[OPE-L:4099] Part Two of Volume III of Capital

From: Duncan K. Foley (foleyd@cepa.newschool.edu)
Date: Sun Oct 15 2000 - 22:55:28 EDT

I've been reluctant to engage on the question of which of the 
interpretations of the theory of value better represent Marx's 
thought, on the grounds that experts in Marxist exegesis are better 
situated than I am to form a judgment on this vexed issue.

But I had occasion this weekend to re-read Part Two of Volume III of 
Capital (in the Penguin edition), and inevitably read it in part in 
the light of the controversies on the list and elsewhere. Since I 
don't read German, I can't determine whether the translation has some 
systematic biases in it, but for what it's worth here are some 

1) Marx's distinction between the technical and value compositions of 
capital seems to point toward the modern Sraffian notion of a 
technique of production determined prior to or at least separate from 
prices and the profit rate. (Here I think I agree with Ajit.)

2) I didn't see much positive evidence that Marx was a temporalist. I 
could discern no explicit discussion of the timing of prices and 
profit rates. It seems to me that the temporalist claim has to rest 
on an indirect argument that it is consistent with some of the 
conclusions Marx drew (the conservation of total value, constant 
capital, and the profit rate in the movement from the embodied labor 
accounting to price accounting) rather than on direct evidence. The 
problem with trying to establish an interpretation through an 
indirect argument of this kind is that there might be some different 
interpretation that also preserves those conclusions. (Sherlock 
Holmes recommends the rather dubious logic that once you eliminate 
all the impossibilities, whatever remains must be the true 
explanation. But I never understood how Holmes could be sure that he 
started with an exhaustive list of all the possibilities.)

3) Reading the whole of Part Two of Volume III together, I found 
strong reasons to think of Marx as a "long-periodist", that is, as 
adopting the methodology of long-period positions in his reasoning. 
He explicitly links his discussion to Smith's theory of competition, 
and the adopts characteristic long-period language, such as the 
distinction between natural and market price.

4) I'm not sure that long-periodists are simultaneists in the modern 
terminology, since the long period position of the Classicals 
involves the image of constantly fluctuating prices, gravitating 
around natural prices (or prices of production in Marx's 
terminology), while simultaneists are supposed to believe that input 
prices and output prices are always somehow equalized. Thus I don't 
think Marx was a simultaneist, either.

5) Marx's treatment of the profit rate seems to be much more nuanced 
and subtle than most contemporary algebraic treatments. For example, 
the first paragraph of section 3 of chapter 12 (Supplementary 
Remarks) (p. 310 in the Penguin edition) says:

"It has been said that competition equalizes profit rates between the 
different spheres of production to produce an average rate of profit, 
and that this is precisely the way in which the values of products 
from these various spheres are transformed into prices of production. 
This happens, moreover, by the continual transfer of capital from one 
sphere to another, where profit stands above the average for the time 
being. Something that must also be considered here, however, is the 
cycle of fat and lean years that follow one another in a given branch 
of industry over a particular period of time, and the fluctuations in 
profit that these involve. This uninterrupted emigration and 
immigration of capitals that takes place between various spheres of 
production produces rising and falling movements in the profit rate 
which more or less balance one another out and thus tend to reduce 
the profit rate everywhere to the same common and general level."

Neither contemporary "simultaneist" nor contemporary "temporalist" 
models seem to be a very good representation of this process. They 
both tend to neglect the dynamics of the motion of capital in and out 
of different branches that Marx emphasizes (closely following Smith). 
Both tend to come up with one equalized profit rate that is supposed 
to rule in a period, rather than demonstrating the gradual averaging 
process that Marx describes. Neither model represents the movement of 
capital from one branch to another which Marx seems to put in the 
center of the process.

6) I didn't have much better luck with understanding the tableaux 
this time than I have had before. It sure seems to me that Marx feels 
bad about not revaluing constant capital in some places. For example, 
on p. 265 (middle of chapter 9) he says:

"As the price of production of a commodity can diverge from its 
value, so the cost price of a commodity, in which the price of 
production of other commodities is involved can also stand above or 
below the portion of its total value that is formed by the value of 
the means of production going into it. It is necessary to bear in 
mind this modified significance of the cost price, and therefore to 
bear in mind too that if the cost price of a commodity is equated 
with the value of the means of production used up in producing it, it 
is always possible to go wrong."

I find it very difficult to reconcile this kind of language with the 
idea that Marx made no distinction between the labor embodied in the 
constant capital and the money value of the constant capital at 
prices of production.

The best I could do on this reading was the impression that Marx uses 
the same tableaux, or at least parts of the same tableaux, to 
represent the situation both before and after the redistribution of 
surplus value through competition. Maybe if he had gone back and 
revised this he would have clarified this point.

7) If there's a problem with these chapters, perhaps it should be 
stated in terms of possible inconsistencies with the long-period 
position methodology, not with contemporary "simultaneism".


Duncan K. Foley
Leo Model Professor
Department of Economics
Graduate Faculty
New School University
65 Fifth Avenue
New York, NY 10003
messages: (212)-229-5717
fax: (212)-229-5724
e-mail: foleyd@cepa.newschool.edu
alternate: foleyd@newschool.edu
webpage: http://cepa.newschool.edu/~foleyd

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