[OPE-L:4982] Re: Production and Circulation

Ajit Sinha (ecas@cc.newcastle.edu.au)
Tue, 13 May 1997 03:01:18 -0700 (PDT)

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At 10:41 AM 5/9/97 -0700, Duncan Foley wrote:

>As I read Marx, he thinks value is created in production through the
>expenditure of living labor, and realized in circulation when commodities
>are exchanged against money. (The one exception is the money commodity
>itself, which does not need to be exchanged, since it's already in the
>general equivalent form.) If we look at an economy over a specific period,
>we can in principle (subject to a number of problems about measurement of
>labor, reduction to simple labor, and distinction between productive and
>unproductive labor) observe how much labor time was expended. We can also
>observe in principle the money value added realized in the sale of those
>commodities (taking account of the time lag between production and sale).
>The stipulation that the "monetary expression of labor time" is equal to
>the ratio of the money value added realized in the sale of the commodities
>to the living labor time expended in their production is supposed to
>correspond to this idea. So I would say that the labor time expended in the
>mass of commodities sold in a given period is "given prior to sale", but
>the expression of this labor time in money is not necessarily given prior
>to sale. The definition of the "monetary expression of labor time" above is
>inherently ex post. It tells us what happened after the dust has settled.
>This might not be a completely satisfactory answer for Alan, because I
>think he wants to know whether I think the "value" of the non-labor means
>of production is determined before sale. While it's obvious that its
>historical cost is predetermined, I tend to be convinced by Fred's evidence
>that Marx thought of these intermediate inputs as being revalued to their
>reproduction cost.

My question is, what is the point of translating these monetary values to
labor units ex-post? What is the analytical significance of this? Moreover,
I don't think we can talk about value of a commodity in labor-time units
either in your case, since we have no idea what to do with the constant
capital element of the commodity. In my opinion, Fred is simply wrong. Marx
argued that the value of the constant capital must be measured by the
labor-time it takes to reproduce the constant capital currently, and not how
much it costs in monetary terms currently. If we take Fred's position, then
we must admit that value is determined by the prices rather than the other
way round, and that too in a most unsatisfactory manner, as I have argued
before and Fred is yet to respond to my criticisms of his tansformation
problem solution.
Cheers, ajit sinha