[OPE-L:7689] Re: Re: Chris A on VF theory

From: Christopher Arthur (cjarthur@waitrose.com)
Date: Thu Sep 19 2002 - 08:39:27 EDT

Response to Riccardo's 7635

>>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.

No. I do not mean the real wage, I mean the money wage. It is completely
incorrect to say 'in Marx the money wage is advanced'. I gave you above a
careful summary of Marx's actual argument just to refute this. I repeat: in
Marx the money wage is not advanced it is paid out of new value ex post.
Once one understands this then two points arise: at a more concrete level,
if wages are paid ex post how does this fit in with a period of production?
I dealt with this in my 7573 and I concluded it was a contingent matter
whether or not wages are paid before or after  the end of period of
The second point is that regardless of the empirical questions,
conceptually v (in money) is produced not advanced.
In Marx's depiction of the circuit this is disguised because it is
convenient to group all expenditures together. And because it is a circuit
the question of 'advances' becomes nugatory.

 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 see no problem about a real wage determined for a period by the general
conditions of class struggle, while the money wage wobbles around this.

>>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'??)

Do you think of yourself as a wage-fund theorist?

>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

For me the disagreement pertains to levels of abstraction. Let us assume
(what is not true) that capitalists always raise finance from banks. Why
should I still insist on abstracting from banks? Because it is necessary to
grasp the concepts involved on the basis of the minimum conditions required
to make a concept meaningful. For me Marx's greatness is precisely the
parsimony of his conceptual development, a rigorous refusal to muddle up a
given level of abstraction with irrelevant concretions. So I think he was
right to have no bank finance in V2. Investments can always come from
retained earnings or share issues.
And there is no need as yet to worry about non-commodity money ex nihilo.

>>>>?? 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.

As before, it is a question of levels. I would be seriously disturbed if I
had to theorise a central determinant of production on the basis of a
secondary phenomenon such as banking.
The problem of abstract labour is that Marx introduces it in ch 1 when the
only thing in play is circulation. So the assumption may be made that
labour in production is heterogenous. If he had postponed the issue until
capitalist production had to be theorised then we see the importance of
understanding that as a socially-determined, form-determined, process, the
immediate production process is where labour is constituted as abstract.
I think we agree about that, but then I do not understand why you want to
deny abstract labour is immediately social; in capitalism labour is social
only as abstract and v.v.
Where we go beyond orthodoxy is in saying that it is not only M as
equivalent that abstracts, but M as capital has already done so in
form-determining production.
My disagreement with you is on banks. Industrial capital carries out the
monetary ante-validation regardless of where finance comes from. The money
- capital circuit is the moment where this happens, where M and Mprime are
linked, and this penetrates the other circuits of course. So P...P is
always already bearer of these abstractions, and this has consequences for
how P is carried on.
As I said before, I would bring in your  distinction between industry and
finance K only when we consider 'abstract capital'. Labour is equalised in
production for the market, capital is equalised in the struggle for finance.



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