[OPE-L:5349] value = K + S

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Mon Apr 16 2001 - 13:29:03 EDT

re 5344

Of course, in terms of the header, I would say total value => k + s 
(=> meaning to determine). Another thing to remember here is that you 
(along with Allin and Alejandro) have Marx talking logical nonsense 
on p. 309. It was hoped that  given your prior praise of Marx's 
logical rigor, you would be interested in an interpretation in which 
he is found not to have slipped into incoherence. But no such luck! 
Unfortunately I do not say anything even remotely new in this post, 
so at some point we're going to have to agree to disagree.

>Hi Rakesh,
>I am sorry that I could not respond sooner to your latest posts, but I
>just don't have time for OPEL during the week these days (especially last
>week, since my wife was out of town and I was single parenting). 
>Thanks for your patience.
>We have been discussing Section 2 of Chapter 12 of Volume 3 (and related
>passages), in which Marx explicitly stated, in algebraic form, that value
>= K + S = K + P = price of production.  The most striking thing about this
>equation is that K IS THE SAME for both value and price of production.
>Rakesh replied in (5315) that the above equation does not express the
>DETERMINATION of value, but only the RESOLUTION of value into these
>components.  I showed in (5337) that the equation value = K + S is easily
>derived from Marx's equations for the determination of value and
>surplus-value; from which it follows that, if K is the same in the above
>equation, then K is also the same for the determination of value and price
>of production. 
>Rakesh replied again in (5338) that the equation value = K + S APPLIES
>ONLY TO THE TOTAL COMMODITY or to the average commodity, not to all
>commodities.  I reminded Rakesh in (5339) of the earlier passages in
>Chapter 9 of Volume 3, in which Marx explicitly stated (again in
>equations) that K is the same for all commodities, not just the total
>commodity or the average commodity.
>Rakesh's latest reply in (5340 and 5341) argues that Marx stated the
>equation value = K + S ONLY BEFORE he (Marx) pointed out that he had made
>a mistake, i.e. that he have failed to transform the inputs "inversely". 
>However, the passage we have been discussing is from Chapter 12.

Of course! This is where Marx discusses the average commodity the 
value of which can be resolved as K+S or K+P.

>   The
>passage in which Rakesh thinks that Marx admitted that he had made a
>mistake is in Chapter 9, three chapters BEFORE Chapter 12.  So, even after
>Marx "admitted his error" (in Rakesh's view), Marx continued to state that
>value = K + S.

For the average commodity--that is what this paragraph is about.  If 
you found evidence between chaper 9 and 12 in which Marx applies the 
formula k + s for the *determination* of the value of *any and all 
commodities*--instead of as a formula for the expression or 
resolution of total commodity value or the the value of the average 
commodity--then you would have undermined my interpretation. But this 
is exactly what you did not find. For example on p. 266 Marx 
expresses the value of only *total* capital as c + v + s.

>Indeed, in the paragraph just before the one in Chapter 12 in which he
>stated again that S = value - K, from which it follows that value = K + S,
>Marx emphasized that the cost price is equal to the price of production of
>the inputs, not the value of the inputs.

Of course cost price is equal to the price of production of the 
inputs and since cost price is a given precondition--as you and 
Alejandro both correctly argue--there is an inverse transformation 
problem built into Marx's transformation tables.

>  And yet Marx went on to state in
>the next paragraph that value = K + S.

You are not denying that this paragraph is about the average 
commodity; I have shown why this formula holds for the resolution of 
the value of the average commodity (given Marx's assumptions). So 
this evidence at the very least does not support your interpretation, 

>  Following from the preceeding
>paragraph, the K in this equation must be equal to the price of production
>of the inputs, not to the values of the inputs.

This has no impact on my argument.

>Furthermore, back in Chapter 9, in the continuation of the same paragraph
>in which Marx acknowledged that K = the price of production of inputs
>(pp. 264-65), Marx stated once again value = K + S.  Therefore, the
>equation value = K + S continues to be valid even after it is recognized
>that K = the price of production of inputs.

Well, we have a different reading of the problem Marx is himself 
underlining. I agree that K is determined by the price of the 
production (or at least market price) of the inputs, not their value. 
That is why Marx should not have used them to determine the value of 
the outputs as he did in his transformation tables. THis is exactly 
why we have an inverse transformation problem. Marx jumped from the 
price data of the inputs to an inference about their value, though 
value is in principle unobservable and not directly measurable. After 
having shown why value and price of the outputs diverge, he then 
himself underlines that he should have supposed that the value of the 
inputs was proportional their price in the determination of commodity 
values. Marx's argument is perfectly logical and complete. One simply 
cannot begin with cost prices and then determine output values and 
prices of production. One has to take the output price data and infer 
what the value magnitudes have been.

>In his latest post, Rakesh also continues to argue that total value "can
>be resolved into" K + S, but is not detemined by K + S.

Right but total value = K + S. Total and individual value is 
determined by Lmp + Lc; it is then resolved into cost price and 
surplus value. Surplus value is the monetary residual once cost price 
is taken from total value, as monetarily expressed. Once that is 
understood, it is obvious that the transformation equations which 
have been written up on the assumption that inputs were in direct 
prices have been all wrong, as I have been trying to demonstrate 
Allin. But that of course is neither here nor there in our debate 
since I agree with you that Marx's cost prices in his transformation 
tables are not in the form of values or direct prices. And I agree 
with you that this is not the error to which Marx is calling 
attention on p. 265. Again, this is not small agreement, and I have 
conceded defeat in terms of my prior criticism that the inputs were 
in the form of direct or simple prices.

>  To explore this
>further, let's call the surplus-value into which value is resolved Sr.
>Rakesh, are you arguing that this Sr is a different magnitude from
>(i.e. is not equal to) the surplus-value that is determined in Volume 1 by
>the difference between new-value and variable capital?

This is not Marx's definition of surplus value. That definition 
obviously could only hold under the assumption that c=0. Marx makes 
that as simplfying assumption for the purposes of analysis; he does 
not build it into his definition of surplus value.

My definition of surplus value is total value, as monetarily 
expressed, minus cost price which is the money invested as constant 
and variable capital--in other words, M' minus M.

The definition of surplus value is a trivial thing.  The magnitude of 
surplus value however is determined by the occ and s/v, as 
demonstrated in volume 1. Of course turnover time plays a role, so 
obviously the determinants of surplus value are not fully given in 
vol 1 since turnover is analyzed in vol 2. So I don't agree with your 
strict demarcations--vol 1 is about the production and magnitude of 
surplus value, vol 2 is about circulation and realization, and vol 3 
is about distribution.

>  If so, why do you
>think these two surplus-values are not equal?  And what textual evidence
>is there for this interpretation?

I am not changing my definition of what surplus value is. Surplus 
value always *is* total value, as monetarily expressed, minus cost 
price. Volume one is largely about the determinants of the magnitude 
of surplus value  relative to the capital invested:

r = s/v divided by c/v + 1

>On the other hand, if you think that Sr = S, then, since Marx stated that
>Sr = P (total profit), then it follows that S = P, which is what I have
>been arguing all along.

There is no S in my interpretation as you have defined (new value 
minus variable capital). S is always a monetary residual, one of the 
two elements (the other being cost price) into which total value, as 
monetarily expressed, is resolved. In my interpretation S is always 
Sr. S or Sr never enter into the determination of value which is the 
sum of the value of the means of production and current labor. 
Surplus value (S) is always a resolved element (Sr).

>Furthermore, since we agree that total price of production is equal to
>total value, if S = P, then it follows that the cost price K must be the
>same in the determination of both value and price of production.

So of course in my interpretatin S equals P (assuming no interest or 
rent). As Marx goes about it, the surplus value is determined first, 
summed and then distributed as profit (P) which is then equal to (S).

>I look forward to continued discussion.

Fred, I think that if you are going to accuse Marx of logical 
incoherence, you may want to explain why Marx flubbed (at least) 
twice in underlining this problem of double divergence. In terms of 
the interpretation given by you, Alejandro, Alan F, Mino Carchedi and 
Andrew K  Marx has to be talking gibberish (here) or making gibberish 
of what he had already said (Allin).

All the best, Rakesh

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