Re: [OPE-L] valorisation, realisation, and the two equalities

From: paul bullock (paulbullock@EBMS-LTD.CO.UK)
Date: Sun Sep 30 2007 - 18:43:51 EDT

  I don't conflate production and circulation of commodities. What I said was that the 'valorisation' process.. ie the 'self expansion of capital' is incomplete without both stages taking place. One cannot equate 'valorisation' with production alone, which is what you asserted in your previous post.  The process, as you quote Marx below, has two parts. One process. Two parts. Valorisation is the total process... if no extra money, no M1, no accumulation of the initial money form of capital, ie no valorisation. 

  I really dislike the term 'valorisation' ... if you look at what it is supposed to translate from.. then i hope you will see what i mean.

  Paul B.

  ----- Original Message ----- 
  From: Jurriaan Bendien 
  Sent: Sunday, September 30, 2007 8:33 PM
  Subject: [OPE-L] valorisation, realisation, and the two equalities

  I think Paul Bullock's interpretation of Marx's concept of valorisation conflates the production and circulation of commodities (Volume 1, in which Marx defines the valorisation process, with Volume 2). However, precisely when Marx discusses the falling rate of profit in Volume 3, he makes it clear that the conditions of the valorisation and realisation of capital should be sharply distinguished, and not be regarded as identical. And he does this precisely because, Marx argues, a crucial contradiction is involved between them (at least if you do not believe Say's law). Thus, Marx says:

  "As soon as all the surplus-labour that could be pressed out has been reified (vergegenstšndlicht) in commodities, surplus-value has been produced. But this production of surplus-value is only the first act of the capitalist process of production, ending the immediate production process. Capital has absorbed so and so much unpaid labour. With the development of the process, which expresses itself in a drop in the rate of profit, the mass of surplus-value thus produced swells to an unheard extent. Now comes the second act of the process. The entire mass of commodities, i.e. , the total product, both the portion which replaces the constant and variable capital, and that representing surplus-value, must be sold. If this is not done, or done only in part, or only at prices below the prices of production, the labourer has been indeed exploited, but his exploitation is not realised as such for the capitalist, and this can be bound up with a total or partial failure to realise the surplus-value pressed out of him, indeed even with the partial or total loss of the capital. The conditions of direct exploitation, and those of realising it, are not identical. They diverge not only in place and time, but also conceptually." (I have modified the translation, the German original is here:

  Why is all this so important, disregarding for the moment the dynamics of the operation of the law of value in a capitalist context, which the Marxists failed to explicate? Marx goes on to describe the contradiction between the valorisation of capital and the growth of physical output offered for sale, as follows:

  The contradiction, to put it in a very general way, is that the capitalist mode of production involves a tendency towards absolute development of the productive forces, regardless of the value and surplus-value included, and regardless of the social conditions under which capitalist production takes place; while, on the other hand, its aim is to preserve the value of the existing capital and promote its valorisation to the highest extent (i.e., to promote a continuously faster growth of this value). The specific feature about it is that it uses the existing value of capital as a means for the greatest possible valorisation of this value. (translation modified using

  I think this means that the potential for economic crises inheres precisely in the disjunction (dissynchrony) between maximising the valorisation of capital ("productivity growth"), and the uneven development of the growth of physical outputs that can and must be sold, in order to realise the capital value involved, i.e. the attempt is made to valorise capital in the production process to the utmost, even regardless of the possibilities for realising the newly created capital value through exchange. That is to say, the possibility of crises is ultimately rooted in the contradiction of exchange-value and use-value, and the mediation of this contradiction by money, i.e. ultimately crises occur when insufficient money is available to realise the capital value of commodities. The credit system can bridge the gap, but it can do so only by extending the contradiction even further; obviously you cannot extend credit to propertyless people who have no means to pay it back, and cannot be forced or disciplined in order to pay it back. This can explain Bill Clinton's emphasis on "giving" as the hope of the middle classes: capitalists should stop thinking like capitalists, because otherwise capitalism cannot develop much further globally in the long run. Unilateral grants and subsidies are necessary, for capitalist relations to flourish. Capitalists must be more intelligently generous, to save the system.

  If you believe Say's law, then the "two equalities" (total prices=total values and total profits=total surplus value) must hold exactly. If you don't believe Say's law, there is no necessity for the two equalities to hold. But if Say's law does not hold, the valorisation and realisation of capital are not identical processes. If you nevertheless argue they are identical processes, you cannot explain why commodities remain unsold, or why overaccumulation and overproduction can occur, in a way consistent with Marx's theory.


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