# [OPE-L:5540] Re: Re: Re: Re: the assumptions necessary for the two equalities to hold?

From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Fri May 11 2001 - 00:52:57 EDT

```On Wed, 9 May 2001, Rakesh Narpat Bhandari wrote:

> Fred, believe it or not, I agree with your argument about the prior
> determination of surplus value (Steve K is the one who has been your
> most important critic here). Remember you convinced me that the since
> the inputs are already in the form of prices of production they do
> not have to be transformed. What I am saying is that while indeed the
> magnitude of surplus value is determined before its distribution
> through the formation of prices of production, we cannot exactly know
> what the magnitude of that mass is. In his transformation tables,
> Marx assumes that he can exactly determine what the mass of surplus
> value is. He picks a rate of surplus value out of thin air and then
> assumes that the value transferred from the means of production is
> the same as their flow price. This allows him to calculate a mass of
> surplus value for each branch and total capital.

Rakesh, I think your are misinterpreting the determination of
surplus-value in Marx's theory.  You seem to suggest that the magnitude of
surplus-value depends in some way on the magnitude of constant
capital.  But that is incorrect.  Let me explain.

1.  Marx's theory of the magnitude of surplus-value is presented in
Chapter 7 of Volume 1.  According to this theory, surplus-value is
determined by the following implicit equation:

(1)	S = m (L - Ln)

where m is money value added per hour, L is the total working day, and Ln
is necessary labor ( = V/m).   In Marx's numerical example to illustrate
his theory in Chapter 7, m = 0.5sh/hr, L is first 6 hours and then 12
hours, and Ln is 6 hours.  In the first case (L = 6 hrs), S = 0; and in
the second case (L = 12 hrs), S = 3 sh.

Please notice that neither constant capital nor the value transferred from
the means of production appears in the above equation.  In other words the
magnitude of surplus-value is INDEPENDENT of C or value transferred.  It
makes no difference for the determination of the magnitude of S whether C
= 24 sh or C = 240 sh.

2.  Marx emphasized this point in Chapter 9 of Volume 1 in the
introduction of his key concept of the rate of surplus-value.  Since S is
independent of C, S should be related to variable capital only.  That is
what the rate of surplus-value does: S/V.

3.  In Chapter 11 of Volume 1 ("The Rate and Mass of Surplus-value"), Marx
took variable capital per worker (Vi) and the rate of surplus-value
(RS) as given, and then determined the mass of surplus-value produced by n
workers employed by a given capital, according to following equation (with
different notation):

(2)	S = RS (Vi) n

(3)	S = RS (V)		where V = n Vi

In Marx's main numerical example in Chapter 11, RS = 1.0, Vi = 3 sh,
n = 100 workers, and thus S = 300 sh.

Please note once again that the mass of surplus-value does not depend in
any way on constant capital or the value transferred from the means of
production.

4.  In Marx's transformation tables in Chapter 9 of Volume 3, Marx
determined the magnitude of surplus-value produced in each industry in the
same way as in Chapter 11 of Volume 1.  In this case, Marx took the total
variable capital in each industry and the rate of surplus-value as given,
and then determined the magnitude of surplus-value produced in each
industry according to equation (3) above.  The column headings in Marx's
table, from left to right, begin as follows (parentheses added):
capitals (C + V)
rate of surplus-value (RS)
surplus-value
The surplus-value in the third column is determined by the product of the
variable capital and the rate of surplus-value in the first two columns,
i.e. is determined as in equation (3) above.  Since RS =1.0, S = V in each
industry.

Please note one more time that the S in these tables is determined
independently of C.  That is the whole point of the transformation
problem.  Or, rather, that is the reason why there is a transformation
problem: because S does not depend on C.

5.  Rakesh, do you see what I mean?

How exactly do you think Marx determined the magnitude of surplus-value in
Chapter 7 of Volume 1?  What equation expresses this determination?  How
do you interpret Marx's equation for the mass and rate of surplus-value in
Chapter 11 of Volume 1?

Similarly, how do you think Marx determined the magnitude of surplus-value
in each industry in his transformation tables in Chapter 9 of Volume
3?  You say that Marx picks a rate of surplus-value out of thin air and
"THEN ASSUMES THAT THE VALUE TRANSFERRED FROM THE MEANS OF PRODUCTION IS
THE SAME AS THEIR FLOW PRICE.  This allows him to calculate a mass of
surplus value for each branch and the total capital."  (emphasis added)

But, Rakesh, that is not how Marx determined the mass of surplus-value in
each industry.  The assumption about the value transferred from the means
of production plays no role whatsoever in the determination of the
surplus-value in each industry.  Rather, the surplus-value in each
industry depends only on the variable capital and the rate of
surplus-value.

I look forward to further discussion.