Re: [OPE-L] Capital in General

From: Jerry Levy (Gerald_A_Levy@MSN.COM)
Date: Wed Oct 19 2005 - 21:20:30 EDT

----- Original Message -----
From: "Jurriaan Bendien" <>
Sent: Wednesday, October 19, 2005 1:43 PM
Subject: [OPE-L] Capital in General

I'd agree with Fred Moseley insofar as Marx argues the value of
labour-products, as distinct from their price, exists both prior to and
after exchange. It would be impossible for example for living labor to
transfer value from fixed assets to the new output, if value did not exist
after exchange.

The two identities of total output value and total output prices, and total
profit and total surplus-value were only a theoretical construct (a model),
as both Marx and Engels explicitly say (though this is ignored by many
scholars); in reality, as Marx and Engels both explicitly note, there was
no such exact mathematical identity.

Marx seems to have thought that assuming those two identities was
justified,  because he believed that in reality their quantitative
divergences would not  be so great; price-value divergences would
not be so great in most cases.  The whole notion of a uniform rate of
profit (or general rate of profit)  refers to an *idealisation*, a result
towards which the competitive process  would *tend* to move, yet,
Marx's discussion of the competitive process is very fragmentary.

Marx's habit was to say, "first you must analyse the phenomenon in its
idealised, pure form, despite all sorts of empiria that seemingly
contradict it, because if you cannot do even that, you cannot explain
much at all."  Ultimately, he argues, the capitalistic competitive process
is about  maximising one's private share of the total surplus-value
produced, and that  is the correct basis for building a theory of how
that competition occurs.

However, with the expansion of foreign trade, the price-value divergences
mentioned will increase, and what is left undiscussed, is what Marx himself
terms "profit upon alienation" occurring outside the sphere of the
production and distribution of newly created surplus-value. A surplus value
or profit may also be obtained, through a redistribution of already
existing goods, but if Marx is correct, this represents not a net addition
to total surplus value, but a transfer of value, a redistribution of it. But
this value transfer is theoretically problematic, it deserves to be much
better theorized than it has been.

Also note that at any point in time, the bulk of labour-products are not
being traded at all - they have a value, but no actual market price, at
best an ideal one.

Personally, I think that Marx's theory does not concern an "accounting
theory of value and price", but a theory of a real social process, which we
can only imperfectly describe with social accounting procedures;
consequently, there exists no mathematical operation which can prove Marx's
theory correct, at best, it can make the discussion of what we are talking
about more exact, or elucidate logical implications, or empirically
(probabilistically) corroborate the theory. If Marx's theory has
explanatory power, it must be, because it makes sense of the facts of
observable  experience (this is a "Lakatosian" interpretation, with the
proviso that  Imre Lakatos leaves out the social determination of
scientific theories, as  I think Larry Laudan, Andrew Gamble and
Thomas Kuhn among others pointed  out).

In Marx's dialectical description of capital, there are actually many kinds
of "transformations" (Verwandlungen), not just one as his critics claim,
and they all refer to the practical resolution or mediation of a
contradiction existing as a practical reality, which is reflected in thought
as contradicting categories. These transformations include, just going
by the contents list of Das Kapital:

- the transformation of the general form of value into the money form
- the transformation of money into capital
- the transformation of the value of labour-power into wages
- the transformation of surplus value into profit
- the transformation of the rate of surplus value into the rate of profit
- the transformation of profit into average profit
- the transformation of commodity values into prices of production
- the transformation of commodity capital into commercial capital
- the tranformation of money-capital into finance capital
- the transformation of surplus profit into ground rent

These ten types of transformations, specified by Marx, described
"logically-historically" (to use Ronald Meek's term) the process whereby
capital, which historically originates in circulation (although many
Marxists dispute this still), gradually - i.e. across six centuries -
"engulfs" (to use Kozo Uno's term) the whole production process of society,
causing new economic relations to become established, which require *all*
the mercantile categories devised by the political economists to be
modified, relativised and revised. You could refer to this process as
marketisation or market expansion, but that is not quite accurate, because
the markets are specifically *capitalist* markets, i.e. markets based on
capitalist private property. I am sure that if Marx has lived longer and
written more, he would have found even more "transformations".


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