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

From: Diego Guerrero (diego.guerrero@CPS.UCM.ES)
Date: Tue Feb 27 2007 - 17:01:35 EST

Hi, Rakesh,

If you think of costs as the product of a mass of means of production and
means of consumption by a set of prices, your formula for the rate of profit
allows capital to grow due to two factors: the expending of new labour and
the inflation of prices. You would thus have profits from the simple passing
of time, but this expansion would be just "nominal".

I think that in order to explain the expansion of capital, we should show
that the rate of profit (M' - M)/M is positive not due to the passing of
time between M and M' (in the scheme M-C.P.C'-M') but due to ".P.", i.e. due
to the expending of new labour. For this it suffices to look at a single
day: as the social production process is continuous in time, you have at the
aggregate level (not necessarily at the individual level) a positive (M' -
M) everyday, unless something extraordinary happens.

I think that one difference between Alejandro Ramos and I is that he tends
to think in terms of the individual capitalist instead of in aggregate or
social terms. When Marx speaks of "the capitalist", "the commodity", etc.
(in singular) he is always referring to averages of the respective totals
and examples of a class. Of course, it makes sense to use historical costs
for the individual capitalist, but I think that it is not the case for the
entire capital. If you think of a single capitalist it is possible that the
price of his inputs does not evolve like the price of his outputs, and this
can generate a lot of redistributions of profits between individual
capitalists, either in a sector or between sectors. But in the aggregate you
will have the same factor of increase due to the change in prices in both
the numerator and the denominator of the rate of profit.

And above all I think that value is the labour needed at present for
reproducing a commodity.



----- Original Message -----
From: "Rakesh Bhandari" <bhandari@BERKELEY.EDU>
Sent: Monday, February 26, 2007 5:42 PM
Subject: Re: [OPE-L] questions on the interpretation of labour values

>> Hi, Rakesh,
>> I would first look at the general case, where fixed capital is present.
>> In
>> it, constant capital is the value of the stock of capital. As all values,
>> it
>> comes from labour, in this case unpaid labour extracted to workers in the
>> process of production of the means of production. And as all values, it
>> is
>> measured by a certain quantity of money. [Note by the way that there is
>> no
>> stock of variable capital; I agree with Duménil in this point]
>> If we look at the flow of constant capital, I think it is necessary to
>> use
>> replacement costs, not historical costs.
> But. leaving aside the question of how and why money price mis-represents
> value, why should replacement rather than historical costs be in the
> denominator the profit rate?
> If we take C(r) to be replacement costs and C(h) to be historical costs,
> why shouldn't the profit rate be measured as
> C(r)plus value added/C(h)plus v?
> Wouldn't that be the way to measure the actual expansion of capital in
> time?
> I'm trying to understand your difference with Alejandro.
> Yours truly, Rakesh

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