Re: [OPE-L] Truncating Marx's "Capital"

From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Mon Sep 03 2007 - 21:51:14 EDT

Quoting Riccardo Bellofiore <riccardo.bellofiore@UNIBG.IT>:

> Dear Fred,
> very quickly, because work has begun again at full speed.

me too.  a few brief responses below.

> 2. about TSSI my position here is the same as David (Laibman). I quote:

Please see my response to David in a previous post.

> As I said, it is methodologically very similar to Mises' rejection of
> equilibrium theorizing.

Equilibrium theorizing is not the same as simultaneous determination
theorizing.  One can have equilibrium (in the sense of equal rates of
profit and long-run center-of-gravity prices) without simultaneous

> since for me the real problem in Marx is NOT the transformation, but
> the argument according to which value exhibits in money only labour.
> It is here that Marx's argument is problematic.

What do you think is wrong with Marx’s argument?

> 6. You write:
> "Previously existing quantity of money capital is taken as given in
> the determination of the value and prices of production of the output
> at the end of the circuit"
> This looks new to me, it seems that you now take that "existing" in a
> temporal meaning. Now, either we fall back in the discussion
> clarified by Laibman, or that money magnitudes have to do with
> elements of constant and variable capital sold at their prices of
> production, so why it is that relevant?

It is relevant because of what you quote me saying:  because these
money magnitudes are taken as given in the determination of the value
and prices of production of the output.  Other than that, I don’t
understand your question.

> That money magnitudes are simultaneously given with prices anyhow.

What to you mean by “simultaneously given”?  The two logical options
that we have been discussing are:  (1) simultaneous determination (from
given physical quantities), and (2) sequential determination (from
given money quantities, plus labor-time quantities and the MELT).  Do
you mean “simultaneously determined”?

> 7. I guess Ronchon is Rochon. May you give me the reference?

I will look up the references and send them to you as soon as I can.

> 8. Graziani does not bother very much with the transformation
> problem, and rightly so. The theory of the monetary circuit is a true
> macro-class-monetary approach, that interprets valorization at the
> level of analysis of Book I, with capital as a whole versus the
> working class. In that perspective, the determination of prices is
> subsequent, and not relevant to valorization. You can check reading
> the very, very short paper by Graziani in the IJPE 1997 I edited.

But even in a “true macro-class-monetary approach” (which I of course
like very much), the issue of simultaneous vs. sequential determination
is still present.  The question is:  are the prices of the inputs
determined simultaneously with the prices of the outputs (from given
physical quantities), or are the prices of the inputs assumed to exist
prior – both temporally and logically prior – to the prices of the
outputs, and taken as given as such (i.e. as these previously existing
magnitudes) in the determination of the prices of the outputs?

Graziani’s theory should explain how the aggregate M at the beginning
of the monetary circuit becomes M’ (i.e. M + dM), right?  So how are M
and M’ and dM determined in Graziani’s theory?  Is M determined
simultaneously with M’, or is M taken as given, as already existing (as
money already advanced), which then becomes one of the determining
factors in the determination of M’ and dM?

I argue that Marx’s logic is the latter - sequential determination.
Since M already exists and has already been advanced, prior to the sale
of the output, M is taken as given in the determination of M’, i.e. the
price of the output.

This does not mean that the M that is taken as given in the
determination of M’ is always the historical cost of the inputs.  If
the costs of the inputs remain constant over some period, then the
given M would be equal to the historical cost.  However, if the costs
of the inputs on the market change, then the given M for all similar
inputs that are still in process, up to the time of sale, would change
accordingly.  In this case, the M that is taken as given in the
determination of M’ is the CURRENT costs (i.e. the most recent costs)
of the inputs, not the historical costs of the inputs.

And yet this is still SEQUENTIAL determination.  The current M is taken
as given in the determination of M and dM.

I think the “previous existence” of M is crucial to Marx’s theory, and
the “general formula for capital” highlights this previous existence.
Marx’s theory is intended to explain how the previously existing M adds
to itself a new value (dM), that did not exist before.  The distinction
between “old value” (previously existing) and “new value” (added by
current labor) is the most important distinction in Marx’s theory.  One
could also say the distinbtion between “dead labor” and “living labor”,
which is of course the basis for the vampire metaphor.

Marx put the main subject of his theory in the following very clear and
succinct terms:

“Before production, we had a capital of &#8356;500.  After production
is over, we have a capital of &#8356;500 plus a value increment of
&#8356;100.”  (C.II. 124)

I argue that Marx took the &#8356;500 as given, and used that
&#8356;500 (along with the quantity of living labor and the MELT) to
explain how the old value of &#8356;500 adds to itself a new value of
&#8356;100 - and the explanation is of course that part of the old
value &#8356;500 is used to purchase labor-power, which in production
produces more new value than the previously existing old value with
which it is purchased.

I will look up his IJPE article.


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