[OPE-L:7677] Re: Re: Re: Re: Moving on...

From: Gil Skillman (gskillman@mail.wesleyan.edu)
Date: Tue Sep 17 2002 - 18:39:46 EDT

Hi, Fred, you write:

>Hi Gil, I will respond in terms of constant capital, but the same argument
>also applies to variable capital.
>It is true that the constant capital that Marx took as given in his theory
>of surplus-value in Volume 1 and in his theory of prices of production in
>Volume 3 is eventually explained (in Volume 3, after prices of production
>are determined) as equal to product of the quantities of the means of
>production times the unit prices associated with the prices of production
>of the means of production (see point #6 in 7652).

Granted. But isn't it also true that "the constant capital that Marx took 
as given in his theory of surplus-value in Volume I" must necessarily be 
the sum of inputs of means of production times their respective prices, 
*whatever* these prices are (in particular, whether or not they are 
understood as "prices of production" in the sense you use below), and 
whether or not these prices have yet been "explained"?  Could constant 
capital represent *anything else* but such a product?  If so, what?

>   However, this does not
>mean that Marxs theory is the same as Sraffas theory, because unit prices
>in Marxs theory are derived in an entirely different way from the unit
>prices in Sraffas theory.  Unit prices in Sraffas theory are derived
>simultaneously with the rate of profit.

This is an answer to a different question than the one I asked, which is 
more basic, and thus analytically prior to the question of how prices of 
production are "derived" in the respective accounts.  The more basic 
question I'm asking is:  isn't it true that the magnitude of constant 
capital (and thus that for variable capital) taken as given in Marx's 
account is equal to the vector product of means of production and their 
respective input prices (*not* their "prices of production"), however the 
latter are determined, and whether or not they have been "explained"?

>   Unit prices in Marxs theory are
>derived by dividing the prices of production of each commodity by the
>quantity of each commodity. The prices of production are derived by adding
>the average profit to the given constant capital and variable capital in
>each industry, where the average profit is equal to the general rate of
>profit (already determined prior to prices of production) times the total
>capital invested in each industry.  Therefore, the unit prices in Marxs
>theory are not the same as the unit prices in Sraffas theory.

Again, you're answering a different question than the one I asked.  I'm not 
asking yet about the "derivation" of prices of production under either 
account; I'm asking if it's not necessarily the case that the monetary 
magnitudes of constant capital that Marx takes as given in Volume I. are 
equal to the vector products defined above.  One reason I'm asking this 
more basic question is hinted at by your answer, which *assumes* a 
theoretical conclusion that is in dispute, namely that the "average profit" 
can in fact be determined *prior* to prices of production, such that it is 
possible to *arrive* at prices of production by *augmenting* constant and 
variable capital magnitudes according to a *predetermined* "general rate of 
profit".  Marx, and thus you, are *asserting* that the general rate of 
profit can be determined analytically prior to prices of production, and 
thus at minimum that it is *logically possible* to make this prior 
determination.  Thus you have the burden to prove this assertion rather 
than simply asserting it.

>Marxs method of taking constant capital as given in Volume 1 is not just
>to "keep the argument simple," because prices of production have not yet
>been explained in Volume 1.  Therefore, constant capital (the actual
>money-capital invested to purchase means of production) must be taken as
>given, and explained later, after prices of production have been

Again, this is answering a different question than the one I asked.  I 
never asked if constant capital magnitudes were determined by "prices of 
production," I asked if they weren't necessarily determined by the 
*purchase prices* of the respective inputs.  And it seems to me that your 
following comment answers my question in the affirmative.

>As for Marxs example in Chapter 9, please note that constant capital is
>calculated in this example by multiplying the actual price of the cotton
>times the quantity of cotton.  The actual price of cotton has not yet been
>explained, but it is taken as given in the explanation of surplus-value in
>Volume 1.

Yes. This is exactly what I said:  in these two examples, Marx arrives at 
constant capital magnitudes by multiplying constant capital inputs by their 
respective purchase prices (which are of course taken as given for the 
purpose of the examples) and multiplying the result.

>Please note also that Marxs logic in the beginning of Chapter 9 is exactly
>what I am suggesting.  The "money constant capital laid out" is assumed to
>be $410 and the "money variable capital expended" is assumed to be
>$90.  The end result of the production process is a commodity worth $590,
>and therefore a surplus-value equal to $90.  The original, given capital
>is now changed from M to (M+dM), from $500 to $590.  No discussion of
>physical quantities or unit prices here.

Yes, and it's also consistent with exactly what I am suggesting, as per the 
examples he subsequently gives.  Constant capital magnitudes are determined 
via the vector products described earlier.  Notice therefore that the 
determination of "prices of production" is simply not (yet) at issue here.


>On Sun, 15 Sep 2002, Gil Skillman wrote:
> >
> > Fred, thanks again for the references and the extensive summary of your
> > argument.  With your leave, I'd like to take it step by step, in order to
> > figure out where our points of necessary disagreement are, if any exist.
> >
> > Your first point:
> >
> > >1. C and V taken as given, as quantities of money-capital
> > >
> > >I argue that, in Marx's theory, the quantities of constant capital and
> > >variable capital are TAKEN AS GIVEN, PRESUPPOSED, as the two components of
> > >the initial money capital (M) invested in the first phase of the
> > >circulation of capital to purchase means of production and labor-power,
> > >respectively. The initial givens in Marx's theory are NOT the physical
> > >quantities of inputs, as in Sraffa's theory.
> >
> > Granting the latter statement, which is *descriptively* accurate, doesn't
> > imply any *necessary* *analytical* difference between the two approaches,
> > does it?  That is, the monetary magnitude Marx defines as "constant
> > capital" is necessarily determined by the sum of constant capital
> > commodities used up in production multiplied by their respective purchase
> > prices, isn't it?  Doesn't Marx use exactly this formulation in 
> calculating
> > constant capital in the two examples he considers in K.I Chapter 9 (pp.
> > 327-329, Penguin)? Similarly, the monetary magnitude Marx defines as
> > "variable capital" corresponds to the wage rate paid times the units of
> > labor power employed in production, doesn't it?  Doesn't Marx invoke
> > exactly this sense in describing variable capital as "the sum total of
> > wages" at the beginning of K.I Chapter 25 (p. 762)?  Does Marx ever *deny*
> > that constant capital and variable capital are respectively determined in
> > this manner?  If not, couldn't the fact that Marx does not *in every
> > instance* resolve magnitudes of constant and variable capital into vector
> > products of input prices and input requirements reflect a wish to keep the
> > argument simple, rather than the desire to make any particular
> > *theoretical* commitment, especially since he assumes, beginning in K. I
> > Chapter 6, that commodity prices are always proportional to their
> > respective labor values?
> >
> > Gil
> >
> >

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