[OPE-L:5633] Re: Marx's theory as a quantitative theory

From: Andrew Brown (Andrew@lubs.leeds.ac.uk)
Date: Mon May 21 2001 - 09:06:38 EDT

A response to Nicky and restatement of some points I tried to 
make in a previous post:

On 19 May 2001, at 13:34, nicola taylor wrote:

> Capitalist production, characterised by the capital-labour relation, takes
> place through the *interplay* of value-form and the exchange relation in
> the market and concerns the nexus of value and price.  The first point is
> that the value of the commodity appears only as a money price, and this
> price is anticipated "ideally" prior to production as "ideal money" - only
> then does the captitalist purchase labour - on the market - for a money
> wage.  Geert Reuten coined the term "ideal precommensuration" to describe
> the anticipation of the relative value of labour-power and products before
> any actual commensuration in the market.  The concept of ideal
> precommensuration thus establishes the *necessary* interdependence of
> production and circulation in capitalism.  Secondly, and most importantly,
> precommensuration implies that the valorisation process dominates the
> technical process forcing the doubling of the labour process into a
> technical process (use-value production) and valorisation process
> (value-production).  To the extent that productive activity is *determined*
> prior to production by the imperatives of valorisation, form dominates
> content and capitalist production is constituted as form-determined. It is
> in this sense that causality is systemic.    

1) re 'ideal prices'. Marx quite consistently, explicitly and 
continually stressed the ideal aspect of value. The key point is that 
a single commodity is said, in everyday discourse, to have a 
'value'. It is said to have this despite the fact that there is no 
intrinsic material signification of this intrinsic value. The universal 
equivalent (money), serves as the (mediate) signifier of the intrinsic 
value of the relative form. Basically commodities come to the 
market with a price label attached. This label is attached by the 
seller and this seller, in conditions of 'normal exchange', has no 
choice but to price the good at the objectively determined 'going 
rate'. It is such a going rate that the capitalist producer has 'in 
mind' through all stages of the circuit of capital (including the 
production stage). This rate confirms the objectivity of *value*. The 
determination, both qualitiative and quantitative, of the going rate, is 
the basic question for value theory. 

2) To restate what I tried to say in a previous post, the fact of 
precommensuration, and more generally the fact of systemic 
causality, is quite consistent with the view that labour and labour 
time cause price. The *system* is such that labour and labour time 
causes price and price magnitude. Indeed, it is relatively 
uninteresting to say there is systemic causation, without going 
further and unearthing the specific causality implied in any given 

> >From a VFT perspective, the embodied-labour theory of surplus value
> advanced by Marx in chapter 7 gets in the way of a full development of the
> insight into pre-commensuration that he himself presents in embryonic form.
>  i.e. a theory of form-determination is implicit in Marx's recognition that
> production and circulation processes interpenetrate, so that production
> processes are premised on precommensuration - in money terms.  What after
> all 'distinguishes the worst architect from the best of bees is that the
> architect builds the cell in his mind before he constructs it in wax'
> (p.284).  A result emerges that 'already existed ideally'  Here Marx is
> talking about the technical labour process; why didn't he applied the same
> insight to the valorisation process?  If he had done, I submit, he would
> not have had recourse to the dubious simplifying assumptions set out in ch.
> 7 (simple labour, average technical conditions of production, a commodity
> theory of money and wage rates equivalent to the price of the subsistence
> bundle).  

Marx is not confused, he is simply a (dialectical) materialist, who 
knows that 'given money quantities' do not pop up out of thin air, 
nor out of 'convention', nor out of 'mind', rather they must relate to 
the transhistorical, social (AND material) law of the distribution of 
social labour in definite proportions. Thus the ideal aspect of value 
is just that, an *aspect*, underlain by the material aspect. 
Moreover, by chapter 7 he has just undertaken the second key part 
of his entire presentation, viz. the uncovering of suprlus labour as 
the substance of surplus value. No wonder, then, that he spends 
time exploring the nature of the labour that is the substance of 
surplus value, and demonstrating that the assumption of simple 
labour is innocuous.

There are no 'dubious simplifying assumptions'; there is a high level 
of abstraction whereby, for example, relative prices (including the 
price of labour power) are yet to be determined in the presenation; 
the transition to non-commodity money is yet to be developed; the 
differences between compositions of capital (thus technical 
conditions) are, like relative prices, yet to be developed; and 
'simple labour' is not a 'dubious' but an innocuous assumption.

> Given that, in capitalism, the allocation of labour to the production of
> different commodities is coordinated with respect to the pursuit of money
> denominated profits, ideal pre-commensuration relates value to labour.
> Fundamentally, the decision to employ labour is mediated by the purchase of
> labour power, and this depends on the price of labour power (determined by
> demand and supply, union strength, state legislation; because labour power
> is not produced within captitalist relations of production it has *no*
> pre-existing price of production) and the price of the commodities it
> produces.  

On the face of it, there may be a problem with the quantitaive 
theory that you appear to support here. Let me state the apparent 
problem such that you can later clarify. The problem is that you 
have no theory of the *level* of individual prices such as, for 
example, the price of labour power. You have simply a set of 
factors that cause it (the price of labour power, or any other price) 
to be higher rather than lower, *given* some previous level. For 
example, you might argue that greater union strength causes an 
increase in wages, but you are unable to say what determines the 
*level* of wages either before or after this increase.  At best you 
seem to have some sort of short run, localised analysis (like 
Marshallian partial equilibrium??), without any long run theory 
incoprorating 'feedback' effects, ie. without a (quantitative) theory 
incorporating the systemic aspects of price magnitude. Of course, 
a theory of price magnitude which 'explains' only fluctuations from 
given prices, where the magnitudes 'given' are unexplained, is not 
really explaining anything at all. 

Another question: Labour has a 'going rate' (see above) like other 
commodities. Furthermore, the reproduction of labour power 
requires commodities. Why, then, do you attach such significance 
to the fact that labour is not produced by a capitalist firm? 

> Athough payment of a wage motivates the move towards
> valorisation, the VFT argument that labour potentially creates value-added
> cannot therefore be read to imply that value-added is proportional to
> labour (aggregation at this level would anyway imply a fallacy of
> composition). Labour and its products are validated only in the market;
> only in circulation is it possible to determine *how much* value-added has
> been created/actualised.    

This is true empirically for a congealed abstract labour theory, but 
it is not true theoretically. In other words, 'socially necessary 
labour time' makes perfect theoretical sense, but cannot (easily) be 
measured except through the capitalist market (which itself 
introduces both systematic distortions and random distortions). 
This is one important of aspect of the distinction between intrinsic 
and external measure of value. Note also that there is an important 
distinction between value created (produced) and value actualised 
(realised in exchange) in an abstract labour embodied theory. 
Value can be produced but then destroyed through an inability to 
be realised.

Many thanks,


> In this email form, I don't think I can fully elaborate a VFT perspective -
> for one thing there are considerable differences between Chris A's argument
> that capital is *productive* (see his recent C&C argument) and the
> Reuten/Williams view that I have drawn from above.  And I don't know enough
> about *other* VFT perspectives to comment more broadly.  
> Thanx,
> Nicky    
> ----------------------------------
> Nicola Mostyn (Taylor)
> Faculty of Economics
> Murdoch University
> Australia
> Telephone: 61-8-9385 1130

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