[OPE-L:930] Chapter 5

Alan Freeman (100042.617@compuserve.com)
Fri, 2 Feb 1996 12:47:34 -0800

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0Re: OPE 877 and 879: Chapter 5

Hi Gil

(this is an exploration of 'Point 2' in 'Agreements and
Disputes' which deals with Gil's critique of Chapter 5 of
Volume I)

This post concerns the reading of Chapter 5, which though you
have clarified your interpretation, I still don't agree with -
again, no surprise.

In the first variant (OPE 877) there seems to me to be a missing
Boolean Variable. I wonder if you accept that this is the case
and I also wonder if this is the reason you issued a revised
version (OPE 879)

The missing Boolean Variable is:

SC= "whether this simple circulation, by its nature, might
permit the valorization of the values entering it and
consequently the formation of surplus value"

Thus your (OPE 877) ought to read (accepting your reading of
the other variables for now):

not ((SC & A) implies C)
not ((SC & not-A) implies C)


not (SC implies C)

which seems to be indeed the conclusion that Marx reaches on
p268, namely

"Capital therefore cannot arise from circulation"

if you omit SC from this you do get the result that

'it is not true that everything implies exploitation'

I agree this result is not very edifying. But this is because
removing the extra variable has removed the argument. It
appears as if the chapter is an argument about whether exchange
at values, or exchange at prices, is the cause of exploitation.
But once the variable SC is introduced, it can be seen that the
chapter is an argument about whether simple circulation is the
cause of exploitation.

The argument you provide makes me think you have misunderstood
the function of Chapter 5, and this makes me wonder whether
John Roemer has similarly misunderstood it; not having seen the
contribution you refer to, I can't tell.

The starting point of Chapter 5 is the assertion that you miss
out. Marx wants to establish whether exploitation can be
explained on the basis of simple commodity circulation, C-M-C.
Moreover, its purpose is not to explain the origin of surplus
value. It is to show that surplus value cannot arise from
simple commodity circulation, C-M-C. Which is why it doesn't
explain the origin of surplus value: This is done in the next
chapter, chapter 6.

However, there is more than this to it. Your category A or
'price-value equivalence' never figures as such in Marx's
argument in chapter 5. It always appears as a specialisation, a
subcategory, of something else. Marx draws no general
conclusions from his argument, outside of that specialisation.

To see why this leads to error, imagine that I put forward the

1) 'When I am under an umbrella, I do not get wet when it

2) 'When I am under an umbrella, I do not get wet when it does
not rain'

3) 'Therefore, when I am under an umbrella, I do not get wet'

This says nothing about the effect of rain when I am not under
an umbrella. Your 'critique' of this argument would run:

Let A be the statement 'it rains'

Let C be the statement 'I get wet'

Then statement 1 says: A does not imply C

And statement 2 says: Not-A does not imply C

Therefore (Alan says) C is isomorphic to (C and A).

Therefore Alan claims to prove that 'not getting wet' is the
same as 'not getting wet when it rains'. Which is illegitimate
for a variety of reasons, inter alia Alan has only considered
the 'pure' case of when it rains.

But all Alan actually said was that umbrellas keep you dry,
whether or not it is raining. And all Marx says that you can't
get surplus-value from simple circulation, whether or not you
exchange at values.

There are, I think, other possible places your critique could
insert itself. But before passing to them and to the second version
of the critique, I think as ever it is important to try and get
clear the actual structure of the argument in Chapter 5, including
the missing Boolean variable and accepting that price-value
equivalence appears only as a special case of simple commodity

Chapter 5 general question: Does simple circulation explain

1) Case 1: can surplus-value result from exchange between two
isolated parties if they exchange at values? No, because
neither party to the exchange parts with more or less than what
they gain.

2) Since surplus value cannot result from exchange even
between two isolated parties, never mind in society as a whole,
let us study the more general case, that is "let us therefore
assume an exchange of non-equivalents" (p262)

3) Case 2: can a general increase in prices explain surplus-
value? Yes, it can, as long as we consider only the act of
sale. "In this case the seller pockets a surplus-value of 10".

4) Now study not just C-M but also M-C. Still in isolated
exchange, we find that anyone who sells and then buys, must
lose in the second exchange exactly what they have gained in
the first. Thus, no surplus value can arise from C-M-C (simple
circulation), even for an isolated seller, through a general
price increase alone. [This result holds for all prices, not
just price-value equivalence]

5) Case 3: can we explain surplus-value by postulating a
class "which buys but does not sell" (for example the ancient
Roman dictators). Yes, but such a class must from somewhere
acquire the money with which it buys. If it obtains this money
by noncapitalist means (eg tribute) then it does indeed secure
surplus value, but during the seizure of the money, not the
spending of it. We now set this digression aside and 'keep
within the limits of the exchange of commodities'

6) Case 4: Can we explain surplus-value by assuming a seller
who sells dear and buys cheap. Yes. A "may be clever enough to
get the advantage of B and C without their being able to take
their revenge".

7) Does this explain the surplus-value of the capitalist
class as a whole? No, because the sum of price-value
differences over the whole class of sellers, must be zero.
Proof: after exchange, the same commodities are present as
before. The value of each commodity, as proved in Chapter 1,
cannot be modified by exchange. Therefore, the value in the
hands of the sellers is the same as it was before.

8) We have now proved that *simple circulation* cannot
produce surplus-value under any of the assumptions, and for any
of the reasons, proposed by the economists.

9) Since *simple* circulation cannot produce surplus value,
we must now ask what can.

10) Can it be something outside of circulation altogether?
That is, can a producer create surplus value merely by selling
a product created with her/his own labour?

11) No. Gil labels this conclusion 'B' in his second version
of the critique, and - I think - mistakenly - takes it as
something Marx wishes to prove. But Marx actually says: "it is
therefore impossible that, outside the sphere of circulation, a
producer of commodities can, without coming into contact with
other commodity-owners, valorize value, and consequently
transform money or commodities into capital". I.e. Marx
disproves it, or claims to. And I think he has to, because he
shows (in chapter 6) that surplus value arises from the purchase
and sale of a special *commodity* - labour power.

12) "Capital cannot therefore arise from circulation, and it
is equally impossible for it to arise apart from circulation.
It must have its origin both in circulation and not in

We'll come back to this Hegelian contradiction in a tick.

Right here I just want to note that statement (12), I think, is
almost as far as Chapter 5 actually goes, except for the statement
that Marx will now deal with surplus value using exchange in its
'pure' form, which has caused so much grief. Then comes hic Rhodus,
hic Salta, and in Chapter 6 the actual dirty deed is done.

Therefore, looking at what you say about the Historical-Strategic
perspective, it seems to me that the conflicts between your
view and Marx's appear in a different place. Surely, what you
should be disputing are points like 5 and 11, where Marx
specifically denies that antediluvian circuits can give rise to
surplus value? This would also be important in any discussion
of the relation between capitalism and noncapitalist circuits,
of which there are many, in modern society.

I just think that you are biting off far more than you need to
chew. Instead of taking on the whole of Marx's value theory, I
think you should co-exist with it; I don't think the conflicts
between the theory you have described, and Marx's value theory,
really exist. But I can't tell until I've heard the theory

You could conceivably construct a critique which went as follows:
Marx has only established that C cannot arise from circulation in
the simple case; he has not reconstructed the same argument when
he passes to the more general case of capitalist circulation. Maybe
this is the real substance of your critique.

I think such an argument could be rebutted, but it seems to me
closer to what you are trying to say.

However if all you want to do is nail Charlie using modern logic,
the place is surely point 12. Never mind the old A, B, C,
implies, isomorphism what-have-you: here we have "A and not-A",
plain as the nose on your face. Tut tut, can't be, nice theory
shame about the math.

But, I'm sure you agree, it is more helpful to understand what
he is getting at. The point he wishes to make - in fairly
standard Hegelian logic - is that the concept of circulation
must be extended, given more determinations, than we find in
simple circulation. This is a reflection-determination; we find
that the concept of circulation as so far developed entails a
contradiction and conclude that it must be enriched.

We must therefore seek something which *is* bought and sold -
'has its origin in circulation' and *is not* found in simple
circulation. That is, it is found in a more developed type of
circulation: capitalist circulation as a whole.

There is a complex issue as to whether this procedure is logical-
genetic or historical-genetic, that is, whether the 'simple
circulation' under discussion is a precapitalist stage of society
or simply an early stage of abstraction in the derivation of the
purely capitalist categories of the later Volume I. Engels sometimes
seems to suggest the former, Sweezy et al enthusiastically adopt
this,("the law of value is essentially a theory of general
equilibrium developed in the first instance with reference to simple
commodity production" - p53 of The Theory of Capitalist Development)
and it has entered Marxist folklore.

Myself I think it is logical-genetic rather than historical-genetic.
But on either interpretation, the concept of circulation in chapter 5
as so far is simple circulation, and chapter 5 successfully proves -
I think - that exploitation cannot arise from it.

So what might you have a quarrel with?

Well, let's turn to the second version of your critique in OPE
879. Here you introduce a new Boolean variable B, 'a condition
arising outside of exchange'. Writing C as before for exploitation,
you then attribute to Marx the statement that C implies B.

The problem with this is that Marx says the opposite: he says
(two paras later) that C cannot arise from B, that exploitation
*cannot* arise 'outside the sphere of circulation'. His
language is very strong: he says it is impossible.

The citation which, you claim, asserts that C implies B,
actually asserts that C cannot arise from SC, from *simple*
circulation. This is better expressed as 'No SC implies C'

The conclusion that follows from this, is not that exploitation
arises outside of circulation, but that it arises outside of
simple circulation. Hence, it must be produced by something
which is a part of circulation in general, but not a part of
simple circulation.

This implies a particular type of commodity purchased *only* to
produce other commodities: labour-power.

This appears only in a more extended form of circulation,
capitalist circulation: C'-M-C-P...C'. Its special nature is
that it emerges as a commodity only when C' is extended to
include the purchase and sale of labour power. In this case, we
no longer have simple circulation, but simple circulation plus
the sale of labour-power, or capitalist circulation. Labour
power is not, as Simon has pointed out, a capitalistically-
produced commodity. It has an independent circuit of its own,
side-by-side with the simple circulation component of C'-M-C.

I suspect that what you have a quarrel with is Marx's *disproof*
of B. For, you would have to show that surplus value could
arise from sources *other* than the purchase and sale of labour
power. Therefore, it seems to me, you have to show that surplus
value can arise from sources outside of capitalist circulation,
which Marx has failed to consider.

But in that case, I don't think you have any quarrel with
the central conclusion of chapter 5, namely:

Suggested Agreement 2(conservation of value in exchange)

Exploitation and surplus value cannot arise from the simple
exchange of commodities, whether at prices equal to values
or at prices not equal to values.

Quantity, Quality and the 'pure' case

What has not been dealt with here is, why study only the 'pure'
case of sale at values, in the succeeding development of
chapter 6?

I think this argument is easier to understand in quantitative
rather than purely qualitative terms. I think it is much
clearer with numbers, though it can be done, as Marx here has,
in qualitative terms. It requires the result from point 7 above
(sum of values = sum of prices, the quantitative expression of
the result that surplus-value cannot arise from simple

But in order to furnish the proof, I need to use this result
(which chapter 5 does establish). So, before proceeding, I need
to know what are the objections to the numerical example I
gave earlier this month, showing that this equality holds in
Marx's given case.