[OPE-L:1967] Re: Value of Au

John Ernst (ernst@pipeline.com)
Mon, 20 Dec 1999 14:02:38


What follows are my comments on your OPE-L1959 although not in the order
you made them.

You wrote:

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.

My comment. I agree. However, I have no idea what you are thinking when
you read sections of CAPITAL where Marx holds the value of money constant.
If the money commodity is simply like any other commodity, it's value changes
as technical changes take place in the production of any other commodity
that directly or indirectly goes into the production of gold. It seems
to me that your "money" generally can't have a constant value. The
constant you envision would seem to be abstract labor itself and not the
value of money.

Basically, according to your interpretation of the value of money, Marx has
no business assuming that it is constant. Indeed, in making that assumption
he contradicts his own notion of value. This would seem, at least, to call
into question the validity of his effort.

You wrote:

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.

My comment: The letter does not make any special reference to the
gold producers. It does refer explicitly to natural monopolies.

Granted there is (was) competition in the gold sector. Does this mean
it is not a monopoly? Is there no rent at all paid to the owners of
those mines or is it all competed away? Given rent, an increase in
the exchange value of the produced means of production used in gold
production would force marginal producers to quit the industry. Must
the value of gold itself then change?

You wrote:

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.

My comment: I don't think we differ on whether or not money must be a
produced commodity. But if, as we read Capital, any commodity could be
money, then we might as well say that the aim of capitalists is

                C(1) - C(2) - C(1)'

where C(1) is the initial means of production used to produce C(2) which
can be exchanged at the end of the process for more C(1) or C(1)'. The
rate of profit becomes [C(1)'-C(1)]/C(1). If we measure the rate of
profit in this fashion, then the irrationality of capitalists disappears.
Afterall what is irrational about trying to create a growing amount of
use values?

The bottom line is that in simple models we can and often do measure
the rate of profit by

(1) [C(1)'-C(1)]/C(1).

Money has nothing to do with this. Nor does labor time. They become
mere frills to dress things up. That Marx's rate of profit, computed
with the assumption that the value of money is constant,

(2) (M'-M)/M,

can fall as the former rate (1) rises is not even a possiblity.



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