[OPE-L:4580] Re: Re: Re: Re: Re: Re: reply to Fred (1)

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Mon Nov 27 2000 - 17:28:44 EST


Just to add to my reply.

The surplus value determined in vol 1 is certainly hypothetical--I do 
not understand your point here.  Marx rules out the realistic 
scenario of an increase of dM through the depression of wages below 
the value of labor power,  Surplus value is explained in the 
hypothetical situation of all commodities exchanging at their full 
value.  So a realistic scenario is not allowed to  play out in his 
gedanken experiment.

Marx also stipulates the raw materials and means of production are 
bought at their full value; however, raw materials have been 
violently procured from non capitalist modes at prices below value. 
Such violence has obviously served as a fillip to surplus value 
production in the history of the capitalist system, but Marx rules 
out this source of surplus value in the hypothetical analysis of 
*Capital*. By stipulation then he ensures that in his thought 
experiment the only source of surplus value can be a commodity which 
even if at exchanging at its full labor value can through its use be 
source of greater labor value (Steven K sees no reason to isolate 
labor power in this regard).

In the real history of capitalism, though, dM can indeed be derived 
from the forcible extraction of raw materials from non capitalist 
modes below value or the depression of wages below the value of labor 
power or the depreciation of money if wages do not keep up with the 
price level(which is really the depression of wages below the value 
of labor power). All this is ruled out by Marx--not because they 
cannot be a real source of surplus value (or the reason why M' minus 
M is the magnitude that it is) but because he thinks the real history 
of capitalism can best be understood if we analyze it in its pure 
form, i.e., if all exchanges are assumed to be executed at full value 
in a self-enclosed capitalist system.

As for the other point:

Of course the mass of surplus value and the cost price remain 
unchanged if one does not transform the inputs. If one doesn't modify 
cost price, it is simply a matter of distributing a given sum of 
surplus value.  Marx did not go to the bother of transforming the 
inputs; if one is only to transform the outputs, it is certainly a 
matter of distributing that predetermined sum in terms of a given 
cost price--so I do not deny your or Alejandro's textual evidence. It 
says what it says. But I don't read it as relevant to the point at 

   If Marx *had* transformed the inputs, he would have argued that 
given an output of given value and price (its monetary expression), 
any modification of the cost price implies an inverse change in the 
mass of surplus value. You won't comment on this point of mine 
because you are certain that there is no need for the cost price to 
be modified by a transformation of the inputs.

In fact you seem to be saying that since Marx wanted to make vol 3, 
part 2 only a matter of the distribution of a predetermined sum of 
surplus value, he has to have ruled out any factor which would change 
that sum . So this means that Marx had to have ruled out the need to 
modify cost price since such modification would change the 
predetermined sum of surplus value--so the cost price already has to 
be determined as if the inputs sold at market prices or prices of 

But if Marx had assumed the inputs sold in such terms, it is possible 
that capitalists had bought means of production and raw materials at 
prices below their value.  Marx does not think that purchase below 
value can be the source of surplus value in the system as a whole 
because one's gain will tend to be another's loss.

So the question becomes whether dM can be explained even if one 
stipulates  that all  commodities are bought and sold at their full 
value. This assumption still applies to the inputs even after Marx 
has transformed the outputs in vol 3, ch 9.

  The means that the input means of  production and means of 
subsistence in Marx's transformation tableaux are indeed in the form 
of simple prices, i.e., prices determined by (or proportional to) 
their full value, not prices of production.

Yours, Rakesh

>Rakesh, thanks for your (4568).  My responses below.
>On Thu, 23 Nov 2000, Rakesh Narpat Bhandari wrote:
>>  re Fred's 4567
>>  >
>>  >1.  Because I think Marx was trying to explain the ACTUAL surplus-value
>>  >produced, not a HYPOTHETICAL "surplus-value" (equal to the "direct
>>  >price" of surplus-goods).
>>  As I said, I don't think Marx is interested in the actual magnitudes
>>  but in the relations between the variables. So the actual sum of
>>  surplus value or profit rate is not important; what is important is
>>  how they are determined
>>  dM/M= (s/v)/ (c/v) + 1, ignoring turnover time.
>>  So even if c and v (cost price) have to be modified once Marx drops
>>  the controlling assumption that the inputs sell at simple prices
>  > (commodity value x m), the variables are still related in the same
>  > way. Since it is these relationships which are important--along with
>>  the time paths for the variables--it hardly matters if Marx holds to
>>  assumption of exchange at simple prices.
>I disagree.  I think the actual magnitude of total surplus-value
>determined in Volume 1 is very important for Marx (not just how
>surplus-value is determined), because the total surplus-value that is
>determined in Volume 1 is then taken as given (predetermined) in the
>analysis of the distribution of surplus-value in Volume 3.  In other
>words, the total surplus-value determined in Volume 1 becomes the
>fundamental quantitative premise of all of Volume 3.  That is why the
>magnitude of surplus-value is so important.  Volume 3 is mainly about how
>this given total surplus-value is divided into individual parts, first
>into equal rates of profit and then the further division of surplus-value
>into industrial profit, merchant profit, interest, and rent. 
>Rakesh, I ask again: How do you interpret all the passages throughout
>Marx's manuscripts in which he explicitly stated this key quantitative
>premise of Volume 3 (which I have documented in two papers)?  Do you think
>that Marx did not recognize that his theory of prices of production
>contradicted this key quantitative premise, which he repeated so many
>times, including in many discussions of Part 2?
>You seem to be saying that what Marx determined in Volume 1 is a
>HYPOTHETICAL surplus-value:  the "simple price" of surplus
>goods.  According to your interpretation, this hypothetical surplus-value
>determined in Volume 1 first must be "transformed" into actual profit in
>Part 2 (including a change of magnitude), and then this actual profit is
>divided into individual parts.  But there is never a hint in Marx's texts
>(that I know of) that the key quantitative premise of a predetermined
>total surplus-value applies only to Parts 4-7 of Volume 1 and does not
>apply to Part 2.  Indeed, this quantitative premise is explicitly stated
>in many discussions of Part 2.  I don't think there can be any doubt that
>Marx intended this premise to apply to all of Volume 3, including Part 2. 
>>  >2.  Because Marx's analytical framework is the circulation of capital:
>>  >
>>  >	M - C ... P ... C' - M'
>>  >
>>  >and the circulation of capital begins with M, the money-capital invested
>>  >to purchase MP and LP.  These quantities of money that initiate the
>>  >circulation of capital are the initial givens in Marx's theory of the
>>  >circulation of capital (and especially of how M turns into M').  These
>>  >quantities of money-capital that initiate the circulation of capital are
>>  >identically equal to the prices of the MP and MS, but these quantities of
>>  >money-capital are not derived from these prices.  Rather they are taken as
>>  >given directly, as the "first form of appearance" of capital in the
>>  >circulation of capital.
>>  Fred, this misses how much Marx controls what goes on in his thought
>>  experiment which is the 3 volumes of Capital.  He isolates a closed
>>  capitalist economy, allows no foreign trade, no credit, keeps the
>>  value of money constant, lets in only two classes...and conceives of
>>  all goods as if they were perfect aliquots of total value.
>>  That is, Marx stipulates that all commodities have been (in general)
>>  produced by a capital of average organic composition. This means that
>  > all commodities exchange at prices proportional to their labor values.
>Rakesh, where did Marx stipulate this?  I would appreciate some
>references.  (If you have already answered this question, please forgive
>me.)  I know of no such passages in which Marx "stipulates" (explicitly
>states?) that all commodities are produced by capitals of the average
>composition of capital (i.e. of identical compositions of capital).  So I
>would be very interested to read any such passages. 
>>  So I do not think Marx takes the sale of inputs as givens;
>Rakesh, how do you interpret all those passages (which I have documented
>in several papers) in which Marx explicitly states that the initial M in
>the circulation of capital (M-C ...  etc.) is "presupposed" or
>"postulated" or "taken as given" or "a given precondition", etc.?  What do
>you think Marx meant by "presupposed", etc. in these passages?  Was he
>just being sloppy in the use of these key logical terms?  Wouldn't this be
>surprising, since he was such an expert on logic?
>>  he fixes
>>  that sale at value or prices proportional to value in order to
>>  isolate surplus value in what he calls the pure case (this of course
>>  being the methodological step to which Gil has objected).
>In other words, you think Marx isolates a hypothetical surplus-value, not
>the actual surplus-value, which then has to be transformed into the actual
>profit in Volume 3.  Why would Marx do that?  Why not explain the actual
>surplus-value in Volume 1?
>>  This means that when the assumption of exchange at value or simple
>>  prices proportional to value is dropped, it has to be dropped for
>>  both the inputs and the outputs. And Marx himself recognizes that his
>>  transformation procedure only relaxes the assumption for the outputs.
>As I have argued before, I don't think Marx said that he failed to
>transform the cost price (C and V).  Rather, I think he said, in
>effect: now we can see that the given cost price (the "given
>precondition"; C.III. 265) is not equal to the value of the means of
>production and means of subsistence (as provisionally assumed up to this
>point), but is instead equal to the price of production of the MP and
>MS.  The given cost price remains the same, but we now understand more
>fully the determination of this given amount. 
>Alejandro R and Andrew K and I (independently) have presented several key
>passages in which Marx explicitly stated that "the cost price is the
>same" for both values and prices of production.  Rakesh, how do you
>interpret these passages?
>Thanks again for this discussion.

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