[OPE-L:5098] Re: Abstract prices or absurd, self-contra

Thu, 22 May 1997 08:57:14 -0700 (PDT)

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In ope-l 5094, Ajit writes, referring to Andrew K.:

> Every time I show him that
> his so-called interpretation of marxs theory of value and transformation
> problem that rests on assumptions that prices determine prices and 1$ = 1
> hour of labor are both absurd assumptions...

Im interested in knowing why does Ajit think that $1 = 1 hour of
labor is an "absurd assumption"? As we have seen, he has been making
this statement in many posts, but I havent found a clear explanaition
for this yet.

Morever, a month ago I posted (ope-l 4863) some textual evidence from
Marx's writings where he explicitly makes **this assumption**, even in
direct connection with the so-called "transformation problem" (letter
to Engels, dated August 2, 1862).

Then, I kindly asked Ajit to comment this textual evidence but it
seems either that he didnt received that post or I missed his
response. Since I think this is an important point which is not
clearly explained in the particular interpretation Ajit holds, I am
now re-posting that evidence to knowing his particular way to read it.

Of course, I dont want to direct this question only to Ajit, but also
to other people who, I think, is near to his particular
interpretation (like Paul C., Allin C., David L.) and other people
who has been working for years on this problem like Alfredo S-F,
Duncan F., Alejandro V-B, Mike L., Alan F., Riccardo B, Fred M.,
Michael W., Bruce R., Andrew T. and others who perhaps are "lurking"
in these discussions.

Alejandro R.
Date: Thu, 24 Apr 1997 09:17:12 -0700 (PDT)
From: aramos@aramos.bo
To: Multiple recipients of list <ope-l@anthrax.ecst.csuchico.edu>
Subject: [OPE-L:4863] Re: new solution and the rate of surplus-v

In ope-l 4828, Ajit says:

> By the way, Marx assumed an one to one relation between commodity
> value and money commodity on the *assumption* that labor theory of
> value holds. An assumption he later relaxed, as we all know.

I think it could be useful to our understanding of this problem if
Ajit puts forward some textual evidence re the above statement. On my
part, I consider very important the following passages of Capital,
Vol. III:

1. Chapter 3

"Firstly, the *value of money*. This we can take as constant
throughout." (p. 142, Penguin).

2. Chapter 8

"If we continue to take $1 as the weekly wage of one worker
for 60 hours work and the rate of surplus value is 100%,
it is readily apparent that the total value product that the
worker can supply in a week is $2. Therefore, 10 workers
cannot supply more than $20, and $10 of this $20 has to
replace the wages, these workers cannot create a surplus
value greater than $10." (p. 248)

3. Chapter 13

"Once wages and the working day are given, a variable capital
which we can take as 100, represents a definite number of
workers set in motion; it is an index of this number. Say that
$100 provides the wages of 100 workers for one week. If these
100 workers perform as much surplus labour as necessary
labour, they work as much time for the capitalist each day,
for the production of surplus value, as they do for
themselves, for the reproduction of their wages, and the
total value product would then be $200, the surplus value
they produce amounting to $100." (p. 317)

In these passages of Vol. III Marx considers the monetary expression
of labor (MEL) as a constant or, as he says, the "value of money"
(its inverse) is taken "as constant thoroughout". As it is easy to
see, in his particular example (in Ch. 8 and 13) the MEL is assumed
as $2/working week.

This evidence, of course, contradicts Ajits statement.

None of the passages I quoted above is presented in direct connection
with the transformation of values into production prices. But in the
second of Marxs (as far as I know) 5 tabulars presentations of the
transformation, he explicitly considers the MEL as a constant.

This second presentation is in a letter to Engels dated August 2,
1862. Marx says:

"Let us assume... that the surplus labour = 50%. If, therefore,
e.g. $1 = 1 working day (no matter whether you think in terms
of a day or a week, etc.), the working day = 12 hours, and the
necessary labour (i.e. reproductive of the pay) = 8 hours, then
the wage of 30 workers (or working days) = $20 and the value
of their labour = $30, the variable capital per worker (daily
or weekly) = $2/3 and the value he creates = $1"

Collected Works, Vol. 41, p. 395

So, in this case the MEL is set $1/working day. Immediatly after
this, Marx presents a SINGLE TABLE example of the transformation
(analogous to his second example in Vol III, Ch. 9; see Penguin p.
264) which can be summarized as follows:

Single-table procedure of transformation, 1862
c v sv Value Prod.Price Profit PP/Value
1. 80 20 10 110 113.75 13.75 1.034
2. 50 50 25 125 113.75 13.75 0.910
3. 70 30 15 115 113.75 13.75 0.989
4. 90 10 5 105 113.75 13.75 1.083
Sum 290 110 55 455 455.00 55.00 1.000

As in this example Marx EXPLICITLY assumes MEL=$1/working day, this
table is expressed in both money and labor time.

Of course, in this example Marx uses the definitions of value and
production price which are also implicit in the single table example
of Vol III, Ch. 9 (pp. 263-4) as:

Value = Cost price + surplus value
Prod. Price = Cost price + profit

and that were **explicitly stated** in a passage of the original
manuscript of Vol III that Engels omitted in his edition (see MEGA,
Section 2, Vol. 4.2, p. 240). [All this was presented in my posts ope-
l 3675 and 3705]

Of course, "cost price" corresponds to the production prices of the
inputs as stated in Ch 9, p. 265) (If Ajit wants to see a version of
the single table example of Ch. 9 assuming a stationary simple
reproduction, he can read my ope-ls 3590 and 3705.)

So, differing of what Ajit says, in this case we have that
commodities are being exchanged for their production prices and,
however, the MEL is common for all commodities.

Perhaps Ajits statement is not "going beyond" Tugans "criticism"
(i.e. misunderstanding) between two things: Tugan confused (a) the
production price/value relationships which --as we can see in the
above table-- differ between spheres with (b) the MEL which relates
both quantitative aspects of value and production prices and that is
common for all spheres (in the example $1/working day).

In a given period of time, the MEL is a common relation for all
commodities because it relates the whole abstract labor objectified
and appropriated with its money representation. This is a social,
common, general ratio for all commodities.

Production price/value relations show the difference between the
labour **objectified** and labour **appropriated** by each
particular sphere. These ratios are exactly the same whether one
calculates values and production prices either in money or labor

So, I will wait that Ajit shows us some textual evidence where it is
clear that when Marx "relaxes the assumption that labor theory of
value holds (!!)", in a given period, the MEL is not a general
relation, valid for all commodities.

Alejandro R.

P.S. BTW, I think Marxs method of presentation is a "little bit" more
complex that "relaxing assumptions". Moreover, I think Marx NEVER
thinks of the "labor theory of value" as "an assumption" (!). As
we know, Marx philosophical background was different from, let us
say, Samuelson's.