[OPE-L:4522] Re: Re: Re: "Don't go like that" (Was "What is Volume Iabout?")

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Mon Nov 13 2000 - 16:38:49 EST

re Andrew's 4515:

>I had written that in Rakesh's interpretation, "The magnitude of
>aggregate surplus-value clearly becomes
>dependent on how it is distributed."  He has responded "Of course."
>The problem is that Marx said the opposite.  There's direct evidence of
>this -- I don't have time to locate it -- but also the very purpose of
>the transformation discussion is to show that the magnitude of
>surplus-value is determined in production, not in the market.  The total
>is distributed differently, but unaltered in the aggregate.

My point is that when the transformation only applies to the outputs, 
we are indeed taking a given magnitude of surplus value and 
distributing it.


I am arguing that this makes no sense, Marx never said so much, and 
the assumption relies on an adding up theory of price. Again it is 
not possible to take a commodity output of a given and fixed 
magnitude of value and modify its cost price without modifying 
surplus value in the opposite direction. If one does not modify the 
mass of surplus value and just add it on the modified cost price--see 
for example Allin's and Duncan's transformation examples--then total 
price is no longer determined by total value. It is rather total 
value or price (its monetary expression) which is determined before 
distribution or resolution into cost price and surplus value.

Now let me take your post in sequence:

>A brief reply to OPE-L 4514 (I'm rushing off to school):
>Rakesh wrote
>: Moreover, what is your formula for the determination of value?
>: money laid out as constant and variable capital + surplus value = C?
>Yes.  More precisely, a commodity's value is, and is determined by, the
>value added by living labor plus the sum of value represented by the
>money needed to acquire the used-up means of production.

But Andrew, this is inconsistent: why are you adding the value of the 
money sum laid out as constant capital not to the money sum laid out 
as variable capital but to the value added by living labor?

In terms of value determination, I put to you the same question Fred 
does to Duncan, but mine is in the opposite direction! Fred wants 
both inputs in money terms (I do too in terms of value resolution); 
but in terms of value determination, I want both inputs in terms of 
value: value of the consumed means of production plus newly produced 

Why not just add the value of the means of production as they are 
consumed and reappear in the commodity output to the value newly 
added by living labor? Less headache!

In the passages which I cited, this is what Marx is doing. Then we 
have total (indirect and direct) labor value which is expressed as a 
price, depending on the monetary expression of labor value.

>: So any change in the money sum invested results in rising value or
>: price (as monetarily expressed)?
>No.  If variable capital (the value of wages advanced) differs from the
>value of labor-power (or of means of subsistence), then surplus-value
>likewise differs, in the opposite direction.  The sum of v + s always
>equals the value added by living labor.  Calling it L, s = L - v.

Yes, but

s = L - v

implies that

s + v = L, which implies that

(v + a) + s = L + a

this is an adding up theory of value or price

Why does this not follow from your own formulation?

>: Then what of Ricardo's critique of Smith? Simply because wages--the
>: money laid out as variable capital--rise does not mean the value
>: objectified in the product and thus its price rise. If it did, class
>: conflict would be attenuated. See TSV, pp. 417-8
>According to the above, a rise in wages will not affect L and thus not
>affect c + L.

But I don't understand how and why you rule out a rise in wages 
issuing in greater total value and price (its monetary expression).

>: Rather the value of the product as determined by indirect and direct
>: labor objectified therein is a prior and given magnitude which is
>: then resolved into cost price (the replacment money costs of the used
>: up c and v) and surplus value which vary inversely.
>I agree with this.  I do not agree with your interpretation of the
>concept of "indirect and direct
>labor objectified therein."  The sum of value needed to acquire the means
>of production is objectified labor and indeed value, represented in

Yes the sum of money used to purchase the inputs is objectified labor.

>  (I thus also deny that the passages you cite support your
>interpretation, since they esssential refer to objectified labor, not the
>value of the used-up means of production, as a determinant of value.  The
>passage on p. 294 is also not relevant because it is non-definitional and
>based on an assumption that the constant capital happens to equal the
>value of the means of production.)

Here I disagree. On p. 294 Marx clearly looks at the value 
determination of a final product (yarn) as one single labor process, 
such that value is determined entirely by labor time: "Hence in 
determining the value of the yarn, or the labour time required for 
its production, all the special processes carried on at various times 
and in different places which were necessary, first to produce the 
cotton and the wasted portion of the spindle, and then with the 
cotton and the spindle to spin the yarn, may together be looked on as 
different and successive phases of the same labor process. All the 
labour contained in the yars is past labour; and it is a matter of no 
importance that the labor expended to produce its constituent 
elements lies further back in the past than labour expended on the 
final process, the spinning."

>Rakesh claims that the following is "non-responsive":
>: >Specifically, the already determined c and v have the form of
>: >k.  The magnitude of k DOES NOT differ from the magnitude of c + v.
>: >Part 1 of Vol. III.
>: >
>: >Yet in Marx's theory, k does differ, as you have acknowledged, from
>: >values of the used-up means of production and subsistence.
>: >
>: >It therefore follows that c is not -- IS NOT -- the value of the
>: >means of production.  Q.E.D.
>I think it is responsive and indeed that it goes to the heart of the
>matter.  Rakesh's whole argument is based on the notion that k deviates
>from c + v.  I maintain that the text says otherwise.  How much more
>responsive can one get?

No c and v expressed as (c + v) is cost price, k.

We are agreed that they are the money sums which the capitalist has 
laid out as constant and variable capital, and that money is replaced 
by deducting it from total value, which has a price expression based 
on the monetary expression of labour value. Total value or price is 
thus broken down into k and s.

But I am saying that c and v have different meanings in value 
determination. Here c refers to the value of the means of production 
as they are used up and reappear in the final product.

And in terms of value determination (v + s) is the newly produced 
value. Newly produced value is the direct labor objectified in the 
final product by the use of labor power. Newly produced value is thus 
not strictly speaking (v + s),
for unlike the means of production, the wage goods either in their 
value or money form do not reappear in the value of the final 
product. They are simply extinguished by working class consumption. 
This is exactly why a simple rise in the value or price of wage goods 
does not result in greater output value or price (its monetary 
expression) but rather lesser surplus value.

(v + s) is thus a convenient expression for the fact that due to the 
duality of labor power the direct labor objectified in the final 
product is greater than the value of the wage goods.

But happens if for example the input  wage goods are no longer 
assumed to sell at value.

Two things: the mass of surplus value is modified; the rate of 
surplus value is modified. But total value or price (its monetary 
expression) cannot change as a result thereof.

For example if wage goods now sell above value, necessary labor time 
is increased and thus surplus value decreased.  Again, we see how the 
modification of cost price leads to an opposite change in surplus 

That is,

C - (v + a) => s - a {a can be positive or negative}

So Marx writes: "The 20(v) can similarly diverge from its value, if 
the spending of wages on consumption involves commodities whose 
prices of production are different from from their values. The 
workers must work for a greater or lesser time in orer to buy back 
these commodities (to replace them) and must therefore perform more 
or less necessary labour than would be needed if the prices of 
production of their necessary means of subsistence coincide with 
their values." capital 3, p. 309.

That is, allowing input wage goods not to sell at their value does 
not change the labor which is objectified in the production; it 
changes the relation between necessary and surplus labor in the 
production process. That relation is determined then partially in the 
realm of distribution, and depends on how the price of production of 
the wage goods deviates from their value.

That there is surplus value at all depends on the exploitation which 
results from the use value of labor power. The magnitude of that 
surplus value however is partially depedent on distributional 
variables. The essence of surplus value is unpaid labor; the quantity 
of unpaid labor depends on the distributional consideration of how 
much has to be paid for indirect and direct labor.

To return to my main point: it makes no sense to assume a commodity 
the value of which is a fixed magnitude and then change its cost 
price without changing in the opposite direction, the mass of surplus 
value which it represents.

>Rakesh's reply, as far as I understand it, just restates his position.
>It does not respond to my proof.
>I deny that the passage on p. 309 of Capital III (Vintage) states or
>implies that "The value of the means of production [... is] transferred
>to the final product ...."  I interpret it as saying the opposite, namely
>that the *cost price* of used-up means of production is transferred to
>the product.  The crux of the whole matter, again, is whether k differs
>from the magnitude of c + v.  I maintain that in Marx's theory it does
>not.  I think Rakesh needs to adduce evidence that it does differ.

Well here is the full passage:

"because the price of production of a commodity that diverges in this 
way from its value enters as an element into the cost price of other 
PRICE quite apart from the divergence that may arise for the 
commodity itself from the difference between average profit and 
surplus value. " P. 309

This is how I understand it:

So we have

        c     (v  +  s)   V
A.    100    150   100  350
B.    200    180   120  500

Output Transformation on the basis of r=.349 (220/630)

        c     (v  +  s)   P
A.    100    150    87  337
B.    200    180   133  513

Now let us assume means of production sold at 10% above the value 
which has been transferred from this (we'll make no adjustment for 
v); I read Marx as saying that this will not affect the total value 
since the value of the means of production as consumed in the output 
has not been changed.

So it still all has to add up to 850,  but the mass of surplus value 
will vary in inverse direction to the rise in cost price. So the rate 
of profit will now drop to .289

        c     (v  +  s)   P
A.    110    150    75  335
B.    220    180   115  515

So we see that price-value deviations on both the input and output 
side have contributed to the determination of how prices diverge from 

Again while distributional changes effected by the transformation of 
the inputs affects the mass of surplus value and the rate of profit, 
it must be remembered that the  reason that the total value can 
contain an excess of value at all is that  the use of labor power 
allows for surplus labor to be objectified in the final product.

That labor has gone unpaid is the reason why there is surplus value 
left after the capitalist has covered the direct and indirect labor 
for which he has paid.

Now Andrew could ask me what happens if the means of production sold 
so above value that cost price would more than swallow up the total 
value as indirect and direct labor; my reply would be that such 
production would not be undertaken or bankruptcy would be filed. 
There would be no negative surplus value--there would simply be no 
surplus value and perhaps not sufficient value for the replacement of 
k either.

Andrew includes another objection about which Julian has inquired. 
I'll take it up in another post sometime in the evening. Back to work.

Yours, Rakesh

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