[OPE-L:4316] profit and Volume 3

Fred Mosele (fmoseley@laneta.apc.org)
Fri, 7 Mar 1997 22:16:11 -0800 (PST)

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This is a response to Mike L's (4288) and (4289).

I am very glad that Mike appears to agree with me on the following important
points about Volume 3:

1. the main subject of Volume 3 is the distribution of surplus-value.

2. Marx's theory of the distribution of surplus-value is based on the key
methodological premise that the total amount of surplus-value is determined
prior to its division into individual parts.

3. Engel's edition of Volume 3 at least follows closely the overall
structure of Marx's 1864-65 manuscript.

4. the concept of cost price must be developed prior to the concept of
price of production (and the other concepts in Volume 3) because prices of
production are explained in terms of cost price.

However, Mike still argues that this does not necessarily imply that Volume
3 must BEGIN with cost price; i.e. cost price could still precede price of
production, etc. and yet Volume 3 could begin with some other concept (i.e.
some other concept predede that of cost price). This is of course a logical
possibility. Let us examine this more closely.

On further reflection, it seems to me that, in a sense, the actual starting
point of Volume 3 is the concept of PROFIT, rather than the concept of cost
price. In the earlier drafts of Volume 3 (in the Grundrisse and the 1861-63
manuscript), Marx began directly with profit (more on this below). However,
while working on the 1861-63 manuscript, Marx realized that he needed the
concept of cost price in order to develop the concept of profit (MECW, vol.
33, pp. 78-84 and 91-103). Profit is the excess of the price of commodities
over their cost price. Therefore, in Marx's 1864-65 manuscript of Volume 3,
Marx began with cost price and then followed with profit. But the real
starting point is profit, as in the earlier drafts.

In the GRUNDRISSE, Section 1 of the "Chapter on Capital" was about "the
production process of capital" and Section 2 was about "the circulation
process of capital" (as in the later versions of Volume 1 and Volume 2).
Section 2 on the circulation process is concerned an analysis of such
characteristics as the costs of circulation, the time of circulation,
turnover period, fixed and circulating capital, etc. The main conclusion of
this analysis in Section 2 is that the amount of surplus-value produced by a
given capital in a given period of time, e.g. a year, depends not only on
surplus-labor time, but also depends on the conditions of circulation, and
in particular on the turnover time of capital. This makes it appear as if
circulation is an independent source of surplus-value, in addition to
surplus labor time.

Section 3 (which was very short, only about 30 pages) was then about
"capital as fructiferous, or the transformation of surplus-value into
PROFIT". The key new concepts developed in this section are profit and the
rate of profit. This section begins as follows (and Mike should like this):

Capital is now posited as the unity of production and circulation; and the
surplus-value is creates in a given period of time, e.g. in one year ...
Capital is now realised ... as value which posits value. ...
In a definite period of time, ... capital produces a definite
surplus-value, which is determined not only by the surplus-value it
posits in one production period, but rather by the number of repetitions
of the production process, or of its reproductions is a specified period
of time.

Because of the inclusion of circulation, of its movement outside the
immediate production production, with the reproduction process,
surplus-value APPEARS no longer to be posited by its simple, direct
relation to living labor; this relation appears, rather, as merely a
moment of its total movement.

Proceeding from itself as the active subject, ... capital relates to
itself as self-increasing value; i.e. it relates to surplus-value as
something posited and founded by it ... A capital of a certain value
produces in a certain period of time a certain surplus-value.
Surplue-value thus measured by the value of the presupposed capital,
capital thus posited as self-realising value - is PROFIT. (G. 745-46)

In the 1861-63 MANUSCRIPT, which was mainly an initial exploration of the
main themes of Volume 3 (i.e. of the different parts or the forms of
appearance of surplus-value), Marx broke off in the middle of a discussion
of merchant profit to begin a draft of Volume 3 (see Marx-Engels Collected
Works (MECW, pp. 69-145). Marx started a new notebook (notebook 16 out of
23) and labeled it "Notebook Ultimum". Evidently, Marx's work in the
previous notebooks had given him sufficient clarily to start a new draft of
Volume 3. This draft is entitled: "Third Chapter: Capital and PROFIT".
Section 1 is entitled "Surplus-value and PROFIT". This draft begins very
much like the eariler draft in the Grundrisse:

Considered in its totality (wholeness) (or considered completely) (or in
its completeness) the movement of capital is a unity of the process of
production and the process of circulation.

The surplus-value produced with a given period of circulation (let us take
e.g. a year ... ) when measured against the total capital which has been
advanced is called - PROFIT. (Under profit is included not only interest
- known to be a mere portion of the total profit - but also the rent of
land ... (MECW. 69)

Therefore, it seems clear to me why Volume 3 starts with profit and should
start with profit. Assuming that the main subject of Volume 3 is the
distribution of surplus-value and the forms of appearance of surplus-value,
and that the total amount of surplus-value is taken as given in this Volume
3 analysis (and Mike and I seem to agree on these points), it seems
perfectly logical that the starting point of the analysis of the
distribution of the total amount of surplus-value is this total amount of
surplus-value, reconsidered in relation to the total capital, as the first
and most fundamental form of appearance of surplus-value.

With what other concept should one start an analysis of the distribution of
surplus-value, besides the total amount of surplus-value produced in a given
period of time? I guess it is time for Mike to tell us what is his
preferred starting point for Volume 3. I would especially like to know how
this alternative starting point is a better starting point for an analysis
of the distribution of surplus-value.

Mike and I also have a disagreement about whether the total amount of
surplus-value, taken as given in Volume 3, is determined solely in Volume 1
or also depends on the Volume 2 analysis. I will leave that question for a
later discussion in order to focus first on this question of the starting
point of Volume 3.