Re: [OPE-L] questions on the interpretation of labour values

From: Diego Guerrero (diego.guerrero@CPS.UCM.ES)
Date: Thu Feb 22 2007 - 05:46:11 EST


Allin Cottrell wrote:

 <<Notice that in the next paragraph Marx continues,

"In the first place then we equate the constant capital to zero."

So the quotation could equally well be taken as saying we should
always value the non-labour inputs at zero, rather than always
valuing them at market prices, as you say.  But this clearly makes
no sense in the context of Marx's theory as a whole.>>





Diego:

Both your quotation and mine do make sense. Marx is simply carrying his
whole analysis in several steps:



1)      First he assumes c = 0

2)      Then, in the rest of Capital I and II, he assumes that (in our
terms) c = wA (w being direct prices, and A the input-output matrix)

3)      Thirdly, he assumes in Capital III that c = pA (p being production
prices)

4)      Finallay, and this lacked further developments because his work was
unfinished, c = mA (m being market prices).



I think that the basis for this understanding can be found in Marx himself.
Let me quote more extensively (my emphasis added):



1)      "The conversion of money into capital has to be explained on the
basis of the laws that regulate the exchange of commodities, in such a way
that the starting-point is the exchange of equivalents".

Note: it is "the starting point", not the full analysis. Moreover, in a note
he adds:

"If prices actually differ from values, we must, first of all, reduce the
former to the latter, in other words, treat the difference as accidental in
order that the phenomena may be observed in their purity (.) We know,
moreover, that this reduction is no mere scientific process. The continual
oscillations in prices, their rising and falling, compensate each other, and
reduce themselves to an average price, which is their hidden regulator (.)
How can we account for the origin of capital on the supposition that prices
are regulated by the average price, i. e., ultimately by the value of the
commodities? I say 'ultimately,' because average prices do not directly
coincide with the values of commodities, as Adam Smith, Ricardo, and others
believe."

Note that it is not only daily, volatile prices what does not coincide with
values, but average prices as well (i.e., my m).



2)      "For spinning the yarn, raw material is required; suppose in this
case 10 lbs. of cotton. We have no need at present to investigate the value
of this cotton, for our capitalist has, we will assume, bought it at its
full value, say of ten shillings. In this price the labour required for the
production of the cotton is already expressed in terms of the average labour
of society"



This means: let's assume by the moment that m = w.



3)      "The values of the means of production, i. e., the cotton and the
spindle, which values are expressed in the price of twelve shillings, are
therefore constituent parts of the value of the yarn, or, in other words, of
the value of the product."



Note that in case there is a deviation between the direct price and the
market price of the cotton and the spindle, it would be the "deviated" price
(i.e. m) what would be part of the VALUE of the product (not just of the
price).



4)      Marx wants always to distinguish direct labour from indirect labour
because for him it is essential to distinguish between abstract and concrete
labour. Only the former is active, the latter being a passive element in
production (of both use-values and values). Therefore he writes:



"Hence, the labourer preserves the values of the consumed means of
production, or transfers them as portions of its value to the product, not
by virtue of his additional labour, abstractedly considered, but by virtue
of the particular useful character of that labour, by virtue of its special
productive form."



"On the one hand, then, it is by virtue of its general character, as being
expenditure of human labour-power in the abstract, that spinning adds new
value to the values of the cotton and the spindle; and on the other hand, it
is by virtue of its special character, as being a concrete, useful process,
that the same labour of spinning both transfers the values of the means of
production to the product, and preserves them in the product. Hence at one
and the same time there is produced a two-fold result.



"By the simple addition of a certain quantity of labour, new value is added,
and by the quality of this added labour, the original values of the means of
production are preserved in the product. This two-fold effect, resulting
from the two-fold character of labour, may be traced in various phenomena."



This is why he takes the value/price of the means of production as
 "original" or "pre-existent", as a "premise", as "past" prices., but this
shouldn't be interpreted as in the TSS (I criticize the TSS in the same
paper: http://www.countdownnet.info/archivio/teoria/521.doc), i.e. not in a
temporal sense but in a logical or methodological sense (the necessity of
proceeding by steps).





As for the other point you mention,

<<But of course it is not difficult to satisfy all sorts of conditions
simultaneously if you grant yourself twice the degrees of freedom (e.g. by
treating input prices and output prices as independently variable
parameters).>>,



I don't know why you say this. I say that Marx does (and we should) take
market prices as data and want to explain them. This is why he develops a
theory of value, as the tool for capturing real prices.



Therefore, my m are a parameter indeed, but output prices are not a
parameter. All inputs are valuated at m prices. But there is not just a
single output price, but three: w, p, and m (see my Table in the answer to
Ian Wright in a previous email). All of them suppose given prices (m) of the
inputs, but its magnitude is different because w are defined as including
profit proportional to variable capital, p as including profits proportional
to total capital, and m profits that are different for each commodity or
branch.



Best wishes,

Diego

















----- Original Message -----
From: "Allin Cottrell" <cottrell@WFU.EDU>
To: <OPE-L@SUS.CSUCHICO.EDU>
Sent: Thursday, February 22, 2007 6:03 AM
Subject: Re: [OPE-L] questions on the interpretation of labour values


> On Wed, 21 Feb 2007, Diego Guerrero wrote:
>
>> In my opinion, values and market prices determine each other
>> mutually. Values are created by labour but the value of a
>> commodity includes the MARKET price of the inputs. As Rakesh
>> said in his last message, Marx has been misread also in this
>> point.
>
>> I argue that the inputs have to be valued at market prices (m),
>> not at values (w) or production prices (p)--I thus disagree with
>> Alejandro Ramos and Fred Moseley too.
>
>> One can find in Marx's texts a fondation for this. The reason is
>> that he is (and we should be) interested in the process of
>> creation of NEW values, and he says explicitly that for this we
>> can and must abstract from the values that come from other
>> places, like in the case of the chemist:
>>
>> <<The circumstance, however, that retorts and other vessels, are
>> necessary to a chemical process, does not compel the chemist to
>> notice them in the result of his analysis. If we look at the
>> means of production, in their relation to the creation of value,
>> and to the variation in the quantity of value, apart from
>> anything else, they appear simply as the material in which
>> labour-power, the value-creator, incorporates itself. Neither
>> the nature, nor the value of this material is of any importance.
>> The only requisite is that there be a sufficient supply to
>> absorb the labour expended in the process of production. That
>> supply once given, the material may rise or fall in value, or
>> even be, as land and the sea, without any value in itself; but
>> this will have no influence on the creation of value or on the
>> variation in the quantity of value.>>
>
> I don't think this quotation supports your interpretation.  At
> this point in Volume I Marx is focusing in on the creation of new
> value by living labour -- and he is putting off to a later point
> the analysis of the "full" value of the product, including value
> transferred from the means of production.  He's saying that
> insofar as the means of labour are considered simply as means by
> which living labour-time gets itself embodied in a product, their
> own value doesn't matter.
>
> Notice that in the next paragraph Marx continues,
>
> "In the first place then we equate the constant capital to zero."
>
> So the quotation could equally well be taken as saying we should
> always value the non-labour inputs at zero, rather than always
> valuing them at market prices, as you say.  But this clearly makes
> no sense in the context of Marx's theory as a whole.
>
>> I show in the paper that if we assume this, it is possible to
>> keep all Marx's equalities: total prices = total values, total
>> profitts = total surplus value, one single rate of profit and so
>> on.
>
> This is along the same lines as the TSS claims.  But of course it
> is not difficult to satisfy all sorts of conditions simultaneously
> if you grant yourself twice the degrees of freedom (e.g. by
> treating input prices and output prices as independently variable
> parameters).
>
> --
> Allin Cottrell
> Department of Economics
> Wake Forest University, NC


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