RE: [OPE] devaluation and revaluation of variable capital

Date: Tue Feb 12 2008 - 10:13:54 EST

Hi Michael P:
OK. Let me try again.
Let's start with a teaser - which will be of special interest to Paul C
and Alejandro A because it concerns markets, efficiency, capitalism,
and socialism.  Marx concludes his discussion of the devaluation and 
revaluation of V by writing that:
"The moral of the tale, which can also be extracted from other 
discussions of agriculture, is that the capitalist system runs counter
to a rational agriculture, or that a rational agriculture is incompatible
with the capitalist system (even if the latter promotes technical 
development in agriculture) and needs other small farmers working 
for themselves or the control of the associated producers" (Penguin
ed., p. 216).
It's very clear that he is talking about issues beyond simply questions
of increasing relative surplus value.  Indeed, both at the beginning of the
section (Vol 3, Ch. 6, Section 2, Ibid, p. 205) and when discussing
the revaluation of V (Ibid, p. 213) he explicitly says that for a fuller 
grasp of this phenomena one must understand *competition* and the 
*credit system*  but "both still lie outside of the orbit of our
discussion" (i.e. belonging to the "possible continuation" - a separate
special study on competition).
Some of the issues he raises in this context include fluctuations in 
the price of raw materials and agricultural products which become 
"elements of variable capital"  caused by:
- "catastrophes in the reproduction process" (213);
- seasonal variations (ibid);
- "It is possible, therefore, and indeed unavoidable, when
capitalist production is fully developed, that the production and 
increase in the portion of constant capital that consists of fixed capital, 
machinery, etc. may run significantly ahead of the portion consisting
of organic raw materials, so that the demand for these raw materials
grows more rapidly than their supply, and their price therefore rises."
- the use of  "all kinds of surrogates"; "more economical use is made
of waste products" [NB: recycling!]
- "the monopoly of the original supplying countries"; changes in exports
- The colonial relation is discussed  (215-16). 
- changes in the _quality_ of raw materials can lead to changes "in 
European demand"  and "sudden jerks" in supply and prices.
There's quite a bit to discuss here, isn't there?
Furthermore, one could and should apply the concept of _moral
depreciation_  mentioned earlier in the section, to the issue of the
revaluation of elements of V.  For instance, how does technological
development in terms of new _product_ technologies for commodities
which become elements of V affect the valuation of existing assets?
In other words, how is the valuation of commodities which enter into
the costs of reproduction of labour-power  effected by these changes?
This not only concerns the valuation of new commodities but also the
valuation and _moral depreciation_ of the _existing_ stock of commodities
owned by wage-workers.
It would be tempting, furthermore, to look at how the _credit system_
can lead to a revaluation of the existing stock of "elements of V" as it 
relates to workers' housing prices and speculation.
In solidarity, Jerry
> My quick reading of this quote is that he is talking about an increase in relative > surplus value.> > > On Tue, Feb 12, 2008 at 01:26:59AM +0100, GERALD LEVY wrote:> > > > > I have done so only in the obvious way that increases in relative > surplus value devalue variable capital by diminishing the number of > hours required to "produce" an hour of labor power. Is that what you > mean?> > Hi Michael;> > The issue, as it is presented, in Volume III, concerns the impact> > *for capital* of the release and tying-up of V. Consider:> > "If wages fall, owing to a fall in the value of labour-power> > (although this may even be associated with a rise in the actual> > price of labour), a portion of the capital previously laid out as> > wages is set free. There is a release of variable capital. For> > capital that is newly invested, this has simply the effect of> > enabling it to function at an increased rate of surplus-value. > > The same quantity of labour is set in motion with less money> > than before, and in this way the unpaid portion of labour> > is increased at the cost of the paid portion. But for capital > > this was already invested earlier, not only does the rate of > > surplus-value increase, but on top of this a portion of the> > capital previously laid out on wages is set free. This was formerly> > tied up and formed a portion constantly deducted from the> > proceeds of production, a portion which was laid out on wages> > and had to function as variable capital if the business was to> > proceed on the old scale. This portion now becomes available> > and can be used for new capital investment, whether to extend> > the same business or to function in another sphere of > > production." (Penguin ed, p. 210). > > Who, though, has presented a formal model that allows for> > inter-temporal changes in the VLP caused by the release and> > tying-up of V? For that matter, who has empirically studied> > this question? For that matter, who has empirically studied > > tendencies and counter-tendencies re changes in the VLP? > > In solidarity, Jerry> > > >> I have mentioned this idea several times on the list, but Jerry> >> seems to be the only one who expressed any sympathy for it.> > Yes, we have been in broad agreement on issues related to the> > moral depreciation of *constant* capital. But, have you written> > here or elsewhere anything on "the release and tying-up of> > *variable* capital which is the result of the devaluation> > and revaluation of the elements of *variable* capital, i.e.> > the costs of reproduction of labour-power" (Vol 3, Penguin ed.,> > p. 212, emphasis added)?>

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