[OPE-L:125] Re: the "law of value" (was: Marx's goals)

Gilbert Skillman (gskillman@mail.wesleyan.edu)
Sun, 24 Sep 1995 10:11:57 -0700

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Paul writes, first quoting me:

> Gil
> ---
> But yes it can: the divergence of the value of the money commodity
> in the form of capital from its price, i.e. interest. Yes, to
> anticipate subsequent comment, something else must be presupposed
> (production of value), but this must be supposed in explaining
> surplus value whether or not one presumes price-value equivalence.
> Paul C
> ------
> Did you really mean what you said there, that interest is the price
> of the money commodity?
> Assuming that we have a money commodity - gold in Marx's time, it
> has a price set by the rate at which the mint will convert it into
> coin - two pounds seventeen shillings and six pence per ounce.
> Interest can not be consistently treated as a price of a
> commodity as it has dimension t^{-1} whereas a price has has a
> dimension of the form $/kg or pounds sterling / lb weight etc.

Yes, there is a problem here, but it does not originate with me.
First, I'm using money as a " commodity in the form of capital" in
Marx's sense from Volume III, Part 5. Here he is in Ch. 21, on
interest-bearing capital: "In this capacity of potential capital, as
a means to the production of profit, [money] becomes a commodity, but
a commodity of a special kind. Or what comes to the same thing,
capital becomes a commodity."

Later: "The form of lending results from capital's characteristic
here of emerging as a commodity, or in other words, it results from
the fact that money as capital becomes a commodity."

Having defined money acting as interest capital as a form of
commodity, he correspondingly refers to its recompense as a form of price:

"What then does the industrial capitalist pay [to the lending
capitalist], i.e., what is the price of the capital lent out?"

He goes on to characterize this form of price as an *irrational* one:

"If interest is spoken of as the price of money capital, this is an
irrational form of price, in complete contradiction with the concept
of the price of a commodity. [Exactly--see below. GS] Here, price is
reduced to its purely abstract form, completely lacking in content,
as simply a particular sum of money that is paid for something which
somehow or other figures as a use-value..."

In referring to interest as an "irrational" price, Marx recalls his
notion of "imaginary" price, first invoked in Chapter 3 of Volume I
to represent a price which does not correspond to underlying embodied
labor. This has been exactly my point: interest, and by extension all
surplus value, *essentially* represents a situation in which prices
diverge from values. How then is interest determined, if not by
underlying labor value? Marx goes on:

"[Price determination] is different, though, with interest on money
capital. Here competition does not determine divergences from the
law, for there *is* no law of distribution, other than that dictated
by competition; as we shall see, there is no 'natural' rate of
interest. What is called the natural rate of interest simply means
the rate established by free competition."

Again, that has been my point, to which I've added the following
conditions corroborated by other portions of Marx's work:
the existence of positive interest is equivalent to conditions of competition
given differentially owned and relatively scarce productive ["capital"]

So: I mean "money as a commodity" in Marx's sense in Ch. 21, and I
mean interest as the "price" of this commodity form of money in the
same sense. Perhaps I could have worded it better; if so I request
help from Paul and others; Paul in particular has in the past forced
me to sharpen my arguments with respect to value theory to good effect.

Gil Skillman