[OPE-L:4630] Re: "is Fred a new solutionist?"

Ajit Sinh (ecas@cc.newcastle.edu.au)
Tue, 1 Apr 1997 00:05:30 -0800 (PST)

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At 10:42 PM 3/31/97 -0800, Fred Mosely wrote:

>I was of course very interested to return home yesterday and read the
>OPEL discussion last week (mainly between Alejandro R. and Ajit) about
>"is Fred a new solutionist?"
>I have certainly have never thought of myself as a "new solutionist". As
>Alejandro pointed out, in my (1993) paper I emphasized my differences with
>the new solution. The paragraph quoted by Alejandro is from a section of
>that paper entitled "Comparison with the New Solution ..." I am sure that
>that section was in the draft I sent Ajit in pretty much the final version.
> So I would say that Ajit is wrong in his interpretation of that paper and
>ask him to clarify on what basis he judges me to be a "new solutionist."

Fred, I'm not all that interested in labeling you. You put whatever label
makes you comfortable. My point was this. You agree with the 'new solution'
that value of labor-power should be calculated by the given money wages,
where 'value of money' is defined by imposing the constraint that total
prices of net output is equal to total live labor-time. As long as you agree
with this much, you are a 'new solutionist' in my book. Because these are
the essential aspects of 'new solution'. Your disagreement with them on
constant capital is well taken. As a matter of fact I make the same
criticism of the new solution in my Ph.D dissertation, which was defended in
1991. However, I do not stress this point anymore simply because my sense is
that the 'new solutionists', particularly Duncan Foley, are mainly
interested in aggregative equalities between prices and values rather than
individual commodity prices. They seem to be more of a macro oriented minds
and do not care much about a theory of prices. But in anycase, my other
criticism which I have put forward earlier that in the new solution the rate
of exploitation becomes a function of capitalist consumption habits is a
more potent criticism, and I think, this would apply to your solution as
well. As far as your method of dealing with constant capital is concerned,
I'll have to reread your paper to comment anything on that. Have a good
conference in DC. Cheers, ajit sinha
>However, my paper for the IWGVT this week, while continuing to emphasize
>these differences, also emphasizes more some of the important similarities
>between my interpretation and the new solution. The subtitle of this paper
>is "a sympathetic critique."
>To briefly summarize some of the important similarities between my
>interpretation and the new solution (all these points have been discussed
>in prior OPEL posts): First, both interpretations emphasize the monetary
>nature of Marx's theory and that the general analytical framework of Marx's
>theory is the circuit of money capital, M-C ... P ... C'-M'. Secondly,
>both interpretations emphasize the general methodological principle of the
>prior determination of aggregate magnitudes (prior to individual
>magnitudes). Thirdly, both emphasize that the key assumption in Marx's
>labor theory of value is that the value added component of the price of
>commodities is proportional to the living labor expended.
>More specifically, another important similarity is that variable capital is
>taken as given, as a quantity of money capital, rather than derived from a
>given physical quantity of wage goods, as in the standard (Sraffian)
>interpretation. The same quantity of money capital is taken as given, both
>in Marx's theory of surplus-value in Volume 1 and in his theory of prices
>of production in Volume 3, so that, in the determination of prices of
>production, variable capital does not have to be transformed from values to
>prices of production.
>However, and here is the key disagreement between the two interpretations,
>the new interpretation determines CONSTANT CAPITAL differently from
>variable capital (as emphasized in the passage quoted by Alejandro).
>Constant capital is NOT taken as given as a quantity of money capital, as
>in my interpretation, but is instead derived from a given physical quantity
>of means of production, as in the standard (Sraffian) interpretation. As a
>result, constant capital changes in the transition from the theory of
>surplus-value in Volume 1 to the theory of prices of production in Volume
>3. In Volume 1, constant capital is equal to the value of the given means
>of production, and in Volume 3, constant capital is equal to the price of
>production of the same given means of production.
>Therefore, I argue that there is a key methodological inconsistency in the
>new solution between the determination of constant capital and the
>determination of variable capital. Variable capital is taken as given in
>money terms, but constant capital is derived from given physical
>quantities. My paper argues that, since constant capital and variable
>capital are specific forms of the general concept of capital, they should
>both be determined in the same way. Either they should both be taken as
>given in terms of money or they should both be derived from given physical
>quantities. Nowhere in Marx's writings is there a suggestion that constant
>capital and variable capital are determined in different ways. My paper
>also argues that there are strong reasons for assuming that constant
>capital and variable capital are taken as given in Marx's theory as
>quantities of money capital, as the two components into which the money
>capital (M) that initiates the circulation of capital is divided. Thus I
>argue that the new solution "goes only halfway" in breaking out of the
>standard Sraffian interpretation of Marx's theory. It breaks out for
>variable capital, but not for constant capital. As a result, it is
>The new solution's inconsistent treatment of constant capital and variable
>capital leads to the following erroneous (in my opinion) conclusions
>regarding Marx's theory of prices of production: (1) Marx made a partial
>error in his determination of prices of production in Volume 3 (failing to
>transform constant capital); (2) the total price of commodities also
>changes from Volume 1 to Volume 3, so that the total price is no longer
>equal to the total value of commodities; (3) the rate of profit also
>changes from Volume 1 to Volume 3, i.e. the "price" rate of profit is not
>equal to the "value" rate of profit.
>So what I am basically arguing is that the new solution should be EXPANDED
>or COMPLETED to include an interpretation of constant capital similar to
>that of variable capital. I think that there is very substantial textual
>evidence to support this consistent determination of constant capital and
>variable capital. If the new solution were expanded in this way, then all
>our other differences (discussed in the last paragraph) would disappear,
>and I would indeed be a "new solutionist" and would be happy to be called
>one. But this is an important "if", and in the absence of this extension,
>I will continue to emphasize the methodological inconsistency in the new
>solution, and the erroneous conclusions that follow from it.
>I should qualify the above and say that I am talking here about Duncan's
>version of the new solution. Dumenil's version is different from Duncan's
>version in significant ways, especially in that Dumenil's version does not
>emphasize the monetary nature of Marx's theory, and even goes so far as to
>argue that, not only Volume 1, but also Volume 3, is mainly about
>labor-values and not about prices and monetary magnitudes (even prices of
>production and profit - Volume 3 concepts - are defined in labor-time
>units). Simon Mohun's version is closer to Duncan's than to Dumenil's
>Therefore, whether or not "Fred is a new solutionist" depends mainly on
>Duncan's response to the above arguments. Duncan has said in his IWGVT
>paper that he "has no objections" to extending the new solution to constant
>capital as I have suggested, and that his work on the "circuits of capital"
>is based on essentially the same interpretation. So perhaps I will be a
>"new solutionist" after all. Maybe we shall find out in Washington.
>I will deal in a later post, probably after Washington, since time is
>running short, with Ajit's critique of my interpretation.