[OPE-L:5643] Re: Marx's theory as a quantitative theory

From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Tue May 22 2001 - 12:13:25 EDT

Nicky, thanks very much again for your helpful posts.  Thanks especially
for reminding me of Geert and Michael's "ideal precommensuration".  In
thinking more about "ideal precommensuration", I think I realize more
similarities between VF theory and my interpretation of Marx's theory than
I previously thought, and I think I also discovered what seems to a
somewhat surprising (to me) underlying source of our differences.  See
what you think.  

1.  Nicky says (and Geert and Michael say) that, according to VFT, labor
potentially creates value-added, but value-added is not proportional to

We need to distinguish here between IDEAL value-added (as in "ideal
precommensuration") and ACTUAL value-added, right?  As I understand it,
IDEAL value-added (y) IS proportional to labor-time; i.e.

	y = mi li

Is this correct?  If so, then the VF determination of IDEAL value-added
has the same logical structure and the same functional form as my
interpretation of Marxs' determination of value-added - both are
proportional to labor.  In both theories, labor is assumed to be
determined independently of value-added, and then to determine value-added
(in part).  For example, an increase of labor causes value-added to
increase proportionally.  

Significant differences remain, especially over the precise definition and
determination of "labor" (and also of mi, the monetary expression of
labor).  But there does not appear to be any deeper methodological
difference here regarding the method of determination of IDEAL
value-added.  In the case of IDEAL value-added, systematic dialectics does
not appear to be incompatible with this type of determination.  There is a
"causal link" between labor and IDEAL value-added.

2.  ACTUAL value-added is different.  ACTUAL value-added is in general not
equal to IDEAL value-added.  Therefore, ACTUAL value-added, unlike IDEAL
value-added, is in general not proportional to labor. 

As I understand it, the reason why ACTUAL value-added is not equal to
IDEAL value-added is that supply is in general not equal to demand,
i.e. the actual demand has not been correctly anticipated, right?  

But what if supply = demand?  In this case, ACTUAL value-added = IDEAL
value-added, right?  If so, then in this case ACTUAL value-added IS
proportional to labor-time.  So in the case of S = D, even the
determination of ACTUAL value-added has the same logical structure and
functional form as my interpretation of Marx's determination of

In VF theory, "actual value-added" appears to be a component of actual
MARKET PRICES, as affected by S not = D, and unequal rates of profit.  In
other words, not a component of long-run AVERAGE PRICES, with S = D and
equal rates of profit.  "Actual value-added" is related to DISEQUILIBRIUM
prices, not to EQUILIBRIUM prices.  Please correct me if I am wrong on
this important point.

3.  I argue that Marx abstracted from market prices in all three volume of
Capital.  Or, expressed differently, Marx assumed S = D in all three
volumes of Capital.  In other words, Marx's theory in Capital is not
intended to explain actual market prices (although it can easily be
extended to explain market prices), but rather to explain long-run average
prices, which are the "centers of gravity" around which actual market
prices fluctuate.  Abstract labor is assumed to determine these long-run
center-of-gravity prices, not the actual market prices.  

Marx's theory is at a very high level of abstraction in all three volumes,
even in volume 3.  Volume 3 continues to assume S = D, in the more precise
sense of equal rates of profit.  Volume 3 is about the determination of
the general rate of profit and prices of production, and the further
division of the total surplus-value into merchant profit, interest, and
rent.  Divergences of S and D are of minor importance compared to these
bigger and broader questions.  According to Marx's theory, divergences of
supply and demand do not affect the magnitude of the total surplus-value,
but only affect the distribution of this total amount among individual

I would be happy to review the extensive textual evidence to support this
interpretation (please see my paper "Marx's Concept of Prices of
Production as Long-Run Center of Gravity Prices" on my
website: www.mtholyoke.edu/~fmoseley).

4.  Would not VF theory agree that the long-run average value-added (with
S = D) is equal to the ideal value-added, and hence is  proportional to

5.  If this is correct, then the differences between my abstract labor
interpretation of Marx's theory and value-form theory seems to depend to a
large extent on what the theory is supposed to explain:  long-run average
prices or actual market prices, equilibrium prices or disequilibrium
prices.  I hadn't realized this before.  

Nicky and Geert and Michael and others, am I right about this - that the
VF concept of "actual prices" are market prices, with S not = D and
unequal rates of profit? 

Thanks in advance for your replies.  I look forward to further discussion.


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