[OPE-L:1908] Re: value-form theories

Subject: [OPE-L:1908] Re: value-form theories
From: Gerald Levy (glevy@PRATT.EDU)
Date: Sun Dec 12 1999 - 11:23:57 EST

Re Fred's [OPE-L:1903]:

> > In the last page cited in the subject index there is a brief discussion
> > of *ideal surplus value* (and *ideal profit*). The presentation starts
> > with the following:
> > "Accumulation of capital generates an increasing amount of ideal
> > surplus value s, defined as s


> > = (m-w)I (where m is the ideal
> > money expression of labour, w the wage rate and I social
> > aggregate labour

cf. 2$16 (I will use $ as a substitute for a character that doesn't
appear on the keyboard. JL).

> > ). The term 'ideal' refers to as yet
> > unvalidated entities"

- 1$8). (104)

> > This will remind many listmembers of a discussion that we had some
> > time back (Spring, 1998 ?) on "ideal value".

Correction: that thread was discussed in March-June, 1997.

> I am not sure exactly what is meant by "ideal" prices and "ideal" profit.
> I hope to review R-W's book and the OPEL archives soon on this point. How
> do these "ideal" prices and profit differ from actual (or equilibrium)
> prices and profit?
> I have a few questions about R-W's equation: S = (m-w) L.
> (I substitute L for I in Jerry's equation because it stands for social
> aggregate labor.)

Keeping in mind what I just wrote in another post, I'll let R&W speak for
themselves by continuing-on with the excerpt above. Hopefully, that will
answer some of your questions (and, undoubtably, lead to new ones!).

The quote above is in Section One ("The tendency to over-accumulation of
capital") in Chapter Three ("The tendency of over-accumulation of capital:
labour-shortage profit squeeze and underconsumption"). The first part of
this section (1) is titled "Accumulation, the tendency for the rate of
surplus value to rise and the validation of extended production". It
begins as follows (this is the paragraph before the excerpt above):

         "From the valorisation of capital has been derived its its
          extended valorisation and accumulation (2S1), grounded most
          abstractly in the credit system (2S2), and then in the extended
          reproduction of labour power (2S3). The following propositions
          are entailed by the presentation so far:"

The excerpt above is preceded by "(1)". Then R-W continue:

         "(2) Accumulation of capital, and the technical change
          concomitant on it, tend to give rise to increasing intensity and
          productivity of labour (2S1). Concomitantly the *rate* of ideal
          surplus value [s' = (m-w)/w] tends to increase. Abundant labour
          reserve is a condition of existence of this tendency (cf 2S3).
          (Labour scarcity, conversely, counteracts this tendency - see

          (3) The notion of accumulation of capital and technical change
          derived so far - does not entail a particular change one way or
          the other in the value composition of capital. [The value
          composition of capital (B) is defined as the ratio of the value
          of means of production (K) and the wage sum (wl), so B = K/wl.]
          For purely pragmatic reasons we assume the value composition of
          capital (insofar as it is determined by the technical
          composition and not by distribution) constant here (Chapters
          4-5 deal with changes in the technical and value composition).

         (4) From propositions 1-3 above, it follows that the rate of
         ideal profit, r (defined as ideal surplus value produced, s, over
         capital accumulated, K + wl, so r = s/(K+wl)) tends to

           From these, the following propositions may be developed:

         (5) If all wages are consumed and if all realised surplus value,
          s, is accumulated, z (so s = z) then the validation or
          realisation of all production (so that ml = ML [in the book ML
          are lower-case but *bold*. I will use this also as I continue.,
          JL] - 2$16) would require the intended accumulation of all ideal
          surplus value s = z, so that r would then be equal to z/(K+WL).

         (6) The social validation of extended production concomitant on
          accumulation would then require the equality of rate of profit
          and rate of accumulation [defined as z' = z/(K + WL), so r =
          z']. Given proposition 4, this would require an *increasing
          rate of accumulation*.

         (7) Such a rate of accumulation would again require a
         concomitant rate of integration of labour power over time, l',
         into the circuit of capital, so that once any unemployed labour
         is absorbed, the rate of growth of the labour force N', must be
         greater than or equal to that rate of integration of labour
         power, so that z' = l' less than or = to N'.

         In the way propositions 5-7 have been formulated, they are of
         course analytical, merely serving as a frame of reference for
         the account of the tendency to the over accumulation of capital
         in $2, and its expressions presented in $$3-4. Proposition 5, the
         validity of production ml = ML and its requirement that over time
         s = z is of course very stringent. The reproduction of
         association through the value-form does not require this
         equality, but it does require that some level of validation be
         anticipated. In general, if we define production as X = oK + ML
         (where o is the rate of depreciation) production validated X
         (bold in book, JL) and thence ml is determined by expectations
         (cf. Keynes 1936: ch. 12) for which the development of the
         realised rate of profit itself is a major determinant." (Ibid,
         pp. 104-105)

My hands, wrists, and back are getting sore!

In solidarity, Jerry

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