[OPE-L:3773] Re: Re: Re: Re: Re: Re: Re: surplus value and transferrred value

From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Thu Sep 07 2000 - 00:59:45 EDT

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This is reply to Ajit's latest (#3765). Ajit, thanks again.

On Wed, 6 Sep 2000, Ajit Sinha wrote:

> The problem I'm trying to bring home to you
> is that your so-called givens presuppose the Sraffian givens. That is, the
> Sraffian givens are prior to your givens, and so your givens have no
> legitimate theoretical status.


> When you say that "We know that in a certain period of
> time a certain amount of money-capital is invested to purchase means of
> production and labor-power. This amount of
> money-capital is in principle observable; it is an empirical given", you
> must accept that this *observation* cannot take place independently of
> what was "purchased" and how much at what price. Your empirical givens
> are *derived* by taking the amounts of inputs and labor and their
> prices. By claiming that my theory closes its eyes to it does not change
> the objective situation that the theoretical givens in your theory are
> Sraffian givens plus the prices of all inputs.

Ajit, I have already answered this criticism in a recent post (I lost
track of the number; it is between 3734 and 3741). Marx's givens do not
depend in any way on the Sraffian givens. Sraffian theory is not the only
way to determine the magnitude of constant capital (as the unit price
times the quantity of the means of production). As I have explained, Marx
determined the magnitude of constant capital in a different way. He first
took the magnitude of constant capital as a given and then later explained
this magnitude as equal to the price of production of the means of
production. Marx's prices of production are not the same as Sraffian unit
prices. Furthermore, contrary to Ajit, Marx's determination of prices of
production does not depend in any way on either physical quantities or
unit prices. Marx's prices of production are indeed identically equal to
the product of quantities times unit prices. But Marx's prices of
production are not determined by this product, but rather by the
redistribution of the aggregate surplus-value in such a way to equalize
the rate of profit across industries.

> When a theory takes something as given, it
> claims that those givens are determined in a space outside of its particular
> theoretical space. For example, utility function in the neoclassical economics
> is taken as given. By this the theory is claiming that the utility function is
> determined by the psychology and the socio-psychological determinants that are
> outside the scope of the economic theory. In your theory you do not claim that
> those money variables are determined by the variables that are outside of the
> scope of your theory.

Ajit, I don't understand this. It seems to me that it would be BETTER to
be able to eventually explain a theory's initial givens (i.e. to "posit
the presuppositions"), rather than taking a theory's initial givens as
determined outside the given theory. Why is this a problem?

> Furthermore, when you go about determining your prices of production
> by taking the disaggregated Ci's and Vi's, you never explain how do you get
> these disaggregated figures without the knowledge of the Sraffian inputs.

This is easy. Marx "gets" the disaggregated Ci's the same way he
"got" the aggregate C - by taking them as empirically given. Just like
the aggregate C is in principle observable and can serve as an initial
given, so also are the disaggregated Ci's in principle observable and can
serve as initial givens. Marx said this explicitly in the Theories of

"If we take society at any one moment, there exists simultaneously in all
spheres of production, even though in very different proportions, a
definite constant capital - presupposed as a condition to
production." (TSV. I: 109)

A knowledge of the physical inputs is in no way necessary to determine
these disaggregated Ci's. Indeed, I don't see how a knowledge of the
physical inputs could help one disaggregate the total C into individual
Ci's. Just dividing by the physical inputs won't do it, because the
different means of production have different unit prices. Ajit, would you
please explain? Why is it better to explain a theory's givens outside the
theory, rather than inside it?

> Just saying that I take everything as given given given don't make a
> theory.

Ajit, one more time: Marx did not take "everything as given given
given". Rather Marx assumed that:

        NV = m L

and that

         P = C + m L

and from these two key fundamental assumptions, together with a small
number of initial givens, Marx's theory is able to explain surplus-value
(dM = mL - mLn), the rate of profit, prices of production, and much, much


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