[OPE-L:4105] Re: Part Two of Volume III of Capital

From: Ajit Sinha (ajitsinha@lbsnaa.ernet.in)
Date: Mon Oct 16 2000 - 07:41:27 EDT

Duncan K. Foley wrote:

> 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
> observations.
> 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.


I think it is because the natural prices or the prices of production can
be determined independently of the market prices. And the theory of value
in this tradition is concerned about determining those natural prices.
Thus, it could short circuit the gravitational process.

> 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.


I think we should be clear about the fact that "averaging" is not simply
a stitistical notion here. The equalized rate of profits is not derived
by taking the average of lean and fat periods, but rather is
theoretically derived independently of the averaging process. Both Smith
and Marx do seem to think though that in real world the averaging of rate
of profits over say a full business cycle would come close to the
theoretically derived equal rate of profits, if, of course, we had all
the correct data for deriving the equalized rate of profits. Cheers, ajit

> 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
> --
> Duncan K. Foley
> Leo Model Professor
> Department of Economics
> Graduate Faculty
> New School University
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> New York, NY 10003
> (212)-229-5906
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> webpage: http://cepa.newschool.edu/~foleyd

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