[OPE-L:4908] Re: ideal vs real value

Gerald Levy (glevy@pratt.edu)
Sun, 4 May 1997 15:49:00 -0700 (PDT)

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Michael P wrote in [OPE-L:4907]:

> Let me offer a possible conceptualization of a crisis. Keep in mind
> Marx's understanding that a trivial matter can set off the crisis.
> Suppose that we begin with a financial panic, just to see what happens
> to capital values. What I as a capitalist might see will be a sudden
> decline in my capital value. Other capitalists will see the same thing
> -- but what is really taking place is a decline in the monetary value of
> my capital. The total value of all capitals can be unchanged, even
> though I may may not be able to sell my product at the moment.

Let me see if I can crack open [the conservation of value] door a little:

Suppose you were _not_ able to sell your product and that product
physically degraded with time such that it no longer has a use-value and
can no longer serve as a bearer of exchange value.

1) since your product no longer has a use-value and an exchange value, can
it represent value and be a commodity?

2) can we expect that what you and other individual capitalists will
lose in value during the slump will exactly match the gains in value
[caused by a transfer of value] for other capitalists? Is it not
possible that other capitalists will gain value but there will still be
a net loss in aggregate value?

3) now suppose that your losses as an individual capitalist cause your
firm to go out of business. Clearly, other capitalists in the same
branch of production will gain some social value with your loss. But,
will the other firms in your branch gain the _same_ amount of value
that you lost in individual value? What would happen to the value of
your stock of constant fixed capital if it is idle and abandoned? Will
the devaluation of your fixed capital necessarily correspond to an
equal increase in the valuation of the remaining stock of fixed
capital held by other capitalists in your [former] branch of

4) now suppose that what happened to your firm has happened to most other
firms and there is an "overproduction of commodities". Suppose further
that your firm and many other firms borrowed heavily for investment in
fixed capital. What would happen to the banks that loaned you and other
capitalists money capital for investment? Suppose that some of those
banks also then went out of business. Will the loss in value by both
industrial capital and bank capital necessarily correspond to an equal
gain in value for other capitalists? Why or why not?

In solidarity, Jerry