Re: [OPE-L] Truncating Marx

From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Sat Sep 15 2007 - 10:03:55 EDT

Hi David,

There is no “first transformation” of the inputs, as you describe it,
in my interpretation of Marx’s theory.

The analytical framework of Marx’s theory is the circulation of money capital:

	M – C … P … C’ – M’

The initial M is divided into C and V (a different C from the above of
course).  The magnitudes of C and V are taken as given in the
determination of the value and price of production of the output,
because these magnitudes already exist prior to the sale of the output.

The economy is assumed to be in long-run equilibrium, and its actual
long-run equilibrium with prices equal to prices of production, not a
hypothetical long-run equilibrium with prices equal to values.  This is
the heart of the “single system” interpretation of Marx’s theory.
Therefore, the initial C and V that are used to purchase means of
production and labor-power are equal to the prices of production of
these inputs, not equal to the values of these inputs.

C and V are NOT first assumed to be equal to the values of these
inputs, which then have to be “transformed” into the prices of
production of these inputs (your “first transformation”).  Rather, C
and V are taken as given from the very beginning of Marx’s theory (the
M in M-C), as equal to the prices of production in the inputs.

This is not clear in Vol. 1, because prices of production have not yet
been explained, but this becomes clear in Vol. 3, in which Marx
emphasizes repeatedly that “the cost price is the same” in the
determination of values and prices of production.

“Taken as given” means that the given C and V are the starting point of
Marx’s theory.  There is not a prior starting point – the physical
quantities of inputs and outputs, which are first used to determine the
values of inputs and are then used to determine prices of production of
inputs.  The starting point is M (= C + V) itself.  There is no “first
transformation” prior to this.

Comradely, Fred

Quoting David Laibman <dlaibman@SCIENCEANDSOCIETY.COM>:

> Fred,
> This latest statement does clarify your position for me. I still,
> however, see a central difficulty in your claim to have a third
> option.
> You are taking the position which I called the "retroactive"
> argument, in my *Science & Society* article (64:3, Fall 2000, p.
> 317). I cite Mage and Carchedi as proponents of this approach. To
> wit: Marx did not "fail" to transform the inputs; they are *already
> transformed* into prices of production, and so don't need to be
> transformed again. The problem with this is that it sees inputs and
> outputs as two separate classes of commodities. But to the extent
> that inputs (physical productive stocks: machines, raw materials) are
> also produced as commodities (with whatever turnover and depreciation
> periods; here I avoid that complicated thread), the industries in
> which they are produced will participate in the formation of the
> general rate of profit. Let me quote myself: "In the second
> transformation -- taking place as Marx described it with inputs
> 'already transformed' -- the general rate of profit that is formed
> will be different from any rate on the basis of which the *prior*
> transformation of inputs had taken place. The prices of inputs will
> have to change again, contrary to assumption." Note that Mage, Mino
> and Fred are proposing *two* transformations, while denying the third!
> There simply seems to be no way around this. We can't have one rate
> of profit shaping the "given" (and therefore unchanging) prices of
> production of the elements of constant capital, and another rate of
> profit forming subsequently. There can't be one r for inputs, and
> another for outputs. This is not about what Marx said, or did. It is
> not about what any of us has said at one time or another. It is
> simply an inherent property of the capitalist production/value system
> that we are all trying to understand, and explain. There is either
> untheorized continual change, which Fred (I think rightly) rejects;
> or there is an iterative *convergent* process. The third option is
> not an option: it implicitly sets up two separate capitalist
> economies, side by side, with no reasonable story about how they
> relate to one another.

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