[OPE-L:1834] Re: Value of Au

Subject: [OPE-L:1834] Re: Value of Au
From: Duncan K. Foley (foleyd@cepa.newschool.edu)
Date: Sat Dec 04 1999 - 18:21:54 EST

It seems to me that at the level of abstraction Marx usually adopts in
Capital (competition, etc.) the gold producers do make the average rate of
profit. You could introduce rent and monopoly if you like, but they aren't
essential to gold production or the role of gold as the measure of value.


>In Capital, Marx generally assumed that the value
>of money was constant. For example, we could say that
>1 oz of Gold represents 10 hours of abstract labor and
>be consistent with Marx's assumption. If we say that
>the capitalist producing gold spends 10 oz on circulating
>constant capital and negligible amounts for fixed capital
>and wages to produce 13 oz of gold, then his/her rate
>of profit would be (13-10)/10 or 30%.
>Now given that the purchase prices of the means of production
>go up prior to his purchasing them for use in the next period
>to, say, 11 oz, does the amount of labor that 1 oz of
>gold represent change? Note there has been no technical change in
>the gold producing sector. Does the value of gold change due to
>changes in the prices of other commodities? If so, how can
>Marx make the assumption he makes concerning the relation between
>gold and abstract labor as he discusses, say, decreases in the
>prices of other commodities? Is Marx dealing with the exchange
>value of gold or the value of gold?
>If we put this into the usual static framework and, of course,
>assume that the gold producer makes the average rate of profit,
>the above is, at best, a bizarre example. If, on the other hand,
>we treat gold something other than any other commodity, then the
>questions stand. We should note that like other natural monopolists
>the producer of gold would earn "extra profit" in the form of
>rent. Hence, the static solution is less than adequate.
>My own solution to this problem is to adjust the living labor hours
>of abstract labor such that the total labor time to oz. of gold
>remains constant. I'd be interested in how others see this problem.

Duncan K. Foley
Department of Economics
Graduate Faculty
New School University
65 Fifth Avenue
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e-mail: foleyd@cepa.newschool.edu
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