[OPE-L:4785] Re: capitalism consumption and the rate of surplus-value

Ajit Sinha (ecas@cc.newcastle.edu.au)
Tue, 15 Apr 1997 01:05:02 -0700 (PDT)

[ show plain text ]

At 10:40 PM 4/14/97 -0700, Fred Moseley wrote:

>I am finally getting around to responding to Ajit's (4638) on whether the
>rate of surplus-value according to my interpretation, or the new solution,
>depends on capitalist consumption. Ajit, thanks for your response to my
>1. First of all, we may have to distinguish between Foley's and Dunemil's
>version of the new solution. In looking back quickly at Dumenil's works on
>the new solution, I could not find anywhere where the rate of surplus-value
>was explicitly defined. So let's leave Dumenil aside for now.

Now, what kind of Marxism one can build on a theory which does not even have
a definition for rate of surplus value?
>The main point is that the definition of the rate of surplus-value that
>Ajit gives for Foley and me is wrong. Ajit defines "our" rate of
>surplus-value as a ratio of LABOR-TIME quantities as follows:
> "your" rate of surplus value is determined as:
> (1) take total prices of the *net output* in a given money commodity terms
> (say y) equate it to total live labor-time (say L).
> (2) L/y = 'value' of monetary unit in terms of labor-time.
> (3) Given money wages (say w)
> (4) w x L/y = 'value' of variable capital
> (5) L - (w x L/y) = 'surplus value'
> (6) [L - (w x L/y)]/[w x L/y] = 'rate of surplus value'
> Is that right? Now, by "your" I mean the 'new solution'. If yours differ,
> then let's talk about the 'new solution' first.
>But Foley and I do not define the rate of surplus-value in this way, but
>rather as a ratio of MONEY quantities, more specifically as the ratio of
>surplus-value to variable capital, where variable capital is defined as the
>money wage and surplus-value is defined as the difference between money
>value added and money variable capital (see p. 36 of Foley's book or any of
>my papers on the transformation problem).

So your and Foley's solution to the transformation problem has nothing to do
woth labor quantities at all? Then what kind of transformation problem you
are 'solving'? The definition of surplus value and the rate of surplus value
I have given you is the most generous definition you can have. Your
definition is simply profit-wage ratio. Now, if you take the condition that
total living labor is equal to total money value of net output, then your
profit-wage ratio must come out to be the one I have given you. Or, are you
saying that you no longer hold the condition that total living labor is
equal to total money value of net output. Or that the 'value of money' is
not determined by the way I have done above?
>In terms of these (our) definitions, the rate of surplus-value is not
>affected by capitalist consumption. Variable capital is taken as given as
>the money capital expended to purchase labor-power and money value added is
>determined by the quantity of living labor. Neither of these variables is
>affected by capitalist consumption. If capitalist consumption changes,
>neither variable capital or surplus-value changes. It simply means that
>the given amount of surplus-value now purchases a different bundle of
>goods. Ajit's argument as to why our rate of surplus-value is affected by
>capitalist consumption is wrong because it is based on a different
>definition of the rate of surplus-value.

Not really! As you say, your rate of surplus value is profit-wage ratio.
Given a money commodity, a change in the composition of net output would
most likely change the money value of the net output. Now, given your money
wages, the profit-wage ratio would change, since profit is nothing but the
money value of net output minus money wages. Above you say that V is given
by money wages and S is *determined by the "quantity of living labor*. Now,
please tell us how this "quantity of living labor" is related to the "money
value added". Now, if it is the same as I have suggested above, ie. total
money value of net output is put equal to total living labor time, then you
cannot escape my conclusion. If you think you can, then you will have to
prove it, rather than just assert it.
>2. Ajit goes on to say that Lipietz (one of the proponents of the new
>solution) was aware of this "problem" in the new solution, as evidenced by
>the following passage:
> Suppose w(B) is the part of the value added which is paid to workers,
> which they hasten to spend on necessities, and if possible on
>discretionary items. But, surprisingly, if the structure of production
>changes, so that the price system changes, as a consequence the frontier
>of the workers' budget set will move. AT A SINGLE RATE OF EXPLOITATION,
>and value of labor power, workers might be able to afford both
>necessities and some luxuries, or not even their necessities, depending
>upon the structure of production. THIS DOES NOT FIT VERY WELL WITH MARXIST
>INTUTION." (Lipietz, 1982, p. 83, first emphasis mine, second emphasis
>But Lipietz' point is not the same point Ajit is trying to make. Lipietz
>is saying that, WITH A SINGLE RATE OF SURPLUS-VALUE, the quantity of
>consumer goods workers are able to afford will be different according to
>the price of these consumer goods, which in turn depends on the structure
>of production. The rate of surplus-value does not change; instead the
>quantity of means of subsistence may change even though the rate of
>surplus-value does not.

Of course he is saying the same thing, Fred. If he had put it in such stark
terms as I have, how many followers you think he would have gotten by now?
The implication of his mathematics is both what he says and I say. It is the
same thing said in two different ways. Let me quote Lipietz again:

"the average rate of profit is a function of the rate of exploitation, of
the technical coefficients of production in each sector, and of the
*allocation of social labor* among the sectors, and thus the structure of
output." (p. 78)

Now, my point has been that a change in the allocation of social labor
changes your average rate of profit, as Lipietz acknowledges. Now, in yours
as well as all the 'new solution' system the money wages is taken to be
given. You define rate of surplus value as profit-wage ratio. Since wages
are constant and profit is changing, wouldn't the rate of surplus value
change? Think about it. Cheers, ajit sinha