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Prof. Foley wrote:
>I don't agree with Mandel on this one.There's no reason to suppose that
the >flow of capital in and out of gold production won't tendentially lead
to the >equalization of the profit rate in gold production to the average
rate of profit, >just as in any other sector. I also don't see why this
would contradict Marx's >theory of money and price.
You don't disagree with Mandel here, actually (see the article mentioned
previously in the book Ricardo, Marx, Sraffa, edited by Alan Freeman and
Ernest Mandel, page 149). I/we evidently should not blur the distinction
between (1) the production of gold as a commodity with its own price of
production, subject to the operation of the law of value (2) gold
functioning as money equivalent within the sphere of circulation (as medium
of exchange), and (3) gold as a store of value (in the last resort).
Mandel sought to explore the relationship between fluctuations in the
general rate of profit, activity in the goldmining sector, and the general
price level. When he talks about the "value" of gold, he refers to "its
intrinsic value, that is the quantity of social labour necessary for its
production, measured in labour-time, and never its purchasing price". He
argues that "This purchasing power can only be deduced from the evolution
of the general price level, which is precisely a relation between the value
of the commodity gold and the average value of all other commodities" (op.
cit., page 275 note 7). I think I would dispute that nowadays though, but I
haven't sorted out my thinking on it properly.
Mandel's article is in part intended to redress an error in his book Late
Capitalism, where he used gold as a 'department III' of production,
confusing gold in general with its minor role as luxury good. It is
likewise intended as a criticism of Von Bortkiewicz's use of gold as the
production of Dept III (postulating unrealistically a fixed value of gold,
and an invariant production price). Von Bortkiewicz's assumption was vital
to his solution to the transformation problem, which as we now know was
wrong. His treatment of gold was previously criticised by Winternitz in
Mandel apparently never regarded the transformation problem as a
substantive "problem" for Marxist economic theory, and did not publish
specifically on it except the mentioned article, inviting the charge of
"Maginot Marxism". In 1960 however he did write "The whole problem of the
transformation of value into price was examined in great detail, with
meticulous calculation, by Natalia Moszkowska in Das Marxsche System: ein
Beitrag zu dessen Aufbau, a book which appeared in 1929 and which attracted
little comment outside Germany." (Marxist Economic Theory, Merlin Press, p.
162n). He said he would discuss Moszkowska's approach critically in a
subsequent edition of Marxist Economic Theory, but he didn't.
I have not read Moszkowska's book, so cannot tell whether Mandel is correct
(as far as I know Moszkowska's book was not translated into English - for
interested readers, her archives are located in Switzerland). Mandel's
later remarks in his Introduction to Volume III or Capital (Penguin
edition) and in the book "Ricardo, Marx, Sraffa" however suggest a solution
which anticipates the Temporal Single System approach, and is similar to
it. Certainly Mandel rejected the transplantation of neo-classical
equilibrium economics into Marxist economic theory, throughout his life.
His point of departure, following Leon Trotsky, was always that the actual
growth process of capitalism is premised on uneven development, and not
accompanied by any effective equalisation of the rate of profit; that it is
essentially driven by the search for surplus-profits.
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