[OPE-L:7950] Re: Re: relation of value to organic composition of capital

From: Andrew Brown (Andrew@lubs.leeds.ac.uk)
Date: Thu Nov 07 2002 - 07:31:59 EST

Re 7941

Hi there Jerry,

You mention that your reply to Simon is also a reply to my own 
posts. I actually thought that my own posts addressed the issues 
you raise here, however. I wonder if you could double check to see 
if they do indeed meet your concerns? Anyhow, let me also try to 
help by commenting directly on your post...

> I agree that there is a problem in measuring the TCC [and believe
> that, going back to the discussions by Fine and others in the 1970's,
> it was the desire to "operationalize" Marxian categories and make them
> more capable of being measured empirically that lead to some
> re-conceptions of the compositions of capital.]

I cannot stress too highly a key point that your comment seems to 
gloss over or miss. Back in the 70s (and early 80s) Fine (and 
Harris) and Weeks used the TCC/OCC/VCC distinction to deal with 
the key *theoretical* issues of Marxian economics. In the early 
stages it was the LTRPF and crisis theory (F&H 1979; Weeks 
1981; but see Fine's developments in 3rd Ed of 'Marx's Capital', 
1989, and in Caravale 1992 'Marx and Modern Economic 
Analysis'). Later developments, initially by Fine (his 1983 
'Dissenting note on the Transformation Problem', in Economy & 
Society, reprinted in 'The Value Dimension', 1986)  and then much 
later (and much more comprehensively and clearly) by Alfredo (his 
1997 C&C paper, and later work), tackled the transformation 
problem putting the TCC/OCC/VCC distinction to the fore. Thus it 
is not only or mainly a question of operationalising concepts for 
these authors. Rather it is a question of the fundamental features 
of, and debates around, Marxist economics. (Though I imagine 
Simon has a very different point of view)

> > Then we need to express the TCC in value terms.
> Herein lies the rub.  If that is the case then why have the
> distinction between  TCC and VCC to begin with?

In [7933] I tried to address this point. Basically there is a clear 
conceptual distinction between the ratio in physical terms (the 
TCC) and the ratio in value terms (both the OCC and the VCC). The 
TCC, as a vector divided by a scalar is not in general comparable 
across time and space but this doesn't make it meaningless, nor 
does it make it a value category. It does mean that for the 
purposes of economic theory we have to 'assess' the TCC in value 
terms. For it is the 'value assessment' of the TCC that counts, e.g. 
in the determination of the profit rate. The question is, which values 
should we use to assess the TCC? Now, in the dynamic case 
(addressed by Simon, and the easiest one to understand) then one 
can see the OCC as a constant price measure and the VCC as a 
current price measure. In the static case of the transformation 
problem one simply holds the OCC constant (because the TCC is 
unchanged) as we go through a logical rather than temporal 
sequence, first looking at the 'value' rate of profit (i.e. before profit 
rate equalisation) and second at the 'price' rate of profit (the 
equalised rate). Again, I simply can't stress too highly how 
important this is because it blows away the myth that Marx's 
procedure is flawed because he 'failed' to transform the inputs. 

> > But this is problematic
> > because both quantities and prices are changing.
> Agreed.
> > Accumulation typically
> > proceeds via labour-saving MP-using innovations which raise labour
> > productivity and s/v.

Could I just note that saying 'labour saving MP' is basically 
equivalent to saying 'rising TCC'. This illustrates that the notion of 
the TCC is neither meaningless nor collapsable to the OCC or 

> Well, I agree that it is a perspective which has some practical
> advantages re operationalizing Marxian categories. 

Above I have suggested that there are overwhelming theoretical 
'advantages' with the distinction. In short, it clears up the 
controversy over both the TP and the LTRPF. How much more 
useful can you get!?:)

> It may be that the
> perspective that you have advanced is an advance beyond what Marx
> wrote: i.e. an improvement to Marx's theory.  Yet, I'm not at all
> convinced that this was Marx's theory *and* I have reservations
> (described below) about its overall usefulness.
> We agree that, as presented by Marx,  the TCC is expressed in terms of
> use-value.   I would go further and claim that the distinction between
> the TCC and the VCC is a more concrete manifestation of the
> contradictory relation between use-value and value.  It is because the
> OCC, by my reading of Marx, encompasses both of these aspects of the
> value dialectic that I referred to it previously as a dialectical
> unity of the TCC and the VCC.
> Given the role that this thread -- i.e. the interplay between
> use-value and value -- plays in the whole of Marx's theory, I am very
> leery of abandoning Marx's conception of the TCC which I believe your
> perspective does since it re-casts what was a use-value relation as  a
> value relation.  With your reformulation we now have a way of
> measuring the TCC but we no longer have the opposition between
> use-value and value.

I agree with you that the TCC must be kept as a use value notion, 
as I have tried to explain above and in previous posts. Also I have 
(following my [7933]) accordingly modified my exposition of the 
OCC (in line with Alfredo's own exposition). I now say that the OCC 
is a 'value-reflex' or 'value assessment' of the TCC. This has a 
rather different connotation to the notion of an 'index' of the TCC, 
since it does not suggest that the TCC is an unambiguous pre-
given quantity.

I would also agree that there is a dialectical unity between value 
and use value, running through all of Marx's 'Capital', and that this 
is of course present in the TCC / VCC distinction, and indeed the 
latter distinction is a more concrete expresison of the basic use 
value / value distinction introduced in Vol 1. However, I am still not 
clear on how, on your account, the term 'OCC' is necessary to 
express this unity. Why not just say 'CC'? 

In any case, I am hoping to at least make intelligible my own 
interpretation of the CCs. My conception of the OCC does not fall 
foul of the key problems you have identified above and does make 
a massive difference to grasping Marx's key theoeretical arguments 
re the TP and the LTRPF. 

> It is of course true that the TCC -- and use-value in general -- can
> not as Marx defined it be objectively, independently, unambiguously,
> and unprobmatically measured.   I think that Marx thought an increase
> in the TCC was self-evident, i.e.  it  was viewed as an indisputable
> historical tendency.   Indeed, from the standpoint of the mid 19th
> Century the growth in the mass of machinery to workers employed could
> be viewed as being as self-evident as the fact that wealth in
> capitalist social formations appears as an "immense collection of
> commodities".

Yes I absolutely agree with you here.

> Marx also believed that use-value could not be measured  -- yet does
> that mean that we should conclude that since it can't be  accurately
> measured it  must be modified so that it becomes value rather than
> opposition to value?  I think not.

Again, I agree.

> What I will have to think through more are the *implications* of your
> redefinition of the TCC and the OCC for the rest of Marx's theory,
> especially for interpreting Part Three of Volume 3 of _Capital_.

Yes. It seems to me that the implications are momentus for not 
only part 3 but also part 2 (and indeed the interpretation of 'Capital' 

Many thanks,


> The above also constitutes a reply to today's posts by Andy.
> In solidarity, Jerry

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