[OPE-L:7989] Re: relation of VCC to OCC

From: Andrew Brown (Andrew@lubs.leeds.ac.uk)
Date: Tue Nov 12 2002 - 06:08:09 EST

re 7975:

Hi Fred and all,
> I agree mostly with Rakesh.  The OCC is the VCC in a restricted sense
> - in the sense that the VCC is affected only by technological change. 
> The VCC is also affected by other factors besides  technological
> change, like wages, the distribution of labor and capital across
> industries, the turnover time of capital, etc.  But the OCC abstracts
> from all these other factors and serves to focus the analysis solely
> on the effects of technological change on the VCC, and ultimately on
> the rate of profit.  The OCC is like a general ceteris paribus
> assumption: holding all other factors constant, how does technological
> change affect the VCC?  The OCC is not a constant price (i.e.
> physical) ratio, but rather a ratio in current prices, the VCC, in the
> restricted sense just described.

Rakesh is correct to note that Marx's key examples involve 
abstraction from the differences in unit *value* of the raw materials 
in a production process. These examples do not, therefore, fit 
easily with your interpretation, as far as I can see. Marx gives the 
example of two production processes involving the same proportion 
between labour-power and means of production (the same TCC) 
and so having the same OCC even though one processes iron and 
the other copper, where iron and copper have different values, giving 
a different VCC (CIII, p.244; note in this case the TCC itself can 
reasonably be compared, and shown to be equal, across different 
locations). Yet if (in the dynamic case) we use current prices then 
differences (changes) in unit values are *not* abstracted from. That 
is, your 'OCC' could change even though the TCC doesn't and this 
change would be solely due to the change in value of the 
components of the TCC, seemingly contradicting Marx's example 
discussed above. 

More generally, there seems to be no way in which the OCC in 
your view 'mirrors' the changes in the TCC. If one uses current 
prices then it is quite possible for the TCC to go up and the OCC to 
go down, or remain the same. Therefore, your view seems to 
diverge from Marx's own statements that the OCC 'mirrors' the TCC.

It is important to distinguish between measurement and concept 
here. The *concept* of the OCC is, on my view, the 'value reflex' of 
the TCC. The *measure* is that of constant prices (old values), a 
measure which only exists in the dynamic case. This is indeed a 
view whereby one 'abstracts' from the certain changes in the VCC. 
Or to be precise, one abstracts from changes in the VCC which are 
due to changes in unit values. Through this abstraction, the OCC 
must 'mirror' changes in the TCC. As you note in your discussion 
of Fine and Harris, this is abstracting from 'indirect effects' (in Fand 
H's terms).

> "There is a close correlation between the two [the technical
> composition and the value composition; FM].  I call the value
> composition of capital, in so far as it is determined by its technical
> composition and mirrors the changes in the latter, the organic
> composition of capital." (C.I. 762)
> [Notice that the OCC *IS* the VCC, in so far as it is determined by
> changes in the TCC, i.e. by technological change.]

But notice also that it 'mirrors' changes in the TCC, something 
which seems to be absent from your view.

Re Fine and Harris. Fine has since changed his definition of the 
TCC: the denominator is now labour-power, valued at constant 
prices ('old values'), not a quantity of wage goods. Rises in the TCC 
cause rises in the OCC which entail a tendential fall in the rate of 
profit (and rise in the real wage) to which countertendencies, 
analysed at the level of the VCC, exist.

Michael Perleman has questioned the political significance of all 
this. Let me stress, once more, that the distinction I favour has a 
decisive impact upon interpreting the transformation problem and 
the LTRPF, hence on crisis theory. 

The definitions of the CCs that I favour are the result of a 
conception of capitalism as a whole, and especially of the 
concepts of value and surplus value, rather than simply a textual 
examination of Marx's relatively sparse direct statements regarding 
the OCC, VCC and TCC. No doubt the many different 
interpretations in the literature likewise reflect divergent general 
conceptions of capitalism (reflected, above all, in different concepts 
of value and surplus value).  A ch. of my PhD sets out my notion of 
value by way of critique of the various conceptions of value(-form) to 
be found in Hegel-inspired systematic dialectics. The OCC / VCC 
distinction builds on the view that value is created in *production* 
but realised (gains appearance form) in exchange, and that this 
development of 'form' is not incidental, nor smooth.

Many thanks,


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