Re: [OPE-L] Capital in General

From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Sun Oct 23 2005 - 09:55:28 EDT

On Thu, 20 Oct 2005, Rakesh Bhandari wrote:

> > I do not mean to minimize the importance of capitalism's tendency toward
> > crises.  I have devoted a lot of years to Marx's crisis theory, especially
> > the falling rate of profit as applied to the US economy.  However, I have
> > come to realize that the three volumes of Capital are generally at a
> > higher level of abstraction than crises.  "Crises and the world market"
> > was the 6th book in Marx's original 6-book plan.  Capital was only the
> > first book.  Capital provides the basis for a more concrete theory of
> > crises, but such a theory is not presented in the three volumes.  Before
> > concrete crises can be analyzed, the production and distribution of
> > surplus-value must be explained.  These fundamental questions are
> > explained in Capital on the basis of the assumption that capitalism is
> > "functioning normally", i.e. that S = D and price = value or = price of
> > production.
> >
> > Comradely,
> > Fred
> I am quite worried about Fred's change of heart, seemingly away from
> Mattick's interpretation of Capital as primarily a theory of crisis
> and rupture (I know that Fred had said that if American capitalism
> does not enter a Great Depression by the early 2000s, he would
> consider Marx invalidated, but it seems that he is now simply
> redefining what Marx actually did set out to do in order to maintain
> allegiance to him). We have the critique of Say's Law at the
> beginning, then the misery of the working class,  disproportionality
> theory in the second volume (as Andrew T underlined), and FROP theory
> in the third volume. I can't see how this work can be pressed into
> the mould of an explanation of surplus value on the unrelaxed
> assumption that S always equals D.
> In fact, this idea that Marx never really got beyond S=D in his
> theoretical work only opens him to the charge that he was a prisoner
> of Say's Law. This is a concession to Keynes' lumping of him into his
> idiosyncratic definition of classical economics. As Bernice Shoul
> showed, Marx only makes provisional use of Say's Law in order to
> discover a deeper source of crises, the shortage of surplus value in
> the realm of production. Marx was however a thorough going critic of
> Say's Law and Keynes only "rediscovered" much of Marx's criticism.


Assuming that S = D for certain theoretical purposes is not the same as
"being a prisoner to Say's Law".  According to Say's Law, S must = D
ALWAYS AND OF NECESSITY in the real world.  According to Marx, "nothing
could be more foolish".  Marx assumed S = D in his theory, in order to
explain the production of surplus-value and the distribution of
surplus-value "in its pure form".  But Marx clearly recognized that in
the real world S is almost never = D, thereby rejecting Say's Law.

I remember Mattick emphasizing that there is a great distance between
Marx's abstract theory in Capital and concrete reality.  He himself closed
one of those big gaps with his extension of Marx's basic theory of
capitalism to the effects of government intervention on the rate of profit
(which is not considered at all in Captial).

And it was from Mattick that I learned the crucial aspect of Marx's method
that I have been emphasizing - the determination of the total
surplus-value prior to its distribution (and also from David Yaffe, who
was following Mattick on this point).  This principle was the basis for
Mattick's critique of Baran and Sweeay's Monopoly Capital - that
monopolies affect only the distribution of surplus-value, not the total
amount of surplus-value.

Rakesh, let me make a more modest claim, without trying to decide whether
or not "Capital is primarily a theory of crisis and rupture".  I argue
that, in Marx's theory of the production of surplus-value in Volume 1 and
in his theory of the distribution of surplus-value in Volume 3, Marx
assumed that the circulation of capital "proceeds normally".  In Volume 1,
this means price = value.  In Volume 3, it means price = price of
producton.  In both cases, it is assumed that S = D.

There are also the elements in Capital that you have emphasized, that have
to do with crises:  the critique of Say's Law, the likely
disproportionality in reproduction, etc.  But these are separate from
Marx's general theory of the production of surplus-value in Vol. 1 and
from his general theory of the distribution of surplus-value in Vol. 3
(including his theory of prices of production, with equal rates of
profit), in which Marx assumes capitalism "in its pure shape".

Rakesh, do you agree or disagree with this more modest claim?


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