[OPE-L:4556] Re: Surplus value and capitalist consumption

Ajit Sinh (ecas@cc.newcastle.edu.au)
Thu, 27 Mar 1997 00:23:55 -0800 (PST)

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At 12:54 PM 3/26/97 -0800, Alan Freeman wrote:

>I thought Ajit [4513] stated a genuine objection and I'd
>like to make an initial response to it, hoping that we can
>have an amicable discussion around it. Although I repeat
>ground covered before Ajit arrived, I think it is well worth
>covering it again and I would be happy for Paul and Allin
>or anyone else to chip in.
>Ajit says:
>"you will find that your rate of surplus value would change
>with simple change in capitalists' consumption habits,
>everything else remaining constant. So what happens to the
>whole idea of exploitation is determined at the level of
>This is a serious objection and I hope to give it a serious
>answer that can be treated seriously.
>It seems to me that in order to make this statement we have
>to accept the following assumption: that by adjusting their
>habits the capitalists can change the price of goods that
>have already been sold and consumed.
>Now capitalist consumption is, I think we agree, comprised
>of two elements: the value of the goods that were consumed
>as inputs (for example, the cloth that was used to make
>their jackets), and the new living labour-time expended (for
>example, in tailoring).
>I hope we all agree that the living labour-time cannot be
>modified by the capitalists' consumption.
>Therefore, the only way the capitalists' habits can modify
>the value of what they consume is to modify the value
>transmitted to them by the goods that went into them before
>they were sold, in this case the cloth.
>I am happy with your statement that
> "Every child knows that the amount of money you pay for a
> commodity is its price"
>I am sure any reasonable child would say, surely, once this
>money is paid, then that is the price. But according to the
>reckoning which I and Fred both hold to, the value transmitted
>to the jacket by the cloth is given by this money paid for the
>So Ajit's objection is sustainable only if (as Fred maintains)
>at the moment they purchase the jackets, the capitalists
>retrospectively alter the price of all the cloth which went into
>them, even though this has already been paid and is a matter of
>public record available to all children, and even though the
>cloth has wholly vanished into the jacket.

Well, I didn't know where to cut it. I think you are going on a tangent Alan
(is this considered flaming? if so, so be it). I guess, it would be very
hard to run the criticism of 'TSS-approach' and 'new solution'
simultaneously. My criticism above applies to the 'new solution' approach.
My fundamental difference with 'TSS approach' was laid out in my debate with
Andrew Kliman. You may have to pick it up from there. Now, let me explain
what I meant above. My point is that in the 'new solution', the rate of
exploitation becomes a function of the composition of the net output. So if
we construct two parallel hypothetical situation where everything in the two
economies remain the same except that composition of capitalist consumption
differ, i.e. there is difference in allocation of labor but no difference at
the level of production, you will find that their solution will give you two
different rates of exploitation in the two systems. Now, i think this is a
result that simply does not sit well with Marx's notion of exploitation. If
anybody thinks that it does, then I would like to know how?

By the way, my fundamental question about how prices are determined is still
hanging there for anyone to pick up.

>So I would say that I can dispel your objection, if you will
>let me determine the value of constant capital in the
>manner which all we single-system people agree on, the value
>of variable capital in the manner which not only we
>single-system people but also the New Interpretation people
>agree on, and the passage of time in the manner that most
>children agree on.

How can I let you do that? I think the way you are going about it is flawed.
And that's what we are debating about, aren't we? So for TSS approach, let
me repeat my two questions:

(1) How do you determine commodity values? And how is the "value of money"

(2) If we assume that the system is in simple reproduction schema and
everything in the world, leaving prices out, remain constant from period
zero to period one, then wouldn't you agree that the prices would also
remain the same in period one as they were in period zero. So in this
hypothetical case, you simply don't have to determine prices in period one
if you take the prices in period zero as 'given'. Therefore, according to
your position, a theoretical problem of transforming values to prices of
production should not arise in this situation. Does not it go against the
fundamental grain of Marx's transformation problem? Cheers, ajit sinha