[OPE-L:4762] K-M's concept of "revenue"

fred mosele (fmoseley@laneta.apc.org)
Mon, 14 Apr 1997 04:37:31 -0700 (PDT)

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This is a response to Andrew's (4700), continuing our discussion of K-M's
concept of "revenue".

1. I have argued in previous posts that, for Marx, SURPLUS-VALUE is
defined as the INTRA-PERIOD difference between the price of the commodities
produced in the given period and the cost of producing these commodities.
(Andrew seems to agree with this point; his numerical examples define
surplus-value in the same way.) I have argued further that REVENUE is
defined by Marx as a PART of this specific INTRA-PERIOD difference; more
specifically, that revenue is defined as the part of this specific
intra-period difference that is spent by capitalists on consumption, rather
than invested as additional capital. This is how revenue is consistently
defined by Marx throughout the various drafts of Capital, as part of this
specific intra-period difference of surplus-value.

Since revenue is defined as ALL OR PART of this specific surplus-value,
revenue CANNOT BE GREATER than this specific surplus-value. A part cannot
be greater than the whole.

2. Andrew and Ted have defined "revenue" in a completely different way.
They have defined "revenue" as an INTER-PERIOD difference between the price
of commodities produced a GIVEN period and the capital advanced in the NEXT
period. Therefore, their concept of "revenue" is determined completely
independently of the amount of surplus-value. It is not a PART of a
specific INTRA-PERIOD difference, but is a completely different
INTER-PERIOD difference. And, as I have shown in (4452), their concept of
"revenue" CAN BE GREATER than the amount of surplus-value.

3. Andrew has replied in (4700) that, even if revenue is defined as a PART
of surplus-value (which now Andrew says he does not necessarily agree with;
see more on this point below), REVENUE CAN BE GREATER THAN SURPLUS-VALUE.

Now, I really don't understand this, either from a point of view of formal
logic or from the point of view of Marx's theory. If one variable is
defined as (all or) PART of another variable, how can the first variable be
GREATER than the second variable? According to Marx's theory,
surplus-value is first determined by surplus labor, and then this specific
amount of surplus-value is divided into revenue and additional capital. If
revenue is (all or) part of this specific (and predetermined) amount of
surplus-value, this revenue cannot be greater than this surplus-value. How
can a part be greater than the whole?

To support his argument, Andrew has discussed Webster's definition of a
chair and asked whether, even though Webster's definition says a chair has
four legs, does it cease to be a chair if it has three or four legs, etc.?
I am sorry, but I do not see how this has anything to do with the question
at issue: whether Marx's concept of revenue, which is defined as a part of
surplus-value, can be greater than this surplus-value. It does not explain
how a part of a whole can be greater than the whole. If anyone else agrees
with Andrew on this point, I would very much appreciate hearing from you
and a further explanation. Likewise, if anyone else thinks that Andrew's
argument is as irrelevant as I do, then I would appreciate hearing from you

4. Andrew has also said in (4700) that he does not think that revenue is
defined by Marx as a part of surplus-value. This was a surprise to me
because in (4413), Andrew said that he agreed with me that revenue is
determined as a part of surplus-value:

I agree that "Revenue is always determined as a PART OF SURPLUS-VALUE,
where surplus-value is always determined as the intra-period difference
between the price and the costs of goods produced in the CURRENT period.
If all this surplus-value is consumed, then revenue = surplus-value. If
only a part of this surplus-value is consumed, then revenue <
surplus-value. Revenue is always a part of this intra-period
surplus-value." Our interpretation conforms to this conception ...

Then, in order to illustrate that their concept of revenue "conformed to
this conception" of revenue as PART of surplus-value (i.e. as equal to or
less than surplus-value, and therefore not greater than surplus-value),
Andrew then referred to their most recent numerical illustration, in which
revenue is indeed less than surplus-value

In the illustration in the book, p. 41, in the first period, the costs of
goods is 512 and 288 in surplus-value is then added. Thus the aggregate
price of the output is 512 + 288 = 800. The surplus-value is definitely
determined BEFORE the revenue, and irrespective of the amount of revenue.
THEN, only part of the surplus-value is consumed, 270. This is the
revenue, a PART of surplus-value. The rest of the surplus-value, 288 -
270 = 18 is additional capital advanced, since in period 2, total capital
advanced is 530 instead of 512, and 530 - 512 = 18. (emphases Andrew's)

However, I showed in (4452) that the fact that K-M's "revenue" is smaller
than surplus-value in this example is due to the specific relative
compositions of capital in dept. 1 and dept. 2 which they assume in their
example. If these relative compositions of capital are reversed, then
their concept of "revenue" is greater than surplus-value, according to
their own interpretation. In my view, this makes it clear beyond a doubt
that their concept of "revenue" is not a PART of surplus-value, and thus is
different from Marx's concept of revenue.

But now, Andrew wants to deny that revenue is a part of surplus-value in
order to continue to try to maintain their concept of "revenue" is the same
as Marx's concept of revenue. But how does this square with what Andrew
said in (4413), quoted above? And, in any case, this strategy will not
work. The evidence is too clear that Marx's concept of revenue is
determined as a part of surplus-value, which in turn means that revenue
cannot be greater than surplus-value. This evidence includes Part 7 of
Volume 1 and Part 3 of Volume 2 (and the several earlier drafts of this
Part 3). For example, Section 3 of Chapter 24 of Volume 1 is entitled:
"The DIVISION of surplus-value into capital and REVENUE." In this
analysis, surplus-value is assumed to be a given, predetermined amount,
which is then DIVIDED into capital and revenue. In this analysis, it is
very clear that revenue is PART of surplus-value and that revenue CANNOT BE
GREATER than this surplus-value. How could surplus-value be DIVIDED into
capital and revenue is revenue were greater than surplus-value?

Andrew, what is your textual evidence to support your interpretation that
concept of revenue is NOT a part of surplus-value?

So, once again, I conclude that K-M's concept of "revenue" (an intra-period
difference that can be greater than surplus-value) is completely different
from Marx's concept of revenue (a part of the surplus-value, an
intra-period difference, that cannot be greater than this surplus-value).

In a later post, I will later place this point within the context of K-M's
overall interpretation of Marx's theory of prices of production and I will
also answer Andrew's other questions, but I would like to focus our
attention on this issue for now.