[OPE-L:5272] [MIKE W] Re: TRPF

Gerald Levy (glevy@pratt.edu)
Mon, 16 Jun 1997 15:11:50 -0700 (PDT)

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At 09:38 16/06/97 -0700, Andrew K wrote:
>(1) Seongjin, Mike W., Jerry, and perhaps others, have discussed whether Marx
>would have moved Part III of _Capital_ III. As Mike wrote (ope-l 5167):
>"That the law of the trpf is presented in Volume 3 may be taken to indicate
>that it is relatively concrete, and so may perhaps be expected to issue
>directly in an empirical trend. But, first, it may be argued that Marx would
>not have located it there had he edited his own work for publication (see, eg,
>Rosdolsky 1968, Fine, 1982)."

Michael W:
Just to clarify: I have no reason to adopt any particular position on this
architectonic question. I merely reported a possibility, mooted by at least
two serious Marx scholars. I am open to persuasion either way.

Andrew K:
>In at least two places, Marx indicates that Part III belongs right where it
>is. Moreover, he says why it belongs there. The basic point is that it is
>impossible to derive the LTFPR directly from the laws of value and
>surplus-value because it is an appearance.

Michael W:
This is a bit too enigmatic for me: an appearance of what? is this
classification of *Capital*'s presentation in terms of Vol III being
concerned with 'appearances' (exclusively? are appearances also discussed
elsewhere in the Book?) something different from the more usual
'neo-Hegelian' attempt to argue in terms of 'levels' of abstraction, with
Volume III dealing with the least abstract level(but not necessarily thereby
*the* concrete (empirical grasped as the articulation of abstract
determinants)). But for Andrew, presumably not, as he has expressed
scepticism about the 'levels of abstraction' metaphor?

Andrew K:
> Once, however, he shows that
>competition does not alter total value or surplus-value, then the laws of
>value and surplus-value can be brought to bear on the matter of the tendency
>of the profit rate, and seen to lead to a falling tendency.

Michael W:
I must say I have some difficulty in the semantics of a *tendency* that is
not *abstract*, and, therefore whose empirical effect will typically be
other than simply a corresponding *trend*, let alone that that trend should
be secular (ie non-cyclical).

Andrew K:
> Actually, this is
>extremely obvious in light of the history of the debate, since the
>"refutations" of the LTFPR rely on the "refutations" of Marx's account of the
>transformation of commodity values into production prices.

Michael W:
Well ... 1) I am not sure how subsequent debates are supposed to impact upon
Marx's own intentions, or indeed upon the actual logic of his work (in
*Capital*). Anyway, it is not obvious that discussion of 'micro-foundations'
is less abstract (closer to empirical 'appearances') than discussion of an
alleged empirical trend of falling observed profits.

Andrew K:
>One reference is Marx's letter to Engels of April 30, 1868, in which he
>explains the structure of Book III: "Further, the *altered form of
>appearance* which laws of value and surplus value -- which were previously
>developed and are still valid -- now adopt *after the transformation of the
>values into prices of production*.

Michael W:
I think it is not in question that production prices appear, in *Capital* at
a lower level of abstraction than values.

Andrew K:
>"III. *The tendency of the rate of profit to fall with progress in society*.
>This is already evident from what was developed in Book I on the *alteration
>in the composition of capitals with the development of the social productive
>force*." [Marx's emphases]

Michael W:
This seems to me to support the notion that the trpf does indeed first
emerge as a highly abstract (and, IMO, *therefore*, highly significant)

Andrew K:
>The other was written earlier, in the manuscript of 1861-63 (MECW 33, p. 104):
>"We have seen that real profit -- i.e. the current average profit and its rate
>-- is different for the individual from profit, and therefore from the rate of
>profit, in so far as the latter consists of the surplus value really produced
>by the individual capital and the rate of profit therefore = the ratio of the
>surplus value to the total amount of the capital advanced. But it was also
>shown that considering the sum total of the capitals ... the TOTAL CAPITAL OF
>THE CAPITALIST CLASS, the average rate of profit is nothing other than the
>total surplus value related to and calculated on this total capital ....
>Here, therefore, we once again stand on firm ground, where, without entering
>into the competition of the many capitals, we can derive the general law
>directly from the general nature of capital as so far developed. This law,
>and it is the most important law of political economy, is that the RATE OF
>[Marx's emphases].

Michael W:

A fortiori this points to the nature of the trpf as an abstract tendency
that, of course, requires more concrete grounding ('micro-foundations', if
you like), but is logically prior to them: as long as there is capitalist
accumulation, involving labour saving technical progress, there will be a
tendency for the rate of profit to fall - *whatever the more concrete
grounding of this tendency may be*.

Andrew K:
[that] the LTFPR expresses itself as a secular trend. The
>problem I see with this interpretation is that it is undialectical and static.
> The whole matter seems to reduce to whether the tendency dominates over the
>countertendencies or vice-versa (as in Sweezy and Robinson). This account
>portrays the tendency and countertendencies as externally related to one
>another. For Marx, however, they exist in a dialectical contradiction, and
>thus he devotes Ch. 15 to bringing them together in their internal
>contradictions. The key to this is that the "various influences" do at times
>"exhibit themselves ... temporally," which means that "at certain points the
>conflict of contending agencies breaks through in crises [... which] are never
>more than momentary, violent solutions for the existing contradictions,
>violent eruptions that re-establish the disturbed balance for the time being"
>(_Capital_ III, Vintage, p. 357). Most of the chapter deals with the
>appearance of the law, NOT IN SPITE OF, but THROUGH, its countertendencies, as
>crisis. For instance: "the development of labour productivity involves a
>law, in the form of a falling rate of profit, that at a certain point
>confronts this development itself in a most hostile way and has constantly to
>be overcome by way of crises" (ibid., p. 367).
>Given this passage and others like it, I do not think the interpretation
>according to which the tendencies dominate over the countertendencies can be
>sustained. But I do agree strongly that the notion that the countertendencies
>dominate over the tendencies is equally contrary to what Marx is saying.
>These alternatives are two sides of the same static, undialectical, coin.
>Essence MUST appear, or it isn't essence. But essence cannot appear as
>essence, or essence would be appearance. Marx argues that it appears, as
>mediated through its internal contradictions, in crises. Note that this may,
>but need not, mean that the observed general rate of profit falls (especially
>in an individual country).
>However, the crisis can be *displaced* away from its source, industrial
>capital, so to understand the appearance of the law, we need to take account
>of intermediate links. For instance, "if" the State creates excess credit to
>prevent a crisis or to get out of a crisis, then demand and the profitability
>of industrial capital may be high. But then the LTFPR "may" appear in the
>forms of a fiscal crisis of the State, slow growth, and so on.

Michael W:
Give or take some difficult stuff about essence and appearance I have no
quarrel with this. In deed it is quite similar to what I myself was trying
to argue. The notion that the counter-tendencies form a contradictory unity
with the trpf is extensively argued in Reuten and Williams (1989): Part
Three. Indications of how the empirically observable effects will be
mediated both by further necessary systemic tendencies, and (increasingly as
we approach the mediated empirical) by various contingencies, appear
subsequently in a number of places in parts Four and Five.

Comradely greetings
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Dr Michael Williams
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