[OPE-L:861] Re: John's questions in OPE 855

Gilbert Skillman (gskillman@mail.wesleyan.edu)
Sun, 28 Jan 1996 11:33:36 -0800

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Alan writes:

> Marx's discussion in Volume I, chapter 5 (Contradictions in the
> General Formula) is in my view this core. He discusses
> circulation between three individuals A, B and C who exchange
> at prices different from values (yes folks, and it's all in
> Volume I).
> He writes:
> "A may be clever enough to get the advantage of B and C without
> their being able to take ther revenge. A sells wine worth 40
> to B, and obtains from him in exchange corn to the value of
> 50. A has converted his 40 into 50, has made more money out
> of less, and has transformed his commodities into capital. Let
> us examine this a little more closely. Before the exchange we
> had 40 of wine in the hands of A, and 50 worth of corn in
> those of B, a total value of 90. After the exchange we still
> have the same total value of 90. The value in circulation has
> not increased by one iota; all that has changed is its
> distribution between A and B. What appears on one side as a
> loss of value appears on the other side as surplus-value; what
> appears on one side as a minus appears on the other side as a
> plus. The same change would have taken place if A, without the
> disguise provided by the exchange, had directly stolen the 10
> from B.
> "The sum of the values in circulation can clearly not be
> ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
> augmented by any change in their distribution any more than a
> ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
> Jew can increase the quantity of precious metals in a country
> ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
> by selling a farthing from the time of Queen Anne for a guinea.
> ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
> The capitalist class of a given country, taken as a whole,
> ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
> cannot defraud itself"
> ^^^^^^^^^^^^^^^^^^^^^^

One should note several things this passage either does not say or
says invalidly:

1) The last sentence is a _non sequitur_. The issue addressed in
the preceding sentences concerns whether a capitalist class might be
able to defraud *some other* class, which of course it can if it
charges a price above value for the money commodity (cf. Alan's
affirmation that money is included in the set of commodities). Thus,
if Marx has ruled out surplus value via redistribution of value in
Chapter 5, it is *only* because he does so *by definition*, which he
does at the beginning of the chapter ("...we must rather look to see
whether this simple circulation, by its nature, might permit the
valorization of the values entering into it...", p. 259 Penguin

2) In anticipation, I note that the passage does not suggest--nor
could it validly suggest in general--that the sum of values is equal
to the sum of commodity prices.

3) To say that value cannot be augmented in exchange is virtually a
tautology, since Marx defines value in terms of SNLT expended in
production, and exchange isn't production. But Marx seems to have
more in mind for Ch. 5 than simply the presentation of a tautology.

To the extent the argument in Ch. 5 is more than simply the
elaboration of this tautology, it is invalid. In particular, the
claim that surplus value must be explained on the basis of
price-value equivalence does not follow from Marx's premises, which
are that surplus value, defined as self-valorizing value, cannot be
explained on the basis of price-value equivalence or non-equivalence
in exchange, *taken alone.*

This in no way rules out the possibility, perhaps the necessity, that
surplus value (generated, by definition, in production) is *realized*
via price-value disparities. Indeed, Marx explicitly affirms the
latter case repeatedly, particularly in the Economic Manuscript of
1861-1863 (Marx-Engels Collected Works, Vol. 34).

> It is for this reason, Marx argues, that surplus value cannot
> arise from exchange and must arise from production. This is
> what Paul and myself term the conservation of value in
> exchange. But it is in fact just Marx's 'first equality', which
> as the above citation shows, is a principle of Volume I and his
> whole concept of exchange, not some obscure 'normalisation
> condition'. It keeps popping up at intervals throughout his
> work, right up to the Marginal Notes on Wagner.
> Put another way, it says that production - the labour process -
> is the *only* source of value. Value *cannot* arise from
> exchange. In a certain sense, the rigorous formalisation of
> Marx reduces to a systematic exploration of this single axiom.

Value *cannot* arise from exchange by definition; see above.

> This means that in exchange, value can be neither created nor
> destroyed but merely redistributed between different owners.
> So, whatever the 486 owners lose through moral depreciation has
> to go *somewhere*. This is a consequence of the conservation of
> value in exchange.

This does not follow. The fact that the mere process of exchange
does not affect the sum of ex ante values does not imply that some
change in technology or tastes might not destroy values.

> Now, if the price of a 'computer' differs from its value, value
> will be transferred between sectors and hence between different
> types of commodity. So if the total price of the stock of all
> computers rises by 10% to L110bn (say) even though their total
> value is L100bn, then some other commodities somewhere else
> must fall in price by L10bn.

This does not follow. See point (2) above.

I'll address the question of the connection between values and
"reproduction cost" later; I'd be interested in Alan's comments on
the above.

Gil Skillman