Re: [OPE-L] Capital in General

From: Paul Bullock (paulbullock@EBMS-LTD.CO.UK)
Date: Sun Oct 23 2005 - 19:40:51 EDT

> Paul, thanks for your reply.  I am glad that we understand each other
> better now.
> It seems to be that the assumption of "no realization problem" or
> "circulation proceeds normally" is the same as assuming that S = D.
> What is the difference?


 what I had tried to say was that the terms 'demand' and 'supply' ,  as your well known quotes show, are 
taken by marx as  terms used, and from a  vocabulary used by, non scientific, misleading and apologetic, forms of explanation. Marx does not need to use them for his own purposes. The first quote you provide establishes this, he shows that the idea of S=D is entirely misleading.  Obviously Marx is always taking up the bourgeois ideas of the time ... but for us to confuse  'S=D'  with his theoretical assumption that there are no problems with realisation when he treats capital as whole, confuses empiricist terminology, which has a completely different class interest and method, with marx's scientific vocabulary. 

Above you ask  'What is the difference?'... from the Ch 10 you quote we can see that the difference is that  for Marx ( p288 )..' The section of society whose responsibility it is under the division of labour to spend its labour on the production of these particular articles must receive an equivalent in social labour represented in those articles that satisfy its needs.  There is no necessary connection, however, but simply a fortuitous one  etc etc...' 

This is the issue that Marx assumes not to present any problems  when eg he begins to deal eg with the reproduction schema. This assumption is not the same as S=D, of  Says use values and money exchanged for them. On p291 we find exactly this: '

' IF demand and supply cancel one another out, they cease to explain anything, have no effect on market value and leave us completely in the dark as to why this market value is expressed in precisely such a sum of money and no other.'

In this case why on earth would Marx 'say' that he assumed D=S ? He doesn't. He approaches the issue differently... and I think it behoves us not to say he was using the vocabulary and by extension the ideology of Say etc he was attacking.

I leave your quotes below.

Best regards


> Below are two passages from Chapter 10 of Volume 3, where Marx discusses
> supply and demand at length, in which Marx explicitly states that, in his
> theory of prices of production, he is assuming S = D, in order to analyze
> the laws of capitalism in their "pure form".   Marx distinguished in this
> chapter (and elsewhere) between prices of production which assume S = D
> and actual market prices which assume S not = D.
> "The real inner laws of capitalist production clearly cannot be explained
> in terms of the interaction of DEMAND AND SUPPLY ..., since these laws are
> realized in their pure form only when demand and supply cease to operate,
> i.e. when they COINCIDE.  In actual fact, demand and supply never
> coincide, or, if they do so, it is only by chance and not to be taken into
> account for scientific purposes; it should be considered as not having
> happened.  Why then does political economy assume that they do coincide?
> In order to treat the phenomena it deals with in their law-like form, the
> form that corresponds to their concept, i.e. to consider them
> independently of the appearance produced by the movement of demand and
> supply.  And, in addition, in order to discover the real tendency of their
> movement and define it to a certain extent."  (p. 291)
> "IF SUPPLY AND DEMAND COINCIDE, the market price of the commodity
> corresponds to its price of production, i.e. its price is then governed by
> the inner laws of capitalist production, independent of competition, since
> fluctuations in supply and demand explain nothing by divergences between
> market prices and prices of production - divergences which are mutually
> compensatory, so that over certain longer periods the average market
> prices are equal to the prices of production.  As soon as they coincide,
> these forces cease to have any effect, they cancel each other out, and the
> general law of price determination corresponds to price of production in
> its immediate existence and not only as an average of all price movements,
> and the price of production, for its part, is governed by the immanent
> laws of the mode of production."   (pp. 477-78)
> And below is one other passage from Chapter 10 where Marx stated that the
> exchange of commodities at their value (and by extension, at their price
> of production) is the "law of equilibrium between commodities".  What else
> could "equilibrium between commodities mean, other than equilibrium
> between S and D?
> "The exchange or sale of commodities at their value is the rational,
> natural law of equilibrium between them; this is the basis on which
> divergences have to be explained, not the converse; i.e. the law of
> equilibrium should not be derived from contemplating the divergences."
> (p. 289)
> Comradely,
> Fred

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