[OPE-L:1959] Re: Re: Value of Au

Duncan K. Foley (foleyd@cepa.newschool.edu)
Sun, 19 Dec 1999 16:04:00 -0500

I don't understand the third and fourth paragraphs of John's post very
well. As I read the development of the money form in the first three
chapters of Capital, it is true that any commodity could potentially
function as money, though there are good historical and practical reasons
for the money form fixing on the precious metals. Anyway, I don't think
Marx thought there was anything special about the money commodity as a
produced commodity. The issue of capitalism as the (irrational) pursuit of
surplus value doesn't turn on the commodity nature of money, not does the
fact that the money commodity is produced like any other commodity render
the pursuit of surplus value a pursuit of pure accumulation of use-values.

I don't agree that gold producers are natural monopolists, since
historically it's been a quite competitive sector (cf gold rushes of
various dates and in various places). I'm not familiar with the letter John
quotes, so I can't comment on whether or not it supports his claim that
Marx explicitly excludes them from the "transformation" procedure.

It is true that Marx typically takes the value of money in the sense of the
monetary expression of labor time to be constant in his examples, but he
clearly understands, as did Ricardo, that the value of gold varied just as
the values of other commodities, with technical change and other factors.


>In OPE-L 1834, Duncan wrote:
>"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."
>John writes:
>First, I think we can agree that gold producers are natural monopolists.
>If so, Marx specifically excluded them in his transformation procedure.
>Hence, I do not see these producers earning the average rate of profit.
>(Letter to Engels, 04/30/1868)
>More important is how we read other sections of Marx's work. In it, as
>I said in my post, the value of gold is generally assumed constant. If
>we hold fast to the idea that gold producers earn the average rate of
>profit, then the exchange value of gold would change with every change
>in the exchange value of the commodities consumed as constant capital
>in its production. If the changes in the exchange values of the other
>commodities are due to changes in their values, directly or indirectly,
>then gold like the other commodities would experience a change in its
>value with changes in the exchange value and value of its inputs. If
>the value of gold is constant, how do we speak of technical change and
>consequent changes in value? Clearly, in general, gold's value can't be
>constant. Yet, in Marx, it is -- by assumption.
>Now if we follow this path, then in order to examine the process of
>production and reproduction we find ourselves referring to abstract
>labor itself as the measure of value. Relative values are
>the best we can do when it comes to looking at exchange values. Money
>prices are no longer part of the analysis since any old commodity might be
>money. M - C - M' becomes C(1) - C(2) - C(1)' where C(1) may or may
>not be the same as C(2) and C(1)' > C(1). The accumulation process
>itself becomes the accumulation of commodities and can be seen as an
>increase in use-values. That M - C - M' where M' < M may exist as
>C(1) - C(2) - C(1)' occurs where C(1)'> C(1) is not considered. As
>we measure things by changes in quantities of use values, even abstract
>labor itself disappears or becomes "redundant."
>The capitalists become mere wealth producers with the struggling workers
>doing little more than grubbing for more use values. To fight
>against the grubbing workers, capitalists may have to invest in
>such a way that the rate of increase in use values as outputs falls
>relative to the rate of increase in use values as inputs. The
>Ricardian image of the accumulation process takes on a more modern
>form as strange and generally unseen capital-using techniques (Rube
>Goldberg again) replace Ricardo's notion of decreases in the marginal
>product of the agricultural sector. Money as something other than
>another commodity remains meaningless as Marx is transformed into
>Ricardo. This is the accomplishment of what David Laibman calls
>"20th Century Marxism."

Duncan K. Foley
Department of Economics
Graduate Faculty
New School University
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New York, NY 10003
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