**Next message:**Michael Williams: "[OPE-L:5543] RE: RE: William of Ockam's Razor and Political Economy"**Previous message:**Ajit Sinha: "[OPE-L:5541] Re: Re: Re: Re: Re: Re: Re: Re: William of Ockam'sRazor and Political Economy"**In reply to:**Fred B. Moseley: "[OPE-L:5540] Re: Re: Re: Re: the assumptions necessary for the two equalities to hold?"**Next in thread:**Fred B. Moseley: "[OPE-L:5551] Re: Re: the assumptions necessary for the two equalities to hold?"**Reply:**Fred B. Moseley: "[OPE-L:5551] Re: Re: the assumptions necessary for the two equalities to hold?"**Messages sorted by:**[ date ] [ thread ] [ subject ] [ author ]

Fred, I must say that I think your 5540 misses my argument almost entirely. In short, you present evidence from Capital where Marx keeps intact an assumption which I am arguing he only relaxes well into Capital 3, ch 9. Since in vol one and in the transformation tables Marx IS STILL ASSUMING that the value of the money advanced as constant capital is the same as the the value of the consumed means of production themselves and that the former thus only reappears in the same magnitude in the output, Marx is right to say that they (the value of the money advanced as constant capital and the value of the consumed means of production as embodied in the output) basically cancel each other out, making the sum of surplus value in any branch depend entirely on the rate of exploitation and the variable capital advanced. My whole argument turns on what happens when that assumption is dropped. And all your textual evidence is drawn from the text before that assumption is dropped, and what I call the inverse transformation problem introduced. So you have not responded to my argument. >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. before we get to the formula for surplus value, let us remember that given your equation for the determination of value, Marx's talk about double divergence can only be logical nonsense. Isn't this basically what your formula for the determination of value is: value of the money advanced as constant capital + money value added by live labor = total value. Leaving aside Paul C's queries about confusion between money and value magnitudes, you admit that given your equation for the determination of value (though the above may not be accurate) double divergence is simply logically impossible, right? I truly don't understand why you won't offer some explanation of why Marx at least twice lapsed into logical incoherence? What was he trying to say? Why did he make this mistake? I am truly interested in your answer. Well, you want to skip ahead to the determination of surplus value alone. This is no problem. > 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. All these formulas from vol 1 simply and totally evade my point. Marx can make these assumptions in vol 1; the assumptions are dropped in vol 3, and the crucial one is dropped even after Marx has written up the transformation table in Capital 3, ch 9. So your evidence from the transformation tables (below), much less vol 1, just miss my point. Since Marx assumes that the value of the means of production or more specifically of the consumed means of production as that value appears in the output is the same as its price, he can further assume that the value of the money advanced as constant capital and the value of the consumed means of production as they appear in the final output simply cancel themselves out. So it then follows that surplus value will depend on variable capital and the rate of exploitation alone. C will not enter into it, as you say. What I am saying is that in vol 3 Marx no longer assumes that the value transferred gratis by labor from the means of production is the same as the flow price of the machine. Once this assumption is relaxed, it is now possible that the value of the money advanced in any one branch as constant capital may be different than the value of the consumed means of production as they appear in the final product. And to state my interpretation yet again: after Marx shows why given the difference between s and p the value of the output differs from its price of production, he then allows for the possibility for the first time that the value of the consumed means of production as it appears in the output could not have not the same as their price either. Well, lo and behold, we now finally see that there are two reasons why the value of a commodity differs from its price of production. And this remains what you cannot make sense of. Let us look then yet again at my two simple equations Value = Lmp + Ln PrProd = k + p each of the respective terms differ from each other: (1) while value is determined by the value of the consumed means of production, price of production is calculated on the basis of cost price into which the price of production of the consumed means of production--not their value--enters; (2) while value is determined by the new value added over and above the value of the means of production transferred gratis by labor from the means of production, price of production is determined in terms of an average rate of profit which "apportions" surplus value. > >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. But I am not denying this. Since in these transformation tables Marx IS STILL ASSUMING that the value of the money advanced as constant capital will reappear in the same magnitude in the product which embodies the value of the consumed means of production, he is right--to repeat myself--to say at this point that the sum of surplus value in any branch will depend entirely on the rate of exploitation and the variable capital advanced. At this point in the presentation it is not possible that the sum of surplus value in any branch could be higher or lower depending on whether the means of prod sold below or above value because it is still being assumed that value transferred is the same as the flow price. Once Marx gives us reason to see why value and price of production differ, he then goes back and revises this assumption which he has been carrying since vol 1 and which is built into the transformation tables. In short, he then recognizes an inverse transformation problem. > 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. But Fred by turning to the transformation tables, you are making no contact with argument, for in those tables Marx has not yet considered the inverse transformation problem. >5. Rakesh, do you see what I mean? I see that implicit in your argument is this formula for the determination of a value of a commodity value of the money advanced as constant capital + money value added by live labor = total value. And since that is your formula, you have to have Marx talking logical nonsense about double divergence. Do you see what Allin and 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? As I explained above, all these formulas are fine given the assumptions which Marx has not yet dropped. > >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. Well in Marx transformation tables assumptions about the value transferred from the means of production do play a role in the determination of the output's value which is then contrasted with its price of production. Yours, Rakesh ps thank you seriously and copiously though for the thought provoking and lucidly argued posts > >I look forward to further discussion. > >Comradely, >Fred

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