[OPE-L:3651] Re: constant capital and variable capital

aramos@aramos.b (aramos@aramos.bo)
Sun, 10 Nov 1996 19:16:04 -0800 (PST)

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In OPE-L 3598, Allin comments the known paragraph:

> "Since the price of production may differ from
> the value of a commodity, it follows that the cost-price of
> a commodity containing this price of production of another
> commodity may also stand above or below that portion of its
> total value derived from [formed by] the value of the means of
> production consumed by it." (Moscow edition, 164-5)

1) First of all, I inserted the words [formed by] from Penguin
edition p. 265, because it seems to me that this renders better
the German verb "bilden" of the original (MEW, Vol. 25, p. 174)

2) Allin maintains that the phrase "the portion of its total
value derived from [formed by] the value of the means of
production" is an evidence that we could conceive a dualistic
interpretation of the transformation. As far as I understand
Allin's argument, this follows from the phrase because we could
say that, there would be a "cost-price in value terms", formed
by the "value of the means of production".

This argumentation is thus in line with the more general idea
that "value" can be represented by a system completely
independent of prices or, as Allin says in another post, not
"contaminated" with magnitudes form the "surface" of capitalism
[OPE-L 3602]. Prices and values would be absolutely "separated
worlds", related between them only in an "external" way.

In this case, we had a "cost-price in terms of value" formed by
the value of the means of production, and a "cost price in terms
of price" formed by the price of the means of production.
Although in the hidden single-table of Penguin p. 263 [see
OPE-L 3590] and in the single-table of p. 264 it is clear that
"cost-price" -- called by Marx "k" -- is a common magnitude for
both values and production prices, Allin argues that we should
consider that, actually, there are two different magnitudes
regarding cost-prices, one in "terms of value" and another in
"terms of price".

3) I will show that we can read the paragraph quoted by Allin --
and the mentioned phrase-- using the non dualistic, single
system intepretation. For this, I will develop a (boring)
numerical example based on the single-table of Penguin p. 264.

First of all, I will convert the table into a simple
reproduction schema, assuming that spheres I+II produce means of
production and sphere III produce means of consumption. So:

C V k SV Prof PP Value Deviat.
1. 170 30 200 30 40 240 230 +10
2. 70 30 100 30 20 120 130 -10
Tot 240 60 300 60 60 360 360 0

In sector 1 the ratio Value/PP = 230/240 = 0.9583 = R1
In sector 2 the ratio Value/PP = 130/120 = 1.0833 = R2

Let us take the cost-price of sector 1. It is k = 170c+30v = 200.
These magnitudes are the production prices paid by the
capitalists of sector 1 to buy means of production (c) and to pay
wages (v). Now then, these production prices can be expressed as
the sum of the value contained in the respective commodities +
the deviation between value and production prices, i.e. PPi =
VAi + Di.

So, the means of production used in 1 are bought by 170, but the
value contained in them is 170*R1 = 170*0.9583 = 162.9.

Similarly, the wage goods used in 1 are bought by 30, but the
value contained in them is 30*R2 = 30*1.0833 = 32.5.

So, the cost-price in sector I can be decomposed as follows:

k1 = 170c + 30v = 200

k1 = (162.9va + 7.1d)c + (32.5va - 2.5d)v = 200

"va" stands for "value"
"d" stands for "deviation of production price and value"
"c" stands for constant capital
"v" stands for variable capital

Obviously, I can sum the value contained in the components of
the cost-price of sector 1. That is:

162.9va + 32.5va = 195.4va

The cost-price, as Marx argues, doesnt correspond with this
sum, but with the production prices, so that for sector 1 =
200. In this sector, regarding the cost-prices, there is a
deviation of production prices and values which amounts to
200 - 195.4 = 7.1 - 2.5 = 4.6.

4) With the table, and taking into account the above procedure
we can re-read Marx statements.

Marx says:

"the cost price of a commodity, in which the price of production
of other commodities is involved...".

In our example, this cost-price is that of sector 1, so it is

Continuing: "...can stand above or below the portion of its
total value that is formed by the value of the means of
production going into it"

What is the "total value that is is formed by the value of the
means of production"? It is the *value contained* in the means
of production (and, in our example, also in the wage goods). So,
it is 195.4. Thus, it stands below the cost-price, which is 200.
This divergence is a result from the fact that, now, commodities
are sold by their production prices, not by their values.

So, in effect, we can add the values contained into the
commodities, and obtain a "value magnitude", but it doesnt mean
that this magnitude belongs to a "not-contaminated system". In
this particular case, we can obtain a cost-price "in value
terms", "formed by the value of the means of production" which,
as Marx says, differs from the real cost-price, that the
capitalists must pay. However, this doesnt affect the fact that
"k" is a common magnitude for both, values and production
prices. Some lines below, Marx says:

"The cost price of a commodity is a given precondition,
independent of his --the capitalist's-- production, while the
result of his production is a commodity that contains surplus-
value, and therefore an excess of value over and above its cost
price." Penguin, p. 265

It is important to note that, again, value is defined as cost
price + surplus value. So, using the same formula that in the
hidden table (p. 263). For example, in the case of low
composition: Value = k+20+x and production price = k + 20. There
is no evidence that "k" is a different magnitude regarding
values or production prices.

Alejandro Ramos,