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

From: Pen-L Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Sat Mar 17 2007 - 22:13:48 EDT

Quoting ajit sinha <sinha_a99@YAHOO.COM>:

> Ajit:
> How much is your M, Fred? Just tell me how much is
> your M. If you are going to begin your theory with a
> given M, you need to know how much it is. I'm not
> asking for any explanation, just tell me how much it
> is. Where do you get your data for M? If you are
> unable to tell us how much is your M, then how could
> you claim that M increases to (M + dM)? Just think
> about it?

M is whatever it is in the real capitalist economy.  With unlimited
resources, one could estimate M.  But this is not necessary for the
theory.  M is an actual magnitude, which exists prior to the production
of the output, and which can be taken as given as such, whatever it is.
  M is divided into C and V.  The actual C, whatever it is, becomes one
component of the total price of commodities.  The actual V, whatever it
is, is subtracted from new-value to determine S.  The variables in the
theory represent these actual magnitudes, even though we don’t know
what these magnitudes are.

The theory concludes that S is proportional to surplus labor, even
though we don’t know what these actual magnitudes are.  From this
conclusion, one can explain other important phenomena of capitalist
economies, such as the conflict over the working day, the conflict over
the intensity of labor, inherent technological change, etc.

>> You may differentiate P of inputs from P
>> of outputs and claim that P of inputs are known. If
>> you are doing that, then clarify your position.
> Yes, I am definitely distinguishing between prices of
> inputs and prices
> of outputs.  There is not simultaneous determination
> in Marx’s
> theory,
> but rather sequential determination.  The prices of
> the inputs (total
> prices, not unit prices) are taken as given in the
> determination of the
> prices of the outputs (again total prices, not unit
> prices), and most
> importantly in the determination of the total
> surplus-value.
> ________________________
> Ajit:
> I'm sure I didn't go to the same school as you did.
> But I, for the life of me, can't understand what is
> this "total prices". What do you understand by the
> concept of price?

I am actually using “total price” in two different senses, and I should
be clearer about that.  I usually mean the total price of all the
commodities produced in the economy as a whole (roughly equal to
nominal GDP, minus non-business sectors, plus the cost of intermediate
goods).  But in the paragraph quoted above, I used “total price” to
mean GDP (plus …) for a single industry, in order to distinguish it
from the unit price of the commodity produced in that industry.  It
really should be called something like “industry revenue” or “industry
GDP”.  Prices of production in Marx’s theory are these “industry
revenues”; they are not unit prices.

> Ajit:
> If you don't have the data (in principle) then all
> this talk about "given" and "empirically existing" is
> pure non-sense.

I could have the data IN PRINCIPLE.  As stated above, the quantities of
money capital that I am talking about are actual quantities of money
capital advanced to purchase means of production and labor-power in the
real capitalist economy, which are in principle observable.  Therefore,
the data could in principle be collected.  But the theory does not
depend on the data being collected.  The theory is constructed in terms
of variables which represent the actual quantities in the real
capitalist economy, even though we don’t know what the actual
quantities are.

This is a perfectly acceptable logical method.

>> 3.  N is determined by the product of SNLT (L) and
>> the
>> MELT (m), both
>> of which are also taken as given:
>>        N  =  m L
>> ______________________
>> Ajit:
>> Who gave you m?
> m in Capital is determined by the value of gold, which
> is taken as
> given (it is equal to the inverse of the value of a
> unit of gold).
> Without commodity money, the determination of m is
> more problematic.  I
> have written about this issue, and also discussed it
> on OPEL, but I
> would like to set this issue aside for now, and keep
> the focus on the
> given C and V.
> _______________________
> Ajit:
> But who is talking about Capital, the book? I want to
> talk to you not Marx. You have introduced the little m
> not Marx, and all your variables become non-sense
> without the knowledge of the value of m. So it is
> legitimate for anybody to ask you, how do you get your
> m?

I myself am talking about Capital the book.  I am talking about my
interpretation of Marx’s theory in Capital.  Marx did not use the
algebraic symbol m, but he certainly did use the concept.  For example,
in Chapter 7 of Volume 1 (the most important chapter in the book), m is
assumed to be 0.5 shillings per hour (because it is assumed that it
takes two hours to produce a shilling of gold).  As determined by the
equation (N = m L), with a working day of 6 hours, the new value
produced is 3 shillings, and with a working day of 12 hours, the new
value produced is 6 shillings.

Attached is a working paper of mine in which I discuss the
determination of m in the case of non-commodity money.

> Ajit:
> Everything is *assumed to exist* even though they are
> not *observable* but still you put them as variables
> in quantitative equations add, subtract, multiply them
> with whatever you feel like and all this is supposed
> to be a theory, and that too Marx's theory?
> Cheers, ajit sinha

Yes, a quantity does not have to be observable to be a variable in a theory.

Comradely, Fred

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