OPE-L:3702] surplus value and transferrred value

From: Rakesh Bhandari (bhandari@Princeton.EDU)
Date: Mon Aug 21 2000 - 18:29:00 EDT

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Fred, Iknow I should be off by now, and my computer will soon be yanked off
the desk by the movers, but I am still here. And while I appreciate your
post and agree with big chunks of it, I think you are misinterpreting two
crucial pages. p. 265 and p. 309 of Capital 3. My attention will be focused

You write:

>The determination of TV is no doubt the most controversial point in my
>interpretation, and the point that Rakesh and Ajit have criticized the
>most. There are two main issues involved in my interpretation of TV: (1)
>that TV is defined as a quantity of MONEY, not a quantity of labor-time;
>and (2) that the "past labor" (Lp) that determines TV is not equal to the
>labor-time embodied in the means of production, but is instead equal to the
>labor-time represented by the given money constant capital ( = C / m); i.e.
>that TV is in general not proportional to the labor-time embodied in the
>means of production. In effect, since m(C/m) = C,
>TV is equal to C, the given money constant capital.

As I now see it Fred, the c in Marx's transformation tableau is indeed the
labor objectified in the means of production. I was wrong. Sweezy does not
misread Marx here on p.265. I think you do.

 Where Sweezy does totally misread Marx is in the assumption that the v in
the tableau, the v that is added to c to get the cost price, is also in
value terms. It is not. Here you are correct.

If it were in value terms--that is, the value of labor power or the value
of the wage goods needed to reproduce labor power--then Marx would have
argued that it too has to be transformed into price terms in order to get
the right cost prices. And Marx does not say that on p.265.

Ajit even seems to think that c+v is not the cost price of the commodity
but input values which are then embodied in the output, but this would
entail the nonsensical assumption that the commodity output embodies the
value of labor power or the value of wage goods. It does not. The value of
the commodity output is simply transferred value + new value added, which
is then broken into the replacement value of variable capital and surplus
value. This is why Marx expresses commodity value as c+v+s, but Ajit seems
to assume that the v in the expression of commodity value is the same as v
in the cost price of the commodity. The v in the value of a commodity
however is a portion of the new value added; the v in the cost price is, as
you say, the money laid out as variable capital.

Now on p. 265 Marx explicitly and unequivocally says--and you do have big
trouble here Fred--that the value of the means of production as consumed in
the commodity output had been assumed to determine their price while we now
know as a result of the transformation procedure that those means of
production had to have been bought at prices which diverged from those

Therefore in determining cost prices we can no longer add to v--which is
the money sum laid out as variable capital as you rightly say--c as it
appears in the tableau to arrive at the cost price. Cost price must be
modified to include the prices paid for those means of production. So the
tableau does not show the correct cost prices--they indeed have to be
modified--but it does show the correct value transferred and thus the
correct total mass of value, which will then be apportioned among the
various capitals according to the principle of the average rate of profit.

There is no need to arbitrarily add another column to the tableau for the
money price paid for the means of production and then juxtapose it to the
already existing c column, that is the value of the means of production. It
could have been done if Marx wished. As his transformation shows that there
should be a new column on the input side just as there are value and price
of production columns on the output side, Marx could then have made up the
numbers for such a new column just as he makes up all the numbers in the
tableau. There is simply no reason to waste time with it. It is shocking
that this could be called a logical error.

If Marx had wanted he could have said--as he does on p. 309--that the c of
cost price in his tableau is already in the form of the money advanced for
means of production and now that we have recognized price value
divergences, we should note that the actual value transferred from these
means of production is not given by the money price paid for them. That is,
since there is a need to bifurcate the c column, he could have done it by
treating the existing column as the money price paid and then then added a
new column for the value of those means of production as consumed in the
commodity output.

So in the case that in the previous period means of production sold above
value and wage goods below value, this means that less value is transferred
than indicated by the money price of the means of production and workers
must put in fewer hours to maintain the same rate of exploitation.

If means of production sold below value and wage goods above value, that
means more value is transferred than indicated by the money price of the
means of production and workers have to put in more hours to maintain the
same rate of exploitation.

I much prefer the way that Marx describes on p.309, instead of p.265 the
corrections that must be done once we recognize price-value divergence.

However, in all these fine points nothing is changed about the general
principle of how the law of value governs bourgeois society through the
formation of an average rate of profit calculated on the basis of the total
pool of surplus value.

The charge that Marx made a logical error, which is prominently made in the
two leading interpretations of Marx's Capital in the Anglo American
world(Sweezy's and Duncan's)--should be retracted. In his Samuelson
critique Mattick Sr was unequivocal about this. And correctly so.

All the best, Rakesh

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