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

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sat Apr 07 2007 - 12:13:07 EDT

>Quoting Rakesh Bhandari <bhandari@BERKELEY.EDU>:
>>2. Given Marx's emphasis on regular changes in prices of production, he
>>would not have thought that the prices of production which governed the
>>prices of the inputs could have been the same as the prices of production
>>which he derives for the outputs. So even if one thinks Marx left the
>>inputs in the form of values or simple prices, there is no evidence that
>>he was calling for a vector of equilibrium prices in the specific sense of
>>same prices for the inputs and outputs. Indeed the chapter as a whole
>>indicates that Marx would have rejected the equilibrium idea that prices
>>of production do not change interperiodically. To judge Marx on the
>>neoclassical equilibrium terrain is to impose foreign standards on him,
>>not to judge him on his own terms. Marx cannot be said to have called for
>>the neoclassical equilibrium test which he then fails. But that is how it
>>is presented in almost every account of Marxian economics. Take Heinz
>>Kurz's entry on value in The Radical Political Economy entry, ed. by
>>Malcolm Saywer as just one of countless examples. Some radical political
>>economy! Though that point of view is vociferously defended on this list;
>>unfortunately I have been disallowed with the AC's approval from replying
>Hi Rakesh,
>Which passages in particular in Chapter 9 do you think indicate that
>Marx was assuming continuous changes in values in each industry, period
>after period?
>It seems to me that in these few pages at the end of Chapter 9 Marx is
>making the theoretical point that, even though prices of production are
>not proportional to values, prices of production are nonetheless
>ultimately determined by values, and that changes in prices of
>production are ultimately caused by changes in values, either in the
>given industry or in industries that produce means of production for
>this industry.  I donít see any suggestion that he is assuming that
>such changes of values happen continuously, period after period, in
>each industry.

Right but Marx emphasizes here that prices of 
production do not always change in the long term.

But let me take the undisputed point first. The 
fact that the average rate of profit only changes 
in the long term actively misleads capitalists as 
to what the consequences of  productivity growth 
are in those branches undergoing at any time the 
most explosive growth. In other words, the type 
of thought typical of active capitalists does not 
allow them to penetrate beyond the appearances to 
the essences of modern society, for a grasp of 
the whole is the condition of knowledge, and this 
is simply incompatible with rationality in the 
form of rationalization concerned only with the 
maximization of profits (I draw here from 
Rockmore's summary of Lukacs).

So here is a crucial paragraph from this ninth 
chapter in terms of Marx's holistic epistemology, 
i.e. the idea that a grasp of the whole is the 
condition of knowledge and that capitalists are 
constitutively incapable of such grasp though the 
kind of rationality  we have is shaped by their 
narrow interests:

The theoretical conception concerning the first 
transformation of surplus-value into profit, that 
every part of a capital yields a uniform profit, 
expresses a practical fact. Whatever the 
composition of an industrial capital, whether it 
sets in motion one quarter of congealed labour 
and three-quarters of living labour, or 
three-quarters of congealed labour and 
one-quarter of living labour, whether in one case 
it absorbs three times as much surplus-labour, or 
produces three times as much surplus-value than 
in another - in either case it yields the same 
profit, given the same degree of labour 
exploitation and leaving aside individual 
differences, which, incidentally, disappear 
because we are dealing in both cases with the 
average composition of the entire sphere of 
production. The individual capitalist (or all the 
capitalists in each individual sphere of 
production), whose outlook is limited, rightly 
believes that his profit is not derived solely 
from the labour employed by him, or in his line 
of production. This is quite true, as far as his 
average profit is concerned. To what extent this 
profit is due to the aggregate exploitation of 
labour on the part of the total social capital, 
i. e., by all his capitalist colleagues - this 
interrelation is a complete mystery to the 
individual capitalist; all the more so, since no 
bourgeois theorists, the political economists, 
have so far revealed it. A saving of labour - not 
only labour necessary to produce a certain 
product, but also the number of employed 
labourers - and the employment of more congealed 
labour (constant capital), appear to be very 
sound operations from the economic standpoint and 
do not seem to exert the least influence on the 
general rate of profit and the average profit. 
How could living labour be the sole source of 
profit, in view of the fact that a reduction in 
the quantity of labour required for production 
appears not to exert any influence on profit? 
Moreover, it even seems in certain circumstances 
to be the nearest source of an increase of 
profits, at least for the individual capitalist.

  The philosophical significance of this chapter 
is rather breath-taking once one understands 
Marx's views of  holistic epistemology (and the 
implicit critique of the capitalist perversion of 
rationality) and  real contradiction (the 
contradiction between the law of value and the 
equalization of the profit rate as a real 
contradiction of generalized commodity capitalist 
production, a real contradiction between social 
production and private profit resulting in the 
mediation of the price of production which raises 
the class struggle to a social level).

Most of the readings we have of the 
transformation problem are quite flat footed as 
if the problem were well understood as as a 
problem of algebra.

Now to where we disagree.

In terms less than required for depressions in 
the average rate of profit to register,  we 
should assume that the change in pop was 
occasioned not by a change in the general rate of 
profit but by a change in the value of the 
commodity itself, and since the value of the 
commodity can change in consequence of technical 
changes within its own sphere as well as in 
consequence of a change in the value of those 
commodities which form the elements of its 
constant capital,  unit values will likely tend 
to change before, say, the means of production 
have been amortized or scrapped. That is, for the 
prices of production to change, there need not be 
ceaseless productivity growth in its own branch 
but only in one of the branches producing its 
means of production. This makes it likely that 
reductions in unit value are quite frequent.

Moreover, when, how often and as a result of what 
do you think prices of production change?

Importantly, RIcardo himself thought that unit 
values were changing very regularly as I have 
shown and Ricardo of course had not yet 
assimilated the consequences of large scale 


ps sorry not to have replied to Dogan's question 
about my own query about Althusser's critique of 
Hegel. I of course had the essays in For Marx in 
mind, but there are other important essays as 
well. And it will take me time.

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