[OPE-L:6334] Re: Historical, real and current costs

Mon, 23 Mar 1998 08:58:37

Re the PIAF:

> Date: Sun, 22 Mar 1998 10:05:22 -0500 (est)
> From: Gerald Levy <glevy@pratt.edu>
> To: ope-l@galaxy.csuchico.edu
> Subject: [OPE-L] Re: Historical, real and current costs

Jerry wrote:

> There are a number of issues that have come up in this discussion with
> Alejandro R and Andrew K.
> Lets go back to the "beginning". Andrew K posed a numerical example to
> Duncan and other "simultaneists" concerning the "valuation of existing
> assets." Andrews [immediate] goal, as I understand it, was to see how the
> "simultaneists" calculated surplus-labour and profit, and the MELT.
> Constant capital was assumed not to exist in order to simplify the problem
> and the math.
> Now lets consider the details.
> 1) of widgets and chunches
> Andrews example specified a one-product economy. The product chosen was
> "widgets" (Andrew: [because] "I got tired of corn").
> In due course there was a discussion of the definition of a widget.
> Andrews definition was:
> > Websters Seventh New Collegiate Dictionary defines "widget" as: "1. :
> > GADGET 2 : an unnamed article considered for purposes of hypothetical
> > example."
> Alejandro then went on to note that widgets and chunches "designate
> something that is everything and, at the same time, nothing."
> _The Random House Dictionary of the English Language_ also defines a
> widget in a manner consistent with Alejandros observation" I.e. it is
> "something considered typical or representative."
> Now lets get back to the specifics of Andrews example. According to
> Andrew, there was a period of time after the working period (and after
> workers were assumed to be paid wages) when the widgets/chunches were
> "drying." This period of time after the working period was still
> considered to be part of the time of production.
> Yet, the specification that the widget must undergo a period of time
> following the working period when it must dry is at odds with the
> definitions of widgets and chunches advanced by Andrew and Alejandro.
> Would anyone argue that a drying period is "typical" and "representative"
> of commodity production in general? I think not. Thus, Andrews "widget"
> is not "something that designates everything and, at the same time,
> nothing." Instead of being an abstract/general/representative/everything,
> it is a concrete/specific/non-representative/particular.
> I conclude, therefore, that the specification of a post-working
> period drying period is at odds with the definition of widgets/chunches.
> Moreover, this is not a small criticism for if the drying period, and
> other *particularities* associated with the production of *individual*
> commodities, is eliminated then the whole issue of working period vs.
> production period in his example also vanishes.

Jerry: you''are right concerning DICTIONARY definitions, but not the
*specific notation* Andrew and I are using in this example. We are
designating, in this specific, exercise, as "widget" or "chunche" a
commodity in which working period is not equal to production
period. Initially, we discussed dictionary definitions but you should
see those definitions IN THE CONTEXT of the exercise.

An analogy: According to my dictionary the my Dictionary "a"
"is the first letter of the English alphabet." Now then, in
Duncan''s corn model, "a" is the "units of corn to produce 1 unit of
corn." I would be weird to say that Duncan''s definition of "a" is
"at odds" with the definition given by the dictionary.

What Andrew is proposing is simply a modified "corn model" in which
the commodity produced has the additional property that working
period is not equal to production period. He is considering a "more
concrete" corn model. That''s all.

> 2) V2, Ch. 13
> Andrew and Alejandro have drawn our attention to Ch. 13 in Volume II.
> Alejandro has gone so far as to argue that Andrews example was
> essentially the same, or very similar, example as Marx used in that
> chapter.

As I explained in another post that has not been forwarded yet by
the server, I don''t argue that. What I say is that Andrew took the
property "working time not equal production time" from that Ch. and
introduced it into a corn model.

> I do not believe that interpretation can stand closer scrutiny.
> As I pointed out in my last post, the separation between working-time and
> production-time arises for *particular* commodities because of "the very
> nature of the product and its fabrication ...." In other words, this
> distinction is not a general characteristic of commodity production.
> Rather, it is a distinction only applicable to a sub-set of commodities.
> Moreover, the reason for this gap between working-period and production
> period varies by individual commodity. E.g. some products might undergo
> particular "chemical" changes, whereas other products undergo particular
> "physiological" changes.
> Yet, if we are to calculate surplus-labour, profit, and the MELT, we need
> concepts that are valid for commodity production in general rather than a
> sub-set of individual commodities. Thus, I conclude that this distinction
> is of no relevance to the issue that Andrew originally wanted us to
> discuss. It is, consequently, invalid for him to introduce this issue into
> his example.

What Andrew proposes is to explore what is the effect of a changing
MELT on those specific kind of commodities, specifically in the way
we should calculate the profit rate. The distinction is then relevant
in so far as the effect are different on those commodities than on
other in which production time = working time.

> Moreover, as Marx points out near the end of Ch. 13: "The turnover cycle
> which we have considered above is *determined by* the durability of the
> *fixed capital* advanced for the process of production. Since the cycle
> extends over a number of years, it comprises a series of annual turnovers
> of *fixed capital* or of turnovers repeated during the year" (Vol II,
> International ed, p. 247, emphasis added).
> Yet, in Andrews example there is no constant capital, let alone fixed
> capital. I conclude that Marxs discussion in this chapter, as interesting
> as it is, is not relevant to the problem that Andrew wants to discuss.
> This is because, in summary:
> a) the distinction between working-time and production-time has importance
> for some individual commodities, rather than for commodity production in
> general.

Sure. Then, it is interesting to consider how a changing MELT affects
the calculation of the profit rate corresponding to those commodities.

> b) the specific character of fixed capital and its turnover is essential
> to understanding this distinction. Yet it, as well as c in general, is
> excluded by assumption.

Probably Jerry is right in this. But, instead of formulating his
criticism from OUTSIDE I propose him to construct an example
in which c is not excluded, there is also fixed capital AND, for some
commodities, working time is not equal to production time. I then
suggest that Jerry consider the effect of a changing MELT on the
whole economy, in particular what happen with the profit rate. I
would like to see his results.

> Despite the above, I would like to see a *separate* discussion on Ch. 13
> (i.e, independent of the issue of how surplus-labour, profit, and the MELT
> are calculated for the capitalist economy as a whole). This is because I
> think this distinction _is_ important for understanding the dynamics
> within some *individual* branches of production. However, this would be a
> discussion related to the micro level of industrial organization and
> agricultural organization rather than to the macro level.

I would also like to see the result of this investigation.


To be frank, I have found Jerry''s intervention in this thread far
from be constructive. Andrew has been proposing a "more concrete corn
model" which is in line with Jerry concernings about "corn models". I
would guess that in this case Jerry have been happy and HELP to
construct an even more concrete example in which more assumptions are
dropped. Instead, Jerry has been "criticising" FROM OUTSIDE, putting
obstacles instead to help to build roads to the understanding of
Marx''s work.

The critique Jerry has been proposing can be summarized in the fact
that Andrew''s example is unrealistic. This kind of critique should
imply also a compromise in constructing a more concrete example but
Jerry is not doing that, only discarding the exercise. This is what I
find unfair.

Alejandro Ramos