Re: [OPE-L] Marx on the general rate of profit/rate of interest: a translation error

From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Fri Nov 02 2007 - 07:07:21 EDT

--- Paul Cockshott <wpc@DCS.GLA.AC.UK> wrote:

> Marx hints at a "conservation law", insofar as he
> argues e.g. that if a set of newly produced
> commodities are sold below their value, this must
> mean that another set of commodities is sold above
> their value, in the same proportion. But I am not
> really sure whether this should be interpreted as a
> theoretical assumption, or as an accurate
> description of empirical reality. I would think it
> is more a theorem which is almost impossible to
> prove empirically for the economy as a whole.
> Marx does not prove it, but he certainly believes it
> to be true.
> I think it should be provable for a barter economy,
> and thus for one involving gold money. Basically one
> knows that the amount of labour embodied in goods is
> fixed prior to the exchange process. Every exchange
> of two commodities must occur either at par, or with
> one selling for above its value and one below.
I have two questions about this idea of "conservation
of labor":

(1) We all know that labor is heterogenous. Marx
homonegizes it by multiplying them by wage
differentials. Thus unless you have a theory based on
the conservation principle itself which says that wage
differentials must reflect differentials in the
labor-energy expenditures, your measure of
labor-values have no "physical" standing.

(2) Let's suppose that labor is homogeneous. Even then
it is not clear what the labor-values of constant
capital measures and why it should be conserved?
Marx's argument of conservation of labor (assuming
homogeneous labor) works okay if we assume that total
capital is only variable capital. Marx seems to have
made this simplifying assumption (even though he
criticizes Ricardo for doing so) during his argument
about allocation of total labor (i.e. 'law of value').
But the argument no longer holds when constant capital
is introduced. Marx thought that he had solved the
problem with his rate of profit formula [S/(C+V)],
that's why he insisted that after transformation the
total values must be equal to total prices of
production (i.e., that the conservation principle
holds). But this rate of profit is itself dependent on
the assumption that the conservation principle holds.
So the argument seems to go in a circle. Cheers, ajit

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