# [OPE-L:1006] Allin's question in OPE-L 985

Alan Freeman (100042.617@compuserve.com)
Thu, 8 Feb 1996 07:49:41 -0800

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I want to respond to Allin's post which I found very useful
because it has a different 'take' than the discussion Gil and I
have been having, and I can hopefully clarify some things in
another way. But this response also relates to the debate with
Gil and may clear some things up there, too.

have to convince him he is wrong, only that my argument makes
sense (Why? because he isn't attacking Marx). So this is a
response to his request for clarification and not an attack on
his position.

Here is the reply to point 1, and the reply to point 2 follows

On the point as it stands I have no disagreement; the
conventional definition v = vA+L (actually Tugan-Baranowsky's,
tho' better known as Bortkiewicz's) does 'define values
independent of prices'. And if one also defines prices in Tugan's
manner, which is how more or less everyone now does it, Marx's
equalities are not preserved.

However, I would point out that the problems with this
definition arise earlier than Volume III; I think the
discussion with Gil has drawn attention to this fact.

If one adopts v=vA+L, then *any* departure of prices from

Thus, if a capitalist buys goods to the value \$10, and pays \$15
for them, and if workers add \$10 to the product, then on the
definition which says that the product is worth \$20, the
capitalist's profit is not equal to her/his surplus value.

This indeed crops up in the p274 example where Marx treats rent
as part of constant capital. I use \$ to represent pounds
because of ASCII, and assume that by 'rent' Marx means 'rent'.

Raw material \$342
Spindles \$20
Rent \$6
Coal, gas, etc \$10

'Therefore' (says Marx), 'the constant portion of the week's
product amounts to \$378.

This is just the sum of the above. The product sells for \$510
and so Marx says:

Value-product L = \$510 - \$378 = \$132
Wage he gives as \$52
======================================
Hence surplus-value = \$132-\$52 = \$80
======================================

Now this is also the capitalist's money profit. But if we apply
'equation 1' scrupulously we cannot accept rent as part of the
value of constant capital. Marx should apparently have said:

C = \$372
L = \$510-\$372 = \$138
less wage (V) of \$52
surplus-value = \$86
=====================
of which rent= \$6
=====================
Profit = \$80

and surplus-value is no longer equal to profit. You can escape
this problem as you did by arguing that 'rent' here does not
really mean 'rent'. But the example illustrates the point; once
you adopt equation 1, *any* departure of the prices of inputs
from values destroys the equality of profit and surplus-value.

Returning to the first case where the value of inputs is \$10
and their price is \$15, our position is the very simple - I
even call it 'naive'.

The value of the product is:

constant capital (C) \$15
value-product (L) \$10
Value of the product = \$15+\$10 = \$25.

Then surplus value is clearly equal to profit, provided of
course one also accepts, with the 'New Solution' that the value
of variable capital is equal to the value of the money wage.

If it worries Gil I freely concede this is a tautology; in the
second paragraph of chapter 9 Marx says 'Since the value of the
constituent elements of the product is equal to the value of
the advanced capital, it is a mere tautology to say that the
excess of the value of the product over the value of its
constituent elements, is equal to the expansion of the capital
advanced or to the surplus-value produced".

Moreover this interpretation corresponds precisely to Marx's
language. Everyone reads the words 'constituent elements'
without further thought as the value of the consumed means of
production. But what he says is that "The capital C is made up
of two components, one, the sum of money c laid out upon the
means of production, and the other the sum of money v expended
upon the labour-power; c represents the portion that has become
constant capital, and v the portion tha thas become variable
capital". It is the money, not the means of production, which
comprises the constituent elements of capital.

Does this define values independent of prices? See next post...

Alan