[OPE-L:4386] RE: K-M's concept of "revenue"

andrew klima (Andrew_Kliman@msn.com)
Fri, 14 Mar 1997 20:12:12 -0800 (PST)

[ show plain text ]

A reply to Fred's ope-l 4385. I thank him for bringing my typo to my
attention. He is right that the passage on p. 42 reads "Each department's
total price (C'-M') in period 1 [not 2], minus the sum of its advances to
production (M-C) in period 2, equals the revenue (m) that the collective
capitalists consume unproductively on AC [articles of consumption] purchased
from Department II."

That's what I meant to write.

So why do I disagree with Fred when he wrote that "KM define "REVENUE" as the
difference between the price of the commodities produced in the CURRENT period
and the cost of producing these goods in the NEXT period"? My point was
simply that there is a difference in MEANING between "the cost of producing
these goods in the NEXT period" and "advances to production." The former is
not part of the *definition* of m; the latter is. m is *defined* as total
price minus advances. To be sure, the sum advanced may EQUAL the cost of
producing the goods, and this is the case given the assumptions of our
illustration, but the concepts are not identical. Since we were talking about
whether our interpretation of Marx's category corresponds in MEANING to the
actual category, I wanted to be precise. Revenue is not *defined* in terms of
the cost of goods, but in terms of how the surplus-value or total value is
used. Were we have to *defined* m the way Fred says we did, he would be right
that this concept is not found in Marx. But the concept as we actually
defined it is right there in Vol. II, Chapter 2, which examines the circuit of
productive capital, i.e., the reproduction process.

Fred: "I repeat that there is nothing like this concept in Marx's theory
(that I know of ), or at the very least, there is nothing like this concept in
Marx's analysis of reproduction. Andrew points to one passage in Chapter 2 of
Volume 2 in which Marx discusses a series of exchanges in which the
surplus-value contained in this year's output is first realized in the form of
money through the sale of this year's output and then used to buy capitalist
consumption goods produced this year."

And the remainder of the total value is used to buy means of production and
labor-power, i.e., to reproduce capital in its material forms. So the concept
is right there in Marx's analysis of reproduction in Ch. 2.

Fred: The surplus-value then "makes its exit from circulation" (since it is
not reinvested as capital in the next period). This surplus-value is equal to
the difference between the price and the cost of this year's output, and is
determined before these
transactions take place. Nothing is said about a concept of "revenue"."

And precisely what does Marx call surplus-value that "is not reinvested in the
next period"? According to Fred himself in ope-l 4367 --- "revenue":

"Marx's own concept of "revenue" is defined as a part of the total
surplus-value, and in particular to that part of surplus-value that is spent
AJK] (see e.g.
Chapter 24, Section 4, of Volume 1 of Capital, which is about "the division
of surplus-value into capital and REVENUE.". This concept has to do with
the division of surplus-value into revenue and additional capital, which is
important in Marx's analysis of the reproduction schemes and in his analysis
of accumulation."

So even if Marx had not said anything about a concept of revenue in II, 2, I
don't understand what Fred's complaint is.

But Marx does, as I noted. Why is Fred ignoring my citations to pages 149 and
152? On p. 149, Marx refers to c-m-c as "the circulation of the capitalist's
revenue." On p. 152, he discusses "the expenditure of the capitalist's
revenue, m-c".

Fred: "There is no concept defined as an inter-period difference between the
of the output of this period and the costs of production in the next period."

No, of course not. That's why I keep denying, rightly, that we defined it in
this way. But there *is* a concept of revenue defined something like "that
part of surplus-value that is spent on consumer goods, RATHER THAN ACCUMULATED
AS ADDITIONAL CAPITAL." As I noted, this is equivalent to saying that
revenue is the part of total value that isn't recommitted as total (original +
additional) capital.

Fred: "Andrew is right about one thing - there is no dept. 3 in Marx's
analysis of

Good, we agree. If one is concerned about categorial precision, phrases like
"Marx's equilibrium condition for department 3" and "surplus goods" should not
be used.

Fred: "the demand side for Andrew's equilibrium condition for dept. 2 is
variable capital plus REVENUE, rather
than variable capital plus SURPLUS-VALUE, as in Marx."

Of course. Marx obtained his particular balance condition on the basis of his
explicit *assumption* that prices weren't changing. But we were dealing with
changing prices and, when prices change, simple reproduction in material terms
requires that the price of Dept. II's output equal v + m, not v + s. A
moment's thought enables one to see that the *general* form of the balance
condition for simple reproduction in material terms is that the output price
of Dept. II in this period equals the expenditures for v and m next period,
and that Marx's Vol. II balance condition is just a special case that happens
to hold because, if prices aren't changing and there's simple reproduction,
then it happens to be the case that s = m. Please re-read Marx's discussion
of the impact of price changes on the relation between (tie up and release of)
capital and revenue in Vol. III, Ch. 6, and *then* tell me whether you still
think Marx's method is to hold the sums of value invested given even when
prices change.

Andrew Kliman