[OPE-L:6358] Re: recent science and society and Fred M's interpretation

From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Fri Jan 18 2002 - 10:26:21 EST

On Wed, 16 Jan 2002, Gil Skillman wrote:

> Hi, Fred.  You write:
> >In brief answer to your question, Marx's theory explains the determination
> >of the general rate of profit on the basis of law of value at the macro
> >level, which is then taken as given in the determination of prices of
> >production at the micro level.  No other theory is able to make this
> >crucial connection.
> This statement raises more questions, at least in my mind, than it answers.
> 1)  What is the "law of value" in this context, and what mechanism assures
> its "law-like" operation at the macro level, understood as analytically
> prior (otherwise it could not be "taken as given") to the determination of
> prices at the micro level?  And if there is no clear mechanism, why should
> this be considered a valuable or valid contribution?

I am not sure what you mean by "mechanism" here, and why this should be a
requirement for a valid theory.  Marx's "law of value" is the assumption
that the new-value component of the price of commodities is proportional
to the quantity of current abstract labor require to produce these
commodities.  On the basis of this assumption, the following important
phenomena of capitalist economies are derived: the determination of the
total surplus-value, or dM, in the capitalist economy as a whole,
conflicts over the length of the working day and over the intensity of
labor, inherent technological change, the falling rate of profit, inherent
tendency toward crises, etc.

Volume 3 of Capital is mainly about the distribution of surplus-value, or
the division of the total surplus-value (as determined in Volume 1) into
individual parts, first into equal rates of profit across industries, and
then the further division of surplus-value into industrial profit,
commercial profit, interest, and rent.  In this theory of the distribution
of surplus-value in Volume 3, the total amount of surplus-value is taken
as given (as determined in Volume 1).  In particular, in Part 2, the
general rate of profit (the ratio of the total surplus-value to the total
capital invested) is taken as given in the determination of prices of
production for individual commodities.  

This is the rigorous theoretical connection between the macro and the
micro in Marx's theory of surplus-value.

> 2) *Why* is "[n]o other theory able to make this crucial connection," at
> least in the non-tautological sense that phenomena determined at the macro
> level are held in turn determine micro outcomes?  Why do you need *Marx's*
> "law of value" (whatever that is) to assert this?

What other theory first determines the rate of profit at the macro level
and then uses this to determine the prices of individual prices at the
micro level?


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