[OPE-L:3784] Re: Re: definition of constant capital

From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Thu Sep 07 2000 - 12:33:10 EDT

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This is a reply to Paul Z.'s (3767).

On Wed, 6 Sep 2000, Paul Zarembka wrote:

> In some cases, Marx used labor hours; in others, Pounds, shilling, and
> pence. Abstracting from the transformation problem, an expositor can use
> either.
> > What purpose does this indirect measure of labor-time as
> > money serve? Why not measure labor-times directly in terms of
> > labor-hours?
> Without transformation as an issue, he could use either. And there are
> many examples in Marx for both. I haven't attempted to decipher a pattern
> in the choice.

I argue that Marx's constant use of numerical examples in terms of money
is not just for ease of exposition (whatever that means), but is rather a
matter of the essential logic of Marx's theory. It is a matter of what
the theory is about.

In Part 1 of Volume 1 ("Commodities and MONEY"), Marx derived the
necessity of money and analyzed the functions of money. In Part 2 ("The
Transformation of MONEY into Capital"), Marx defined capital in terms of
money and posed the central question of Volume 1: how does a given sum of
money becomes a greater sum of money? In Part 3 ("The Production of
Absolute Surplus-Value"), Marx explained where the increment of money
comes from (surplus labor). The surplus-value in Marx's example in
Chapter 7 is 3 SHILLINGS, which is determined by 6 hours of surplus
labor-time. As Marx concluded his basic theory in this chapter: "The
trick has at last worked: MONEY has been transformed into capital." In
other words, 27 SHILLINGS has been transformed into 30 SHILLINGS. This is
what Marx's theory of surplus-value is intended to explain.

If you have an alternative interpretation of Parts 1 and 2 and Chapter 7,
then please present it. And not just that "Marx uses examples in terms of
money for ease of exposition", but WHAT IS THE QUESTION THE THEORY
his theory in this particular way?

> > My answer to this question: because the theory attempts to explain HOW
> > LABOR-TIME. Therefore, the numerical examples HAVE to include both
> > quantities of labor-time and quantities of money, the former as cause and
> > the latter as effect.
> I don't understand the syntax: "quantities of money [this being the former
> -- "as cause") are determined by quantitities of labor-time [this being
> the latter -- "as effect").

Paul, the antecedents come from the same sentence, not from the previous
sentence: labor as cause, money as effect. Besides quibbling about the
syntax, what is your response to the substantial point (that Marx's
examples are in terms of both money and labor because the theory is about
how quantities of money are determined by quantities of labor)?

> > At bottom, the question is: what is Volume 1 mainly about? If
> > labor-times, then what particular question(s) about labor-times do you
> > think Volume 1 is intended to explain? And where in Volume 1 does Marx
> > pose and analyze these key questions? What are the labor-times determined
> > by? Ajit refuses to answer these questions. Paul, how would you answer
> > these fundamental questions?
> Answering such large questions requires a book.

How about a paragraph summary?

> But Volume 1 is not
> principally about MONEY.

Then what is Volume 1 principally about?

> > > Your favorite C-M-C (or is it M-C-M'?) circuit is not even mentioned in
> > > VPP.
> >
> > I am disappointed that you don't remember which, since this is my main
> > point, that Volume 1 is about dM.
> Marx discusses both in Volume 1 and neither in VPP. Why not focus on
> C-M-C if you we must choose?

Because M-C-M' expresses the main feature of capitalism that Marx's theory
is intended to explain: dM.

> > I think it is clear that Marx defined CONSTANT CAPITAL as being on the
> > second side of this exchange transaction, on the MEANS OF PURCHASE side,
> > as that which is used to purchase the means of production. This means of
> > purchase of course can only be MONEY. Therefore, I conclude that Marx
> > defined constant capital in terms of money, as the money used to purchase
> > the means of production in the first phase of the circulation of
> > capital.
> Where is there a purchase using MONEY in Theories of Surplus Value, Part
> II, "The Direct Transformation of a Part of Surplus-Value into Constant
> Capital -- a Characteristic Peculiar to Accumulation in Agriculture and
> the Machine-building Industry"?

I will discuss this text below.

> Concerning my citation "The value of a commodity is certainly determined
> by the quantity of labor contained in it...." [Marx, Volume 1, p. 318],
> Fred replies,
> > Paul, I think you are confusing here "is" and "is determined by". I would
> > agree that the value of a commodity IS DETERMINED BY the quantity of labor
> > contained in it. But that does not mean that the value of a commodity IS
> > the quantity of labor contained in it.... [T]he
> > value of a commodity [IS] the form of appearance of value, or the
> > money-price of the commodity.
> Yep, I'm confused and I remain confused: a form becomes the essence of
> value?

No, a form remains a form. But the purpose of the theory is to explain
how the form is determined by the essence, or how the essence necessarily
appears in these particular forms. It is not to explain the essence
without any connection to the forms of appearance.

> In any case, Fred seems to level, theoretically, production with exchange,
> or even priorize exchange with money over production. He seems to reverse
> the priorizing of Marx, in which Volume 1 is "The Process of Capitalist
> Production".

I do not give priority to exchange over production. Labor in production
is the cause of prices in exchange. But the initial givens for Marx's
analysis of production (constant capital and variable capital) come from
circulation, as the money invested to purchase means of production and
labor-power. Volume 1 begins (Parts 1 and 2) with the sphere of
circulation, not the sphere of production, and this prior analysis of
circulation provides the initial givens form the analysis of production in
Part 3 and beyond.

Now to the section you cite in TSV.II (pp. 480-89). Paul, I think this
text supports my interpretation, not yours. Marx's example is of a
surplus-value of 5,000 POUNDS which is to be converted into additional
CAPITAL by PURCHASING additional means of production and labor-power. In
other words, surplus-value is MONEY which is to function as a MEANS OF
PURCHASE. Marx's question is: what are the conditions that make this
accumulation of capital possible? Marx's answer:

"These conditions for the accumulation of capital are thus the very same
as those for its original production or for reproduction in
general. These conditions, however, were: that labor was BOUGHT with one
part of the MONEY, and with the other [part of the MONEY], commodities -
raw material, machinery, etc... These commodities can only be PURCHASED,
if they are available on the MARKET as commodities." (p. 483)

In other words, if this $5,000 (pounds converted into dollars) of
surplus-value is to be converted into additional capital, it must PURCHASE
labor-power and means of production on the MARKET. The part of the $5,000
that purchases labor-power is additional VARIABLE CAPITAL and the part of
the $5,000 that purchases means of production is additional CONSTANT
CAPITAL. The title of the next section 5 is "The Transformation of
Capitalized Surplus-Value into Constant and Variable Capital"). All this
is in terms of MONEY and PURCHASES of means of production and labor-power
on the market.

Marx also discusses, as you point out, the special case of agriculture and
the machine-building industry which produce part of their own means of
production, and therefore do not have to purchase these self-produced
means of production. In this case, the surplus product in these
industries does not have to be converted into money (surplus-value) and
then used to purchase additional means of production. Instead, the
surplus product directly becomes additional means of production. But this
is a special case that does not invalidate the general rule that in most
industries, if the accumulation of capital is to take place, surplus-value
(money; e.g. $5,000) already appropriated must be used to purchase
additional means of production, and in that way is converted into
additional constant capital.

Marx of course discussed the accumulation of capital in Volume 1,
beginning in Chapter 24 ("The Transformation of Surplus-Value into
Capital"). If there is any doubt about my interpretation (that the
accumulation capital, like the original investment of capital, is about
money), I ask readers to please reexamine the opening paragraphs of
Chapter 24:

"Earlier we considered how surplus-value arises from capital; now we have
to see how capital arises from surplus-value. The employment of
surplus-value as capital, or its reconversion into capital, is called
accumulation of capital.

"Let us consider this process from the standpoint of the individual
capitalist. Suppose a master-spinner has advanced a capital of $10,000,
of which four-fifths ($8,000) is laid out in cotton, machinery, etc and
one-fifth ($2,000) in wages. Let him produce 240,000 lb. of yarn every
year, and let the value of this cotton be $12,000. The rate of
surplus-value being 100 per cent, the surplus-value is contained in the
surplus, or net product, and has a value of $2,000 which will be realized
by a sale. $2,000 is $2,000. Neither seeing nor smelling will tell us
that THIS SUM OF MONEY IS SURPLUS-VALUE. When we know that a given value
is surplus-value, we know how its owner came by it; but that does not
alter the nature either of value or of money.

"In order to transform this newly acquired sum of $2,000 into capital, the
master-spinner will, all circumstances remaining as before, advance
four-fifths of it ($1,600) in the purchase of cotton, etc. and one-fifth
($400) in the purchase of additional spinning workers, who will find on
the market the means of subsistence whose value the master has advanced to
them. The new capital of $2,000 then functions in the spinning-mill and
in its turn brings in a surplus-value of $400."

As we can see, all this is in terms of money. And not just for ease of
exposition, but because this is what Marx's theory is intended to
explain. Marx had already explained how money is transformed into
capital, i.e. into more money (e.g. $10,000 transformed into
$12,000). Now Marx examines how the surplus-value of $2,000 is converted
into additional capital by the purchase of additional means of production
and labor power, and produces an additional surplus-value of $400.

Paul, how do you interpret these paragraphs?


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