[OPE-L:7704] Absolute rent

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Mon Sep 23 2002 - 04:27:30 EDT

the question seems to me not to be whether the composition of capital 
tends to increase in gold production but rather whether the capital 
engaged in gold production is, and remains, lower than average in its 
composition (technical, organic and value).

  If one is manufacturing a refrigerator or a car or shoes one needs 
to work up and transform raw materials, e.g., metals, glass, rubber, 
raw cotton etc. This kind of circulating constant capital is not 
needed much in the mining of a precious metal (the cynadisation 
process makes use of some chemicals of course); and for this reason 
Marx suggests that the composition of capital in mining will tend to 
be lower than the social average. To  be sure, there is machinery, 
and more machinery is technically required as well as economical in 
the working of  mines as they are exhausted, and surely the running 
of that machinery incurs energy costs. So you are certainly correct 
that there is good reason to believe that the composition of capital 
will tend to increase in mining, though the economic disincentives 
for investment in long lived fixed capital remain.  And the 
composition will also be increasing elsewhere.  So there does not 
seem to be a good reason to expect that the composition of capital in 
gold production and mining generally will close in on the already 
greater and also upward moving average composition of total capital.

But this is only how I understand Marx's reasoning which I have made 
no effort to confirm empirically, so your skepticism is appreciated.

You also write:

>I don't see how one can argue that the gold-mining capitalists make
>the average rate of profit yet still appropriate the "extra surplus
>value".  If they  appropriate extra s then wouldn't their rate of profit
>tend to be higher than the average?

Yes, the gold capitalists make more than the average rate of profit 
but they only themselves pocket the average rate of profit as the 
extra surplus value is appropriated by landed property. I am sorry 
that I was not clear.

In response to Makoto's post, I think one clarification should be 
immediately made.

There are two reasons why a money commodity does not have a price of 

1. money does not have a price as price is the expression of value in 
terms of the money commodity. This is Fred's point.

2. M'-M/M in the money producing commodity sector should not be set 
equal to the average rate of profit as it is in the bulk of 
industrial branches. This is what Michele, Fred and I have all been 

Now let us say that by price of production we mean only that M'-M/M 
tends to be equal to the average rate of profit.

This raises at least four questions:

i. did Marx think the commodity output of all the industrial branches 
would tend to exchange at their prices of production?

ii. what are the conditions of possibility for the output of a 
capitalist industry to exchange at its price of production?

iii. Is the money commodity  likely to be a member of the class of 
commodities which do tend to exchange at their prices of production?

iv. Is gold in particular likely to exchange at its price of production?

I think the answers to questions 1, 2 and 4 are all no.

In response to Makoto, I elaborated on my negative answer to question 
3 in 7631.

I attempted something of an answer to question 2 in 7574.

These two posts passed without comment.


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