[OPE-L:4547] reply to Fred (7)

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Mon Nov 20 2000 - 04:37:16 EST

>8. You have emphasized the following passage from Chapter 9 of Volume 3 to
>support your interpretation that the magnitudes of C and V (or the "cost
>price", the sum of C and V) change as a result of the determination of
>prices of production:
>"The development given above also involves a modification in the
>determination of a commodity's cost price.  It was originally assumed that
>the cost price of a commodity equaled the value of the commodities
>consumed in production.  But for the buyer of a commodity, it is the price
>of production that constitutes its cost price and can thus enter into
>forming the price of another commodity.  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 therefore
>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 inn producing
>it, it is always possible to go wrong.  Our present investigation does not
>require us to go into further detail on this point.  It still remains
>correct that the cost price of commodities is always smaller than their
>value.  For even if a commodity's cost price may diverge from the value of
>the means of production consumed in it, this error is the past is a matter
>of indifference to the capitalist.  The cost price is a given
>precondition, independent of his, the capitalist's, production, while the
>result of his production is a commodity that contains surplus-value, and
>therefore an excess value over and above its cost price."  (C.III: 264-65)
>I have a different interpretation of this passage, which I have discussed
>in several papers, most recently in my "new solution" paper (RRPE, 32:2,
>pp 300-01).  I don't think Marx is saying that the magnitude of the
>cost-price changes as a result of the determination of prices of
>production.  Rather, I think that Marx is saying that the cost price
>remains the same because it is a "given precondition", both before and
>after the determination of prices of production.  The "given
>precondition" does not change.  What changes is the EXPLANATION of this
>"given precondition". After the determination of prices of production, we
>have a more complete explanation of this "given precondition" than we did
>before.  Before we assumed that the given cost price was proportional to
>the labor-values of the means of production and the means of
>subsistence.  But now we can see that the cost price is also affected by
>the equalization of profit rates across industries.  Therefore, if one
>assumed that the cost price is proportional to these labor-values, that
>would be "wrong".  But the magnitude of the given cost price remains the
>same.  And the magnitude of the surplus-value also remains the same, as
>the excess of the value of commodities over this given cost price.

I read Marx as saying that while he has indeed gone wrong in the 
calculation of the prices of production because he assumed that the 
inputs sold at value, it still remains true that however the cost 
prices are modified, they will remain less than both the sum of value 
and the sum of prices of production represented by the commodity 

And this gives us a test for Marx's theory. If the modification of 
cost price by the transformation of the inputs requires that the 
entire total value or price must be resolved into cost price, thereby 
leaving nothing for surplus value, then Marx's transformation 
procedure would indeed collapse upon its completion. But this is not 
what happens if one follows the set of equations or the iterative 
method which I propose.

I will comment on Alejandro's new textual evidence at a later date
Yours, Rakesh

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