[OPE-L:3804] Re: Re: NI and all that

From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Sat Sep 09 2000 - 23:41:51 EDT

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On Fri, 8 Sep 2000 glevy@pratt.edu wrote:

> Subject: [OPE-L:3796] Re: NI and all that
> Re [OPE-L:3790]:
> > Maybe I am more of a "new solutionist" than I thought! (although
> > of course disagreements remain)
> Hi, Fred.
> What are the remaining differences/disagreements?
> In solidarity, Jerry

Hi Jerry,

Welcome back and thanks for the question.

The main remaining difference between my interpretation and the "new
interpretation" (or more precisely, Duncan's interpretation; I think there
are significant differences between Duncan and Dumenil) is the
determination of constant capital, which in turn affects the determination
of the rate of profit. I quote from my recent RRPE paper on the "new

"In sum, the most important difference between Foley's interpretation and
my interpretation is the nature of the determination of constant
capital. According to my interpretation, constant capital is determined
in the same way as variable capital - both are taken as the given
quantities of money capital that initiate the circulation of
capital. According to Foley's interpretation, constant capital is
determined differently from variable capital. Variable capital is taken
as given as a quantity of money capital, as in my interpretation, but
constant capital is derived from given physical means of production, as in
the Sraffian interpretation. Thus, I argue that Foley only goes "half
way" in breaking away from the Sraffian "physical
quantities" interpretation of Marx's theory. If Foley were to accept my
"monetary" interpretation of constant capital, then all our other
differences would disappear. We could then agree that: (1) Marx's theory
of prices of production in Volume 3 is logically complete and consistent
(i.e. Marx did not commit a "logical error", even a partial one, in the
determination of prices of production); (2) the rate of profit would not
change as a result of the determination of prices of production; and
(3) the aggregate gross price-value equality is also satisfied
simultaneously along with the aggregate net price-value equality and the
aggregate profit-surplus value equality, as Marx concluded. These
conclusions are more consistent than Foley's own conclusions with the
important methodological presuppositions discussed in the beginning of
this section with which Foley agrees: the monetary nature of Marx's theory
and the prior determination of aggregate magnitudes."

I would add that my methodological grounds for taking both constant
capital and variable capital as given is similar to Duncan's own grounds
for taking variable capital as given. Duncan argues that variable capital
should be taken as given as the actual money wage because the actual
exchange relation between capitalists and workers is in terms of money
wages, not the real wage. In other words, variable capital refers to the
actual quantity of money-capital used to purchase labor-power in the real
capitalist economy, not to a hypothetical magnitude (the "direct price" or
the "labor-value" of the means of subsistence) whose relation to the
actual money wage is problematical.

I agree completely. And I also think that the same methodological
principle also applies to constant capital as well as variable
capital. Constant capital also refers to the actual magnitudes used to
purchase means of production in the real capitalist economy, not to a
hypothetical magnitude (the "direct price" or the "labor-value" of the
means of production) whose relation to the actual money capital invested
in the means of production is similarly problematical.

Furthermore, I think there is strong textual support for this
interpretation, as I have documented.

Finally, constant capital and variable are the two components of the
initial money-capital, M, that begins the circulation of capital. It
would seem that logical consistency requires that these two components of
M be determined in the same way. I know of no place in all of Marx's
manuscripts that he discussed or even hinted that constant capital is
determined in a different way from variable capital. Surely if there was
a difference in the determination of these key concepts of his theory,
Marx would have discussed this difference at some length.

Jerry (and others): any further thoughts?


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