[OPE-L] Question

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Thu Apr 05 2007 - 19:33:56 EDT

Recently I had another look at the notion of ground rent (trying to correct
what I previously thought) and really Marx's more interesting discussion of
production prices occurs there (I am citing from the online edition).
Clearly the equalisation of the rate of profit giving rise to a "general
rate of profit" in Marx's view presupposes, if not perfect competition, at
least the free mobility of capital (and really also an equalisation of S/V).
The conundrum is that to find production-prices, a uniform rate of profit
must be assumed, while at the same time to find a uniform rate of profit,
production-prices must already be assumed, a sort of tautology. Moreover,
the uniform rate of profit assumes an equalisation process has already
occurred. This is intrinsically a static picture, which can at best
illustrate the differential realisation of surplus-values under the assumed
conditions. But the more interesting problem is the dynamic one, i.e. how
will the competitive process evolve over time, and how that plays out in a
world market setting. In Ernest Mandel's theory on this, which I think has
merit, the frontline of capital accumulation (its historical trajectory or
path) is really the quest for surplus profits (extra-Mehrwert) deriving from
resource or supply monopolies, or especially favourable production or
distribution conditions, but this would imply at least a relative blocking
of the equalisation process?!

It is really quite a complex argument. Marx writes e.g.:

If the composition of the capital in a given sphere of production is lower
than that of the average social capital, i.e., if its variable portion,
which is used for wages, is larger in its relation to the constant portion,
used for the material conditions of labour, than is the case in the average
social capital, then the value of its product must lie above the price of
production. In other words, because such capital employs more living labour,
it produces more surplus-value, and therefore more profit, assuming equal
exploitation of labour, than an equally large aliquot portion of the social
average capital. (...) The opposite is the case when the capital invested in
a certain sphere of production is of a bigger composition than the social
average capital. The value of commodities produced by it lies below their
price of production, which is generally the case with products of the most
developed industries. (...)

And then:

Prices of production arise from an equalisation of the values of
commodities. After replacing the respective capital-values used up in the
various spheres of production, this distributes the entire surplus-value,
not in proportion to the amount produced in the individual spheres of
production and thus incorporated in their commodities, but in proportion to
the magnitude of advanced capitals. Only in this manner do average profit
and price of production arise, whose characteristic element the former is.
It is the perpetual tendency of capitals to bring about through competition
this equalisation in the distribution of surplus-value produced by the total
capital, and to overcome all obstacles to this equalisation. Hence it is
their tendency to tolerate only such surplus-profits as arise, under all
circumstances, not from the difference between the values and prices of
production of commodities but rather from the difference between the general
price of production governing the market and the individual prices of
production differing from it; surplus-profits which obtain within a certain
sphere of production, therefore, and not between two different spheres, and
thus do not affect the general prices of production of the various spheres,
i.e., the general rate of profit, but rather presuppose the transformation
of values into prices of production and a general rate of profit. This
supposition rests, however, as previously discussed, upon the constantly
changing proportional distribution of the total social capital among the
various spheres of production, upon the perpetual inflow and outflow of
capitals, upon their transferability from one sphere to another, in short,
upon their free movement between the various spheres of production, which
represent so many available fields of investment for the independent
components of the total social capital. The premise in this case is that no
barrier, or just an accidental and temporary barrier, interferes with the
competition of capitals - for instance, in a sphere of production, in which
the commodity-values are higher than the prices of production, or where the
surplus-value produced exceeds the average profit - to reduce the value to
the price of production and thereby proportionally distribute the excess
surplus-value of this sphere of production among all spheres exploited by
capital. http://www.marxists.org/archive/marx/works/1894-c3/ch45.htm

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