[OPE-L:7719] Re: M-C-M' and S Pt. 1: Method

From: gerald_a_levy (gerald_a_levy@msn.com)
Date: Fri Sep 27 2002 - 18:51:10 EDT

----- Original Message -----
From: "Gil Skillman" <gskillman@wesleyan.edu>
Sent: Friday, September 27, 2002 6:09 PM
Subject: M-C-M' and S Pt. 1: Method

Fred, many thanks for this detailed response.  I like how you've broken the
 discussion up into steps; it should make it easier to pinpoint necessary
 points of disagreement.  I'll address just your first point in this post.

 Since that point deals with questions of method and presupposition, I'll
 just say that my position in our discussion is not based on imposing any
 external "hypothetical" framework on Marx's exposition in Vol. I; I'm
 taking my cues from what Marx actually wrote.  Of course, I might be
 mistaken in my reading of these cues, but any of us might equally be;
 that's where the benefit of this sort of discussion comes from, in my view.

 >1.  I argue that the quantities of money-capital in Marx's theory of the
>circulation of capital in Volume 1 refer to (or are intended to
>represent) REAL, ACTUAL quantities of money-capital in circulation in the
>real capitalist economy.  Marx's theory of the circulation of capital,
>from the very beginning in Volume 1, is about the real, actual capitalist
>economy (as a whole), not about a hypothetical model and hypothetical
>magnitudes.  The initial M in the circulation of capital refers to real
>quantities of money-capital invested in means of production and
>labor-power in the capitalist economy as a whole.  This real initial M -
>and its component parts, C and V - are taken as given in Marx's theory of
>value and surplus-value in Volume 1 (more on this below).

 I agree with this characterization as far as it's possible to in light of
 what Marx actually wrote in the chapters under discussion.  On one hand, I
 have no problem with the suggestion that Marx is referring to "REAL, ACTUAL
 quantities of money-capital in circulation," but see a serious caveat,
 based on what Marx actually wrote, with the suggestion that Marx's
 theoretical argument at this stage does not involve "a hypothetical model
 and hypothetical magnitudes."  The caveat is that *in between* his
 introduction of the circuit of capital M-C-M' in Chapter 4 and his
 definition of the "component parts" of M, C and V, in Chapter 8, Marx
 imposes the postulate that all commodities exchange at their respective
 values, even while noting at the end of Ch. 5 that [even] "average prices
 do not directly coincide with the values of commodities.." [p. 269].  This
 is, therefore, a "hypothetical model" of the actual, aggregate circuit of
 capital, since, by Marx's own acknowledgement, commodity prices don't
 typically correspond to values; and therefore the latter constitute
 "hypothetical magnitudes" insofar as they are representations of commodity

 So first I must ask: do you agree that Marx introduces at least this
 element of "hypothetical magnitudes" in a consequently "hypothetical model"
 of the circuit of capital, M-C-M', *before* proceeding to the treatment of
 C and V in chapter 8?

 Second, if you agree to the first question, isn't it then *necessarily* the
 case that the magnitudes of C and V subsequently "taken as given" by Marx
 must be *consistent* with Marx's prior stipulation that all commodities
 exchange at their respective values?  Would it  be legitimate for Marx to
 postulate exchange at value if this were inconsistent with the magnitudes
 of C and V realized in a "real capitalist economy"?

 Third, to anticipate, do you agree that Marx understands commodity values
 to be determined by the labor times "socially necessary" to produce
 them?  If so, how do you understand SNLT, and thus labor values, to be

 >  The final dM
>refers to the actual surplus-value produced in the real capitalist economy
>as a whole.  The purpose of Marx's theory of surplus-value in Volume 1 is
>to explain the origin and magnitude of this real dM, not to explain a
>hypothetical magnitude (dM*) (a different magnitude), that must later be
>transformed into the actual dM in Volume 3.

 Again I agree subject to the caveat noted above: in Volume I, Marx posits
 the condition that the existence of dM be explained on the basis of the
 particular counterfactual hypothesis that all commodities exchange at their
 respective values; this stipulation is relaxed in Volume III, only to be
 replaced by the counterfactual that the rate of profit is equalized across
 sectors.  In Volume I, therefore, the "real dM" must be consistent with the
 postulate of exchange at value, given Marx's specification of how commodity
 values are determined in a "real capitalist economy."  In Volume III, the
 same dM must be consistent with the dictates of capitalist competition,
 including an equalized rate of profit (another hypothetical modelling
 condition, since in "real capitalist economies," this equalization is never
 actually achieved).  Although the magnitude dM in question is the same, per
 your representation, the (hypothetical!) conditions under which it is
 analyzed differ dramatically.  Therefore the consistency of asserting an
 identical magnitude of dM under the two dramatically different hypothetical
 settings must be *demonstrated*; it cannot legitimately be
 *assumed.*  *Marx* introduced the hypothesis of exchange at value, after
 all, not the "real capitalist economy."

 Relatedly, to anticipate, the logical consistency of the assertion that
 under the volume III the conditions, the rate of profit corresponding to
 the same dM as in Volume I is determined *analytically prior* to the
 (hypothetical!) prices of production in Volume III must be *demonstrated*;
 it can't simply be *assumed.*

 >I think this interpretation is in keeping with Marx's general
>philosophical method of what Ilyenkov calls "materialist dialectics" ,
>according to which Marx's theory is based on "real" or
>"concrete" abstractions, rather than purely logical or mental
>abstractions.  The concepts in Marx's theory, including the key concepts
>of capital and the circulation of capital, are abstracted from the real
>capitalist economy, and therefore refer to actual phenomena in the real
>capitalist economy.  They are not purely theoretical concepts that have
>been invented out of our heads.

 Well, the extent to which this representation is valid is open to
 debate--no one has actually seen, touched, smelled, heard or tasted a labor
 value, for example, so it sure seems like a "purely...mental abstraction"
 to me.  But putting that aside, I would again be willing, in the context of
 Marx's Volume I analysis, to agree only subject to the caveat that Marx
 assumes that the "real" "concrete" entities called commodity prices are
 hypothetically proportional to the theoretical counterparts Marx calls
 labor values.

 >Ilyenkov describes the circulation of capital as referring to "*a real
>fact* - the fact that money put in capitalist circulation, passing through
>all its metamorphoses, brings a return - surplus-value.  Then one has to
>go back to establish the conditions which make this fact possible."  (*The
>Dialectices of the Abstract and Concrete in Marx's `Capital'*,
>p. 282; emphasis in the orginal)  This "real fact" - the production of
>surplus-value - is the single most important characteristic of capitalist
>economies.  Marx's theory of surplus-value in Volume 1 is intended to
>explain this "real fact", i.e. the actual magnitude of surplus-value in
>the real capitalist economy as a whole.  Marx's theory of surplus-value in
>Volume 1 is not intended to explain a different hypothetical magnitude of
>surplus-value that follows from a theoretical model.

 Subject to the caveat that this Volume I account is premised on, and thus
 must be shown to be consistent with, Marx's hypothesis that all commodities
 exchange at their respective values, I agree, and my position in this
 discussion proceeds from this premise.

 >You (Gil) (and many others), on the other hand, seem to interpret the
>quantities of money-capital in Marx's theory of the circulation of capital
>in Volume 1 as only HYPOTHETICAL magnitudes.  These hypothetical
>magnitudes are all proportional to labor-times.  The initial M* is divided
>into C* + V*, and these two hypothetical magnitudes of money-capital are
>proportional to the labor-times required to produce the means of
>production and the means of subsistence, respectively.  The final dM* is
>another hypothetical magnitude that is proportional to the labor-time
>required to produce surplus goods.

 Let me clear up any ambiguity about this:  my position in our discussion is
 based on Marx's own representation of his analytical procedure in Volume I,
 adding only the legitimate stipulation that this procedure must be
 internally coherent.  Thus, I invoke the condition that commodities
 exchange at their respective values *only* because *Marx* explicitly
 postulates that "real" commodity prices correspond to these "HYPOTHETICAL
 magnitudes."  I didn't make up this stipulation; Marx made it.  But I then
 ask, what does Marx's explicitly made assumption that all commodities
 exchange at their respective values, along with Marx's explicit argument
 that values are determined by SNLT, imply for the determination of C and V,
 given M?  These stipulations, so far as I can see, *dictate* that the real
 values of C and V are in fact determined by production conditions and the
 sectoral composition of output, insofar as it is seemingly impossible
 otherwise to be true to Marx's postulate and theoretical claim.

>From this perspective it seems that you (Fred) would prefer to ignore that
 Marx in fact made these analytical steps, at least insofar as they might
 have necessary implications for the relative and absolute magnitudes of C
 and V, given M.  To put it another way, these implications would
 necessarily arise in any "real capitalist" economy in which commodities
 happen to exchange at their respective values, so logical coherence
 requires that any such implications must be acknowledged.

 >If these hypothetical magnitudes are the subject of Marx's theory in
>Volume 1, then all these hypothetical magnitudes must later be transformed
>into actual (different) magnitudes in Volume 3.  C* and V* must be
>transformed into the actual magnitudes of money-capital, C and V.  And S*
>must be transformed into S.

 Rather, granting that C and V represent actual magnitudes, they must be
 shown to be consistent with Marx's assumption of exchange at value and his
 inference that value magnitudes are determined by SNLT.  If this
 consistency is not established, then the possibility unavoidably arises
 that *either* postulating actual magnitudes of C and V is inconsistent with
 the purely hypothetical postulate that commodities are exchanged at their
 respective values, *or* that these postulates are inconsistent with Marx's
 assertion that value magnitudes are determined by SNLT.

 >Gil, do I understand you correctly?

> No, but I'm looking forward to further discussion.


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