[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

(2S1)

> > = (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

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
\$2).

(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
increase.

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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