[OPE-L:5570] Re: surplus-value change from vol. 1 to vol. 3?

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Mon May 14 2001 - 12:15:31 EDT

re: Fred's 5568

Basically Fred our argument comes down to the treatment of constant capital.

Your argument is basically this: the value transferred from the means 
of production has to be value of the money that would be needed to 
purchase the used up means of production at current costs because 
only in this way would Marx's formulas for the determination of 
surplus value in vol 1  and the thesis that the mass of surplus 
cannot change as a result of distributional shifts remain intact.

You are implicitly saying that keeping these two theses intact is 
more important than allowing for the problem of double divergence 
which would only make sense if Marx believed that the value 
transferred from the means of production was the value that the used 
up means themselves embodied, instead of the value of the money 
needed to purchase the used up means at current costs.

You are saying that there is a choice in the interpretation of Marx's 
text, and you have made the correct one. You will henceforth proceed 
as if Marx never talked about double divergence.

There are however at least two other problems with your interpretation:

(a) you add up money magnitudes on the left side to get a value 
magnitude on the right side, as Paul C has noted.

(b)if the value of the money needed to purchase an input can somehow 
be transferred to the output, why does that input itself have to be a 
value? An input could be land, but then the money needed to rent the 
land should according to your interpretation be transferred to the 
output; and in this case the labor theory of value would be broken.

So as I see it there are at least three problems with your formula 
for the determination of value.

>On Fri, 11 May 2001, Rakesh Narpat Bhandari wrote:
>>  I mean that  s actually depends on whether the means of
>>  production were bought above or below value (assuming that labor
>>  transfers gratis their value in toto to the output).
>Similarly, Rakesh had also argued in (5542), that after the determination
>of prices of production: "the sum of surplus value in any branch could be
>higher or lower depending on whether the means of prod [are] sold below of
>above value ..."
>In other words, Rakesh is arguing that THE MAGNITUDE OF SURPLUS-VALUE
>CHANGES from Volume 1 to Volume 3, because the assumption regarding the
>price of the MP changes from V1 to V3 -  right, Rakesh?

Again not exactly. A nominal change may not be a real change, as 
Gouverneur intimates.

   Let's say that after the complete transformation in the 
Bortkiewicz-Sweezy mode the means of production (Dept I) sell below 
value and luxuries (Dept 3) sell above value. This would  allow a 
nominal increase in the mass of surplus value (as long as workers 
transfer gratis the value of the means of prod in toto) but in real 
terms  the capitalists wouldn't now be able to consume a larger mass 
of use values since the price of luxuries would be increased in the 
complete transformation.

So distributional changes are alone not enough to increase surplus 
value in real terms.

Secondly, the magnitude of surplus value does indeed change in vol 3 
with the introduction of ground rent which affects the price of wage 
goods (the magnitude of surplus value produced in a given year also 
changes in vol 2 with the introduction of the possibility of reduced 
turnover time). So again I do not think your strict basis for marking 
off vol 3 (or vol 2) from vol 1 holds; nor do I understand the 
importance of doing so.

Third, Marx's important argument, derived from Ricardo, is not that 
the mass of surplus value cannot change as a result of distributional 
changes (after all the wage struggle effects distributional changes 
which affect the mass of surplus value) but rather that total value 
is determined previous to its resolution into cost price and surplus 
value. I have found Rubin's analysis of Ricardo here very helpful.

>1.  I said in my last post that I do not know of one single passage in
>Volume 3 or elsewhere iin Marx's manuscripts in which he stated that the
>magnitude of surplus-value changes from V1 to V3.  I know of many passages
>in which Marx stated that the profits of individual industries could be
>(and generally are) different from the surplus-values produced in each
>industry.  But I know of no passage in which Marx states that the
>surplus-value itself changes from V1 to V3.

I argue of course that this is implied in his recognition of the 
problem of double divergence.

>So I asked Rakesh in my last post for references to passages in which Marx
>stated that the magnitude of surplus-value changes from Volume 1 to Volume
>3.  Rakesh replied with two references - the same two passages we have
>been discussing for a long time: C.III.: 264-65 and C.III: 308-09.
>But, Rakesh, I find nothing in these two passages about a change in the
>magnitude of surplus-value.

But then you are also excising the problem of double divergence from the text.

>  So, would you please quote for us the
>specific sentences from these passages in which you think Marx is stating
>that the magnitude of surplus-value changes from V1 to V3.
>Thanks very much in advance.
>2.  Beyond the lack of textual evidence, a change in the magnitude of
>surplus-value as a result of the detemination of prices of production (as
>Rakesh suggests) contradicts one of the basic premises of Marx's theory -
>that the magnitude of surplus-value DOES NOT CHANGE as a result of the
>distribution of surplus-value.  I have documented in two papers the
>textual evidence on this basic premise, and would be happy to review these

  I have emphatically argued that the mass of surplus value cannot be 
enlarged by the distributional shift itself in the complete 
transformation exercise; and in the case where it can be diminished 
the sole source of surplus value remains surplus labor.

>Therefore, either Rakesh's interpretation is wrong about the mangitude of
>surplus-value changing as a result of the determination of prices of
>production, or Marx was wrong when he stated many times that the magnitude
>of surplus-value does not change as a result of the distribution of
>surplus-value.  I think Rakesh's interpretation is wrong.

In Marx's transformation exercise he does not transform inputs, and I 
agree with you that there is no reason for him to do this.

I am also not really saying that in Marx's example the mass of 
surplus value changes as a result of distribution.

I am saying that strictly speaking we cannot assume that the value 
transferred from the means of production is the same as their flow 
price. This then makes it impossible to assume that we can start with 
cost prices, choose a rate of surplus value and determine what the 
value is for each branch and total capital.

We cannot move from left to right in the manner in which Marx 
proceeded in writing up his transformation tables because the value 
transferred from the means of production cannot be directly know.

What we do know however is that whatever the value of the output of 
each branch and total capital, it is greater than cost price for each 
branch and total capital, respectively. So "the basic fact remains 
that, taking the social capital as a whole, the cost price of the 
commodities that this produces is less than their value, or than the 
price of production which is identical with this value for the mass 
of commodities produced." Capital 3, p. 265

But let's say that the inputs are in direct or simple prices, then 
Marx's transformation is incomplete and what Marx  held invariant in 
the incomplete transformation may need to be relaxed in the complete 

So I have argued that in the case of a complete transformation 
problem--which I agree with you is based on an misinterpretation of 
Marx's text since he never admitted therein that the inputs had been 
left in the form of commodity values--there should only be one 
invariance condition (as Winternitz argued).

I have argued that any changes in the mass of surplus value brought 
about by the complete transformation do no damage at all to the labor 
theory of value. In fact if we understand the labor value theoretic 
critique of the adding up theories then it will be clear that we have 
a basic principle for carrying out the complete transformation: at 
all points, cost price and surplus value should remain resolved and 
antagonistic components of total value.

After I made that argument, Allin and Ajit argued that I was 
mistreating money. But since they allow for the inputs to be in the 
form of direct prices, this means that there is already an implied 
value of money (that is to get at the input direct prices the value 
of the inputs had to be multiplied by some m). Once the value of 
money is given, it has to be allowed to remain constant since 
otherwise one could get changes in total value simply from changing 
the value of money. Gouverneur is very good on this.

Now as for my interpretatin being wrong,  this could be true;

  but I don't excise parts of Marx's text just because they don't fit 
my interpretation; I don't make the mistake of violating the basic 
principle that value is not directly observable and measurable; I 
don't confuse money and value magnitudes in my formulas for the 
determination of value; I don't open the back door to break the labor 
theory of value by allowing the value of the money needed to buy any 
input enter into the value of the output.

And while I don't do any of these things, I do not in any way 
undermine the exploitation theory of value and surplus value.

So overall I think my interpretation is the better one.

Yours, Rakesh

This archive was generated by hypermail 2b30 : Sat Jun 02 2001 - 00:00:07 EDT