[OPE-L:7635] Re: Re: Re: Re: Re: Chris A on VF theory

From: Riccardo Bellofiore (bellofio@cisi.unito.it)
Date: Tue Sep 10 2002 - 07:06:55 EDT

Dear Chris and Nicky, unfortuntaley I have no time to answer to both 
in full. So, for the moment I have to limit myself to few, and very 
short, answers to some of Chris's points.

>The fundamanetal value relation is
>Value of a commodity is a function of livinglabour + dead labour
>[labour in susbsistence goods appears nowhere here; all the dead labour is
>in means of production]
>Then it is realised hence
>Value = c + added value
>v appears nowhere here. It only appears when we ask what happens to the
>added value
>Value = c + v + s
>But this is ex post derivation. To read this as a determination of Value is
>a horrendous error of vulgar economy Marx polemicised against.
>ESSENTIALLY v is not advanced, it is produced (regardless of when wages are
>actually paid; tho' it is worth recalling Marx stresses the workers always
>give credit to the capitalist.).

we surely agree on the first point, on the fundamenbtal value 
relation. on wages the situation is unclear: of course, I agree that 
v is not advanced, if you mean the elements of variable capital, that 
is (to be short) the commodities consumed by  workers, and also if 
you refer (though here I would not use the verb produce) to necessary 
labour. btw, OF COURSE I cannot but agree that real wages are NOT 
advanced. I am a follower of the circuit approach, an admirer of 
Keynes's Treatise on Money, and I think that in ALL these approaches 
AS in Marx the wage is advanced in MONEY terms. Where there is some 
problem? On the fact that I think that all this notwithstanding Marx 
thought and said that the real wage had to be taken as given before 
production. how to justify and reconcile these two conflicting 
outlooks? I've tried to do that several times in my writings, and I 
have to ask readers to look there now. in short what I think is that 
there were GOOD reasons why Marx thought that real wages had to be 
thought as given, that actually this simply means that some kind of 
target (yes, 'equilibrium') real  wage bargained in the labour market 
is at first supposed to be realized ex post, and that this is 
relevant for Marx's theory of exploitation, more than that that it 
actually is one of the relevant differences of Marx say from 
Wicksell's monetary view.

so, we agree on what you say about what Marx says about wages and v. 
but this does not settle the issue at all. the problem is: can the 
idea of a real wage as given ex ante (what Marx actually assumed) be 
compatible with the idea that the wage is advanced in money, and that 
the actual real wage is defined ex post? my answer is: yes.

I simply add that my view here, as on exploitation, has been heavily 
influenced by Rosa Luxemburg's chapter on The Wage in her 
Introduction to Political Economy, where more or less she said that 
the necessary labour has to be taken as given and pre-determined 
(because in Marx the real wage is taken as given), whereas surplus 
labour and surplus value has to be taken as variable and determined 
only as a consequence of class struggle and technical change.

that is: for my intellectual story, the view on exploitation (= 
living labour and the role of class struggle over the 'use' of labour 
power), the view on wage (= taken as given in real terms, though in a 
monetary economy), and even my method of comparison (= origin of 
surplus value showed by Marx thorugh a counterfactual where living 
labour is extended over and above necessary labour) has the SAME 
origin (Rosa Luxemburg, plus some Schumpeter).

>Now if we turn to V2 this seems to depict a circuit where M is shown to
>purchase factors including LP. But of course just because it is a circuit M
>cannot be taken as given; it is in fact identical with Mprime as is obvious
>in two of the circuits and obvious if one grasps what a circuit is. In a
>circuit it makes no sense to speak of advances. Everything is both before
>and after everything else. Of course there are orthogonal flows into and
>out of the circuit, expenditures and receipts; but this makes little
>More seriously, the circuit depicts already constituted capital as such a
>cycle of expenditures and receipts and in this way completely mystifies the
>essential relations. Although it is mid-way between the essentialities of
>V1 and the illusions springing from the profit form of V3 it is closer to
>the latter in being - like it - at the level of appearances (albeit
>objective appearances). An intelligent bourgeois like Schumpeter could no
>doubt accept the circuit as an accurate description while still rejecting
>a) the truth that delta m is a function of SL appears nowhere in this
>circuit; to the contrary delta m appears to result from all the purchased
>factors operating together -
>b) the truth that workers produce their own wages appears nowhere in this
>circuit; on the contrary the depiction of the circuit hides the fact
>workers give credit to capitalists. -
>c) if one makes a violent abstraction from the reality of the circuit and
>breaks in at M then the placing of the purchase of labour power appears as
>an advance; but this is seriously misleading for all the above reasons.
>(btw what did Marx say about the 'wage fund'??)

here the disagreemnet is as expected, and I don't have the time or 
the possibility to delve on it. we disagree strongly on finance. I 
certainly think that, whatever marx thought and said, if we want to 
analyze a capitalist economy, and a true monetary economy (tthat is, 
to analyze surplus value extraction in a monetary economy) what is 
needed is a MACRO and CLASS analysis; that in a MACRO setting we have 
to distinguish 'bank' from 'firms' as AGGREGATES, and if you do that 
seriously the whole of firms need at the start of the MACRO circuit 
the money they cannot produce from banks. I think this is quite 
compatible with Marx, more than that that it resolves deep problems 
in the way Marx framed his argument (of course, our view on 
exploitation , or my view of the wage as extended in my papers, is 
not the actual Marx: we have always to distinguish interpretation and 

>The appearances, in other words, distort the essential relations.

I agree enthusiastically here.

>>>?? Abstract labour *is* immediately social
>>disagree: it is a process, for me: it is in production 'latent', and
>>though the SAME activity it is  the opposite of  concrete labour
>>which is 'becoming' abstract labour in the full sense of the world,
>>yes: with final abstraction completed in the phase of exchange, but
>>still the abstract labour in the commodity it is not IMMEDIATELY
>>money. money is *immediately* social.
>  >
>There is a distinction to be made between concrete dissociated labour which
>needs to be transformed into a recognisably social shape, and abstract
>labour which is conceptually immediately social albeit that it is socially
>visible only with money; otherwise I fear we are back to the identification
>of AL with physiology which of course is non-social.

you see, here is where all precipitates. I cannot write this way. you 
seem to say, if abstract labour is not immediately social, labour in 
the production process is heterogenous. you are RIGHT. that's the 
problem in most vft. they don't get that if the stress is on money as 
general equivalent, with no INDEPENDENT and FOUNDATIONAL role for 
money as finance (in the macro sense above, which is denied if you go 
towards the idea that the circuit has indeed to be first analysed as 
the interlocked set of circuits: and you are back to Walras, and no 
true need for finance), then it's TRUE, you have abstract labour only 
ex post, and the 'content' as labour which is heterogenous. but then, 
damned the 'labour' in the value theory. you can have the link 
between abstract labour in production (which is only latent and 
potential) and abstract labour in exchange (which is private labour 
in the process to becoming social, that is money) ONLY if you have 
some monetary ante-validation, which allows to treat living labour as 
subject to abstraction and socially homogeneous prior to final 
exchange. how? only with finance (in my sense). that's where Rubin, 
who came near to the truth, probably failed. no finance. then, the 
ensuing Rubin school, if they do not do a move like mine (sorry, I 
have to be quick), if coherent have to finish in those kinds of 
positions (very different: Eldred, De Vroey, Benetti, may be Geert, 
maay be Nicky etc.) who jettison labour in production and time.

in fact, I think that marx should have included finance more or less 
after his counterfactual comparison, saying more or less something of 
the following: "wait a minute: but how can I have living labour as 
socially homogeneous in production, so that extending it over and 
above necessary labour gives surplus labour, surplus value etc? only 
if I see that, now that I see that commodities are in fact 
capitalistically produced commodities, and that this production has 
to be financed, this finance is the ante-validation, and has no 
ground in gold as a commodity". already in K1.

I understand that this answer is very quick, and I apologise for 
that, but now I cannot do any better.

one final word on my attitude. what interests me in Marx? the fact 
that he is (to my knowledge) the only theorist who stresses the 
exploitation of labour in capitalism as a monetary economy. for me 
the correct view on the monetary economy cannot but incorporate the 
view of finance offered by the Wicksell-Schumpeter-Keynes line. if 
this is incompatible with Marx, then Marx is no good (but I don't 
believe that). is Marx's theory of exploitation sensible in a finance 
theory of capitalism: in my view, yes; more than that, the finance 
theory of capitalism resolves what are open issues in Marx, and 
sublates the limits of the streams which have made Marx unilateral, 
Ricardian (who took the Ricardian Marx) and  the vft as long as it 
abandons labour as the 'content' of value and does not stress that 
the sequence:

labour POWER - LIVING labour - OBJECTIFIED labour

is more or less the same as the monetary sequence mapped as

money as finance - production - money as the general equivalent


Riccardo Bellofiore
Dipartimento di Scienze Economiche
Via dei Caniana 2
I-24127 Bergamo, Italy
e-mail:   bellofio@unibg.it, bellofio@cisi.unito.it
direct	  +39-035-2052545
secretary +39-035 2052501
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homepage: http://www.unibg.it/dse/homebellofiore.htm

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