[OPE-L:4498] Re: Not Cricket?

riccardo bellofior (bellofio@cisi.unito.it)
Sun, 23 Mar 1997 02:49:23 -0800 (PST)

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At 5:08 22-03-1997, Alan Freeman wrote:

>Fred wrote to us in [2193] as follows:
>"One of the main points of the KM interpretation, which is discussed by
>Riccardo, is that the value of constant capital and the value of labor-power
>are not equal to the values of the means of production and the means of
>subsistence, respectively. I agree with this point and have argued as much
>in published work and in previous posts. I argue (and I think that Andrew
>and Ted and Alan would agree) that the reason for these inequalities is that
>constant capital and variable capital are not determined as the values of
>the means of production and the means of subsistence, as in the standard
>Sraffian interpretation, but are instead TAKEN AS GIVEN as quantities of
>money-capital that purchase the means of production and labor-power. The
>value of constant capital and the value of labor-power are then determined
>as the value represented by these given money quantities of constant capital
>and variable capital. This is one of the main points of agreement that has
>emerged in recent work of the "new orthodox Marxists" (as David Laibman has
>called us) and our challenges to the Sraffian interpretation of Marx's theory"

Since I am called out of my grave, and Fred's charachterization of my
position was necessarily telegraphic, I try again here to put forward the
main lines of my view on this topic once again. It is also in a nutshell
what I'll say at the EEA conference in Washington D.C.

To be short, let me use a visual way of reasoning used by Gerard Dumenil in
several places. He reminds us that the usual ordering between the law of
value, the law of exchange, and the theory of surplus value, is something
like the following:

law of value => law of simple commodity exchange (at exchange values) =>
theory of surplus value => law of capitalist exchange (at prices diverging
from exchange values, one example being the prices of production)

For exchange values I mean what others has called simple, or direct, or
immediate prices.

Now, when I started studying these things the received opinion in Marxism
(let us say, Dobb) was more or less that the two laws of exchange were two
approsimations to the determination of relative prices, the former being of
course less good than the latter.

The idea of the two approximations was criticized from many quarters. From
the Marxian camp it was said (by, let us say, Colletti and Napoleoni among
many others) that value is the first approximation to nothing since it is
nothing but the product of the basic category of "Capital", that is
abstract labour as the living labour of the wage worker. The Sraffians
urged that the prices of production can be determined without any recourse
to the exchange values as the starting point.

The latter position, of course, "dissolved" the transformation problem
since there is only a single-system, the price of production one. The
former was blocked because it had to face the transformation issue once
again, of going *from* exchange values *to* prices of production.

Now, I am very near to some kind of New Interpretation plus Moseley as
skectched in Foley's paper Recent developments in the labour theory of
value. BUT I think that these view simply depicts the *last* stage in the
transformation, where most of the adherents seem to hold that it is the
*only* stage.

Let me follow again Dumenil and Foley, here. The ordering now is:

law of value => law of exchange (simple commodity *or* capitalist) =>
theory of surplus value

The law of value (the money value of the whole mass of net production as
the expression of total direct labour in the period) is simply held as a

The two law of exchanges are simply seen as *alternatives*.

In this way the issue of the two approximation is redefined as an arbitrary
choice among the two, where the first law of exchange is not anymore the
*starting point* of the transformation.

Once you define the value of money, all the rest follows: the value of
labour power is the labour commanded by the mney wage, surplus value is the
labour commanded by the money profits, and constant capital is the labour
commanded by the advance of money constant capital.

But this, in my view, risks to be a transformation of prices of production
into values, not the other way around.

I think that the usual ordering which sees *two* laws of exchange must be
defended, but with a very different interpretation:

- the first law of exchange is not the simple commodity law of exchange BUT
it is in Marx the insrument of a counterfactual comparison: the living
labour which is actually expended over the living labour which would be
expended *if* worker would produce simply their real wage. Hence the law of
value in a sense *is* the theory of surplus value as the surplus labour
extorted in production. Maarx's point is that he want to *explain* capital,
and that needs to be done starting logically from (input) commodities which
are not already capitalist commodities. This logical role of exchange
values in explaining genetically surplus value, and hence the rate of
profit as is first defined by Marx in the transformation, in a sense
reflects an historical process. But it is nnot the priority of a society of
pety producers with general exchange over capitalist exchange. It is the
historical fact that after the exchange on the labour market workers must
be compelled to work, and work longer than the necessary labour. This
situation (the possibility of capital) must not be assumed as "natural" in
Marx (as the already given reality of capital): that is, as Germans would
say, capital relations must be first of all the result of a "constitution"
process. The law of value is not a postulate but *the argument* developed
in all the first volume of Capital

- putting things in this way, of course the tranformation must go once
again *from* exchange values *to prices*, without conflating the two terms:
where the exchange values are the mediating link between value production
and the circulation of commodities at prices. What disappears in all those
who want *directly* to have the capitalist law of exchange is exactly the
*mediation*. I hold that Marx took a strong meaning of mediation from
Hegel: "mediation is a beginning, and a having advanced to a second, in
such a way that this second is only there because one has come to it from
something that is other vis-a-vis this second".

- once you underline the role of money as *initial* purchasing power of
capital, command over living labour because of the buying of labour power
which goes on before exchange, itis clear that the real wage for the
*class* of workers is decided autonomously by the firm sector, and that is
that real wage which is bought by workers whatever their money wage: this
means that the rate of exploitation at *exchange values* is given prior to
exchange, and irrespective of prices; exchange simply changes the form of
this, giving way to a redistribution of living labour among capitalists and
workers such that the profit/wage ratio in labour commanded terms deviates
from that rate of exploitation in labour embodied terms. But the *class*
relation is still adequately represented by the reasoning at exchange
values: workers have expended that amount of living labour, and received
back that amount of labor embodied in the total real wage as fixed *before*
the transformation.

Let me summarize: I have nothing against the idea that the
value of constant capital and the value of labor-power are determined
(after the tranformation) as the value *represented* (the labour commanded
in exchange) by these given money quantities of constant capital and
variable capital. But I hold that this is the end-result of the
transformation, and more speciically that to understand Marxian view of the
origin of surplus value as a class phenomenon we must hold to a *dual*
determination of the value of labour power, first at exchange values and
then at prices.

Let me summarize again:

(i) the law of value is not a postulate but nothing but the explanation of
the origin of surplus value

(ii) there must be some sense in which the laws of exchange are two

(iii) exchange values are the mediating link between value production and
circulation of that value at actual prices

My answer are: the origin of surplus value is explained through what I call
a counterfactual comparison about the living labour which is required to
produce wage goods and the actual living labour expended; exchange at
exchange values is necessary in the logico-historical sense defined above
(to see how capital is produced, rather that how capital produces: which
means taking also the capital relation as something always problematic, at
least implicitly); the class relation is adequately captured in exchange
value terms.


P.S.: let me add that the idea of value *production* as nothing but labour
as given before exchange, and of prices as simply the *circulation* of that
labour, cutting the mediating link of exchange value, has been clearly put
forward by a Sraffian like Vianello in 1970. BUT he knew well that this was
a break of Marx, while now I see it as advanced by Marxian quarters as a
reprise of Marx.

Riccardo Bellofiore
Department of Economics
Piazza Rosate, 2
I-24129 Bergamo, Italy
e-mail: bellofio@cisi.unito.it
tel: (39) 35 277505 (office)
(39) 35 277501 (dept.)
(39) 11 5819619 (home)
fax: (39) 35 249975