[OPE-L:3756] Re: only one composition of capital

Paul Cockshot (wpc@cs.strath.ac.uk)
Mon, 2 Dec 1996 02:16:39 -0800 (PST)

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>Paul wrote in response to Alejandro R. concerning the two "sources" of
>deviations between prices of production and values:
> It depends upon how you define the average commodity.
> If the average commodity has an average value organic
> composition you would be right, if on the other hand
> it has an average price organic composition, there remains
> the possibility that constant capital used in it has
> been purchased above or below its value.
>This comment brings out another difference between the standard interpretion
>and the "monetary" interpretation of the initial givens in Marx's theory.
>According to the "monetary" interpretation, THERE ARE NOT TWO COMPOSITIONS
>OF CAPITAL, a value composition of capital and a price composition of

Paul C:
This merely indicates that you chose to ignore the value composition
of capital.

I depends what questions you are trying to address. Deviations between
price and value in the elements of constant capital only become interesting
in the context of price of production theory under the following constraints:

1. That there exists a statistically detectable, albeit weak, tendancy
towards profit rate equalisation.

2. That there exist industries whose aggregate inputs, despite the law
of large numbers, have prices significantly different from their
values. From working with the British I/O tables I think that I
remember that this criterion was met by petroleum refining, flour milling,
and edible oil and fat production.

3. That a change in the rate of surplus value occurs in the economy as a whole.

Under these circumstances, second order deviations in price from value
would be predicted to produce changes in relative prices. For instance, I would
predict that a fall in the overall rate of surplus value in the economy would
be more likely to cause the relative prices of the industries above to fall
than to rise. It is an advantage of the standard labour theory of value that
it brings such effects to light.

>Marx never once mentioned that there are or could be two compositions of
>capital. Also, when Marx discussed commodities produced by "capitals of
>average composition," he did so unambiguously, without any hint that these
>"average" commodities might be different for values and prices and
>production, even though these discussions were usually concerned with prices
>of production and the fact that the prices of production of these "average"
>commodities are equal to their values. It seems to me that this complete
>lack of any mention of two compositions of capital, even in discussions of
>"average" commodities where it clearly would have been necessary, is further
>evidence against the standard interpretation and supporting the "monetary"

Paul C:
You must realise that you have educational advantages that Marx lacked.
You are familiar with a large body of literature examining these issues,
all he had to go on were some preliminary discussions by Ricardo.
There is not a complete lack of any concept of there being two such
compositions of capital, as the passage that Allin quotes on two sources
of deviations brings out, but there is certainly an absence of a thorough
working out of the implications of this. But do the guy credit, what do
you expect from a pioneer?

But that does not excuse us being equally sloppy with our concepts.

Paul Cockshott