[OPE-L:5019] Re: double divrgence

From: Allin Cottrell (cottrell@wfu.edu)
Date: Wed Feb 21 2001 - 17:00:40 EST

I had written:

> >But we also have statements where Marx says (again, I
> >paraphrase; the quotations are well known): "There are two reasons for
> >divergence between values and prices of production: (1) the price of
> >the means of production employed in the production of the given
> >product differs from the value of those means of production, and (2)
> >the profit realized in the sale of the product differs from the
> >surplus value embodied in that product."

And Alejandro replied:

> The statetment (I think there is only one, although Allin refers to
> "statements") is on pp. 308-309, Capital III, Penguin.

The other similar statement is in Theories of Surplus Value.

Me again:

> >The obvious problem is that if "cost-price plus" is a proper statement
> >of Marx's view then "double divergence" is nonsense: there is one and
> >only one source of divergence between price of production and value,
> >namely the discrepancy between surplus value and (equalized) profit.


> There is another possible interpretation of this statement which
> is in my published article in IJPE. The gist of the matter is that
> Marx is not giving, as Allin wishes, a *definition of value* here
> but indicating simply that the cost price (K) --which is a common
> magnitude for both values (W) and production prices (P)-- differs
> from the "the value sum of the elements of which this component of
> price of production is composed" (p. 309), i.e. that "value sum"
> of the inputs differs from the cost price itself.

I don't think Marx is _defining_ value here; I think he's making
explicit an implication of his definition of value as the labour time
required to produce a commodity.

He's _not_ just saying that the cost price differs from the sum of the
values of the means of production -- he's saying that from this
difference "arises a deviation in prices of production from values".
It's there in black and white:

  We have seen how a deviation in prices of production from values
  arises from: 1) adding the average profit instead of the
  surplus-value contained in a commodity to its cost-price; 2) the
  price of production, which so deviates from the value of a
  commodity, entering into the cost-price of other commodities as one
  of its elements, so that the cost-price of a commodity may already
  contain a deviation from value in those means of production consumed
  by it, quite aside from a deviation of its own which may arise
  through a difference between the average profit and the

> From this cannot be inferred, as Allin and the whole dualist tradition do,
> that value is defined as the sum of "cost price in value terms" + surplus
> value". This formulation is simply not given by Marx nor is the ackward
> category "cost price in value terms", which was literally invented by
> dualist authors.

I think it can be inferred.  Marx's phrase for what you call "cost
price in value terms" is "the sum of the values of the elements which
make up" cost price.  (See the next para to the one quoted above.)

> Well, Allin, but the main problem for your interpretation is that
> you take the passage in question completely out of context. As
> anyone can check, Marx is referring there to the commodities of
> average composition and it's in this context that the passage
> appears.

The quotation occurs by way of summary of previous discussion, at the
very start of the section on commodities of average composition and
before Marx gets into that topic proper.  There's no indication that
the point is specific to such commodities, and it makes no theoretical
sense to suppose it is intended to be specific in that way.

> If I'm not mistaken, you read that passage as saying that Marx defines
> respectively the value and production price of commodity j in the following
> way:
> Wj = Kvj + svj
> Pj = Kpj + prj
> Wj: value
> Pj: production price
> Kv: "cost price in value terms"
> Kp: "cost price in price term"
> sv: surplus value
> pr: profit

Yes, that's my view.

> Now, I also believe that you agree that, for Marx, in the case of
> commodities of average composition value = price (a clear
> statement about this is on p. 264).

No, I disagree.  For commodities of average composition in money
terms, price may or may not equal value.  (Price can diverge from
value if the price of the means of production diverges from value).
Marx's statement on this is not particularly clear.  What he's saying
is that it's "as if" price equals value for commodities of average
composition in money terms, in the specific sense that their price is
not affected by changes in the wage.

There are two statements by Marx in this context:

1) "[S]ince [the surplus value embodied in a commodity of average
  composition] equals the average profit, the price of production =
  cost-price plus profit = k+p=k+s; i.e., in practice it is equal to
  the value of the commodity"

And a few sentences later:

2) "The practical result is therefore the same as it would be if its
  products were sold at their real value. For if commodities are sold
  at their actual values, it is evident that, other conditions being
  equal, a rise, or fall, in wages will cause a corresponding fall or
  rise in profit, but no change in the value of commodities..."

I take 2) to be correct and 1) to be misleading.  In effect, the
phrase "in practice" in the first quote has to be understood in the
light of the second quote.

I set out my analysis of this point at length in post #3676
and I don't think I can improve on it.

Allin Cottrell.

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