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

From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Wed Mar 21 2007 - 10:03:03 EDT

```--- Pen-L Fred Moseley <fmoseley@MTHOLYOKE.EDU> wrote:

> >> > 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
> > Fred:
> >> 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.
> > ___________________________
> > Ajit:
> > You don't need any resource to answer my very
> simple
> > question. If a student of yours asks you how much
> is
> > the GDP of the USA in 2006, I would guess you
> don't
> > tell him/her that it would need billions of
> dollars of
> either
> > direct the student to National income data or tell
> the
> > student the principle of calculating the GDP.
Fred:
> But the government does spend billions of dollars to
> collect and
> process the data in order to estimate GDP!  The US
> Bureau of Economic
> Analysis has hundreds of employees.  That is why it
> available.  M is just as observable as GDP, but the
> resources of the
> government are used to estimate GDP, not M.
____________________
Ajit:
But you know how to calculate GDP in principle, don't
you? Why can't you tell how to estimate your M in
principle?
______________________
Ajit:
> > I gave
> > you one example and asked you just tell me how
> much is
> > your empirically given M in this example. You are
> > simply unable to tell me. Let us suppose you don't
> > like my example, then you construct your own
> example
> > and explain to me what you mean by "empirically
> given"
> > M with which your theory begins with. If you
> cannot do
> > even this much, then it is obvious that your
> theory is
> > stillborn.
Fred:
> As I already told you, M is whatever the capitalist
> invests to purchase
> means of production and labor-power.  M refers to
> actual magnitudes in
> the real capitalist economy, even though we don’t
> know what the actual
> magnitudes are (although we could in principle know
> these magnitudes,
> with enough resources).
______________________
Ajit:
No. To know the principle, you don't need any
resources. You simply don't know the principle, so you
keep repeating "M is whatever it is" as a mantra. But
I know the principle, which I gave you in the very
quantities of constant capital elements used in the
production process multiplied by their respective
prices. You cannot accept it, but then you do not have
any other principle to replace it.
________________________
Ajit:
> Now, if by "total price" you mean "total revenue"
> (even though you don't clarify whether you mean
gross
> or net), it should be clear to anybody the that
total
> gross revenue is nothing but quantity of goods sold
> multiplied by its price and the net revenue is
nothing
> but total gross revenue minus total quantity of
> constant capital used in the production process
> multiplied by their prices plus the depreciation of
> fixed capital plus the total wage bill. This is the
> only way a firm or an industy satistics of total
> revenue is arrived at. It makes no sense to say it
is
> given.
______________
Fred:
This is really the crucial point.

It is true that C is by definition (as an identity) =
(UPmp) (Qmp),
where UP stands for unit price, and mp stands for
means of production.
But this does not mean that C is determined by this
equation.

According to Marx’s theory, unit prices are determined
by the
quotient
of prices of production (“gross industry revenue”) and
the quantity
of
good produced:

UP  =  PP / Q
______________________
Ajit:
If this is crucial, then you should know that you have
been making a crucial mistake all along. How does a
firm gets its revenue? By selling the goods it has
produced. When it sells a good, it sells it at a
price. Only AFTER selling its goods it receives a sum
of money that is its revenue. So revenue by definition
is quantity sold multiplied by its price. There is
only one way arrow of determination in the equation
PxQ = M. You cannot know M unless you know both P and
Q. In other words, if P is unknown, then M is unknown.
In your equation P = M/Q (assuming Q is known), you
have one equation in two unknowns, P and M, and so it
determines nothing.

But I have a feeling I'm wasting my time here because
knowledge of P and Q and it is whatever it is.' And
this time the M happens to be the revenue and not
capital. Cheers, ajit sinha

____________________________________________________________________________________
Expecting? Get great news right away with email Auto-Check.
Try the Yahoo! Mail Beta.