# [OPE-L:3603] Re: Re: Re: Re: Re: constant capital and variable capital

From: Rakesh Bhandari (bhandari@Princeton.EDU)
Date: Sat Aug 05 2000 - 11:24:36 EDT

In trying to make sense of Marx's point that we should not confuse the
price of production of the inputs from the value (paid and unpaid labor)
they actually represent and thus will transfer to the value of the final
product, I simply devised the example below.

This allows for the price paid for the means of production to differ from
their value, as determined the paid and unpaid labor time they actually
represent and transfer to the commodity output.

The cost price column refers to the money investment the capitalist
acutally makes, i.e., he buys \$MP and invests so much in variable capital.
value is simply c+v+sv

>> \$MP C V SV costprice value pp
>> 80 70 20 20 100 110 124
>> 60 70 30 30 90 130 112
>> 90 85 15 15 105 115 131
>> 50 55 25 25 75 105 93
>> _______________________________________
>> 280 280 90 90 370 460 460
>>
>> Rate of profit is 24%.
>>
>> So in the first and third branches the price of production of the mp used
>> is greater than their value. And visa versa in branches two and four. That
>> is,
>> c+v<cost price in branches one and three and visa versa in branches two and
>> four.
>>
>> That is, the above table provides in the C column the correction for which
>> Marx is here calling:

Ajit responds:

>________________________
>
>Rakesh, may be I'm too tired right now. But I have absolutely no idea what
>are you

How did you calculate
>your c and v and what are their units?

C is calculated in the labor time units for which you were calling. This
allows us to see a transformation when price of the production of the
inputs is not simply assumed to be their value.

Like \$MP, V is simply in money units--the money which a capitalist invests
in productive labor power. I am assuming that for each unit of v invested
one labor person is hired who is then exploited at the rate of 100%. It is
of course possible that if labor power is pushed below (or above) its
value, then the rate of surplus value would increase (or decrease) and the
SV column would have to be changed.

Fred may then argue that this example suffers from the contradiction of
transforming \$MP into the value category of C (constant capital) while
making no allowance for a distinction between the money price of labor
power and the value of labor power.

But this seems to be no contradiction to me. With his money invesment in
means of production, the capitalist is actually buying inputs at prices of
production which are more or less than their actual value (the paid and
unpaid labor they actually embody).

With his money investment in variable capital, the capitalist is not buying
commodities whose value may differ from their prices of production due to
the equalisation of the profit rate, so the correction for which Marx is
specifically calling is not needed. Again remember the quote which I am
trying to make sense of.

Of course labor power may be sold below (or above) its value, but the
correction for which this calls is not in the money sum invested as
variable capital but a rise (decline) in the rate of surplus and in the
example above an increase (decrease) of the numbers appearing in the SV and
thus the value and pp columns.

I hope this makes more sense. If not, I'll try again later.

All the best, Rakesh

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