[OPE-L:5267] Re: x+a = revenue

Ajit Sinha (ecas@cc.newcastle.edu.au)
Mon, 16 Jun 1997 01:55:36 -0700 (PDT)

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At 11:18 AM 6/14/97 -0700, Andrew Kliman wrote:
>A reply to Fred's ope-l 4818.
>Against Ted's and my work vindicating the internal consistency of Marx's
>account of the transformation of commodity values into production prices, Fred
>has argued that capitalist's revenue cannot exceed surplus-value. Marx, to
>the contrary, writes:
>"If the annual surplus-value on a capital C = x, for example, the cheapening
>of those commodities that go into the consumption of the capitalist may bring
>it about that x - a is sufficient to procure the same means of satisfactions,
>etc. as before. A portion of the capitalist's revenue = a is thus set free
>and can now serve either to expand his consumption or be transformed back into
>capital (accumulation). Conversely, if x+a is required in order to continue
>with the same mode of life, either this expenditure must be restricted or else
>a portion of income = a that was previously accumulated must now be spent as
>revenue" (Karl Marx, _Capital_, Vol. III, Ch. 6, section 2, fourth paragraph,
>p. 206 of Vintage ed.).
>This is conclusive proof that Fred's objection is wrong. Since
>x+a > x
>and since
>x = surplus-value
>x+a > surplus-value.
>And since x+a "must now be spent as revenue" in order to maintain capitalist
>consumption in the face of rising prices for the things they consume, then, if
>capitalist consumption is maintained,
>x+a = revenue
>and therefore
>revenue > surplus-value.

Since Fred is out of touch with ope-l, I have decided to step in and not let
Andrew's 100 false assertion go unanswered. Andrew's position is a
conclusive proof that he does not undersand Marx. What Marx is saying is
that: let's suppose x labor-hrs is the total amount of surplus value
produced in the system. Some of this surplus value would be produced in the
form of constant and variable capital, if the system is an expanding system,
and a part of x would be produced in the form of luxury goods that is used
as capitalists consumption. Now, let's suppose the situation changes. There
is a technical change in luxury good sector. Now, it takes less labor-time
to produce the same amount of luxury goods as in the previous case. So now
we are left with some free labor in the luxury good sector, given that the
system has produced the exact same amount of capital goods, wage goods, and
luxury goods as in the previous case. This release of labor in the luxury
goods sector could now be employed in producing either more of capital and
wage goods increasing the rate of accumulation, or more of luxury goods
increasing the total real consumption of the capitalists. "Coversely", if it
has become more difficult to produce the luxury goods compared to the
previous period, then thre must be more labor needed to maintain the same
level of accumulation as well as the same level of capitalists' consumption.
But this cannot happen, so either the capitalists will have to cut their
consumption or sacrifice on the rate of accumulation. Thus "x+a" here means
that "a" is the increased amount of labor needed to maintain the system at
the same level as previously. But since this additional labor is not coming
from anywhere, either capitalist consumption must fall by "a" or capital
accumulation must fall by "a". Therefore, it does not mean that revenue is
greater than surplus value. Surplus value remains the same in both the
situation. In all the cases revenue will only be a part of the surplus value
as long as the system is expanding. Only in the case of simple reproduction,
the revenue will be equal to surplus value. And when revenue exceeds the
surplus value, then it means that the capitalists are eating up their
capital, and in the long-run the system will no longer exist. That's why
this case is considered not viable for a long run analysis. Cheers, ajit sinha
>Because Fred's *interpretation* of the other passages concerning revenue that
>he and I have discussed denies this possibility, while the author affirms it,
>Fred's interpretation of those passages must be rejected. The above is
>consonant with my interpretation of those passages.
>The key methodological lessen to be learned is that statements Marx makes must
>be understood in relation to the whole of his work, not read as
>decontextualized "definitions."
>Andrew Kliman