# Re: [OPE-L] price of production/supply price/value

From: Ian Wright (wrighti@ACM.ORG)
Date: Sun Jan 29 2006 - 23:56:09 EST

```Hi Fred

> The past labor component of the total labor is derived from the given
> constant capital (which is equal to the price of production of the means
> of production), by dividing the given constant capital by the MELT (or, as
> Rakesh puts it, by multiplying the given constant capital by the value of
> money):
>
>         PL   =   C / MELT
>
> In general, the past labor derived in this way will not be equal to the
> labor-time required to produce the means of production, because the prices
> of production of the means of production are in general not equal to the
> simple prices of the means of production.
>
> The labor-time required to produce the means of production has already
> been objectively expressed by the price of production of the means of
> production (which is equal to the constant capital advanced to purchase
> the means of production, prior to production).  Even though this is not a
> perfect representation of the labor-time required to produce the means of
> production, this is how this labor-time has already been represented, and
> it is this already-existing imperfect representation of past labor that
> becomes the first component of the total labor contained in commodities.

OK, prior to transformation, labour value is not conserved in cost price.

> However, the situation is different with the other component of the total
> labor - the current labor.  The quantity of current labor is not derived
> from the given variable capital, because current labor produces new-value,
> which did not previously exist before current production.  And the
> quantity of new-value produced is determined by the product of the
> quantity of current labor and the MELT; i.e.
>
>         NV  =  (MELT) L
>
> And the new-value produced by current labor is in general greater than the
> given variable capital (which is of course the secret of surplus-value).

Doesn't Marx assume that the rate of surplus-value is a function of
the variable capital? E.g., 10 hours worked in a day, rate of
surplus-value is 10%, then surplus-value produced is 1 hour. Doesn't
Marx assume, in his transformation, that the size of the variable
capital directly represents the amount of actual labour put into
motion by a given capital?

>
> So the relation between labor-time and prices is different for the two
> components.  For the transferred value component, past labor-time is
> derived from price, because the price of the means of production already
> exists and this already existing price is taken as given and becomes the
> first component of the simple price of commodities.  On the other hand,
> for the new value component, price is determined by labor-time, because
> new-value did not previously exist, but is instead the result of the
> current period of production.  In this case, the quantity of current L is
> taken as given and determines (along with the MELT) the quantity of
> new-value produced.

OK. Cost price really is price, because it is advanced to production,
and represents past production. Value-added, in contrast, is not
determined by price, but by actual labour-time, because it is current
production. So, as far as I understand it, you differ from Marx in
ch.9, who doesn't make this distinction between (i) cost-price as
price and (ii) new value as a function of labour-time and MELT (happy
to be corrected). No quarrel if you differ from Marx, because his
transformation is incomplete, by his own admission.

> This point is discussed more fully in my "sympathetic critique of the new
> interpretation" paper which was attached to my last message.

Fred, I understand if due to time etc. you do not wish to fully
continue. I should read all your papers carefully. But any
clarifications or comments would be very welcome.

Best,

-Ian.
```

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