# [OPE-L:3684] Re: Re: textual evidence

From: Rakesh Bhandari (bhandari@Princeton.EDU)
Date: Wed Aug 16 2000 - 13:08:58 EDT

My goodness, Fred in the following passage you left out the exact words
which had me call it decisive textual evidence: I shall put it in capitals
with double spacing between the words

>"It is quite possible, accordingly for the cost price to diverge from the
>VALUE SUM OF THE ELEMENTS of which this component of the price of
>production is composed, even in the case of commodities produced with
>capitals of average composition. [Let us asssume that the average
>composition is 80c + 20v. It is possible now that, for the actual
>individual capitals that are composed in this way, the 80c may be greater
>or less than the value of C, since this C , T H E C O N S T A N T C A
>P I T A L, is composed of commodities whose
>prices of production are different from their values."] (C. III: 209)
>>But, Rakesh, the 80c IS ITSELF THE CONSTANT CAPITAL, as one part of the
>cost price, which is defined in terms of money. This 80c is referred to as
>constant capital repeatedly in Parts 1 and 2 of Volume 3.

So Fred, constant capital is not so defined here. Constant capital is
defined as the value of the means of production consumed in the commodity.
So at the very least we have two constant capitals: one as a component of
cost price (80c) and the other as value of means of production consumed in
a commodity (the value of C, this c, the constant capital).

Also please note that the quote is from Capital III, p. 309, not 209.

I can respond quickly to most of the rest of the message because I think I
anticipated it in one of my last of my 5000 messages to the list.

Let's say I accept that constant capital is money laid out to buy the means
of production. But what determines the value which workers will transfer
from the means of production? The money price paid for them, constant
capital as you define it? Or the value of the means of production consumed
in a commodity, as Marx clearly says in Vol 3.

So what I am saying changes from vol 1 to vol 3 is the assumption that the
value which is transferred from the means of production is the money price
paid for them, which is constant capital as you define it.

This means that cost price no longer has the double significance Marx
claims--that is, the money paid for the means of production is no longer
both a component of cost price and the value which will be transferred from
the means of production.

>again at Chapter 1 of Volume 3, where Marx introduced and defined the
>concept of cost price (which you have emphasized in other posts). Here the
>cost price is clearly and explicitly defined as the sum of constant capital
>and variable capital, all of which are expressed repeatedly in terms of money.

I agree that there is no change to the definition of cost price; it remains
the money sums laid out for means of production and the hiring of workers.

>Furthermore, the composition of capital is defined as the relative
>proportion of constant capital and variable capital, right? Well, the
>average composition of capital is expressed in your first sentence as 80c +
>20v. Therefore, the 80c must be the constant capital. If 80c is not the
>constant capital, then what is it? And why is the average composition of
>capital expressed in terms of it?

80c is the money laid out to buy the means of production, but the value
which will be transferred from these means is not given by the money price
paid for them. Is not Marx clear here that Marx now defines constant
capital as the value of the means of production consumed in an economy, not
the money price paid for them, which is what in this example the 80c is, as
you rightly insist.

>Now, if constant capital also means something besides 80c in the same
>sentence (the value of the means of production), then Marx would be
>extraordinarily confused. He would be saying in effect that the constant
>capital may be greater or less than the constant capital.

This is exactly what he is saying because we do indeed at this point in the
presentation have two constant capitals--constant capital as the money laid
out for means of production which enters into the cost price and constant
capital as the value of the means of production consumed in a commodity.
This is exactly what happens when Marx finally drops the value=price
assumption.

I don't think
>Marx was that confused. I think what Marx meant to say (following the
>first sentence) is that the constant capital 80c is different from the
>value of the ELEMENTS of constant capital (i.e. the value of means of
>production), which is of course generally the case.

Yes we both agree here. Where we differ is in what is transferred to the
commodity--the money price paid for the means of production or the value of
the means of production consumed in a commodity. In the initial tableau
Marx assumed that they were the same; he is now saying that he has to drop
the assumption.

Now you quote another passage below which for many seems to set the problem
that Sraffa's standard industry solved. And do note that Marx is now
changing topics. He had been discussing price value divergence on both the
input and output side. Now he is saying that this whole discussion does not
affect the critique of adding up theories of value. Let us not forget, he
seems to be saying, that total value is defined independently and before
the wage/profit split.

He returns to this point here so that this essential point will not be lost
among the fine points he is making about price-value divergences.

So now to the tricky quote:

>This interpretation is further supported by the next paragraph after the
>one quoted by Rakesh, which is extremely interesting. Here Marx said:
>
>"Yet this possibility in no way affects the correctness of the principles
>put forward for commodities of average composition. the quantity of profit
>that falls to the share of these commodities is equal to the quantity of
>surplus-value contained in them. For the above capital, with its
>composition of capital of 80c + 20v, for example, THE IMPORTANT THING AS
>FAR AS THE DETERMINATION OF SURPLUS-VALUE IS CONCERNED IS NOT WHETHER THESE
>FIGURES ARE THE EXPRESSION OF ACTUAL VALUES, BUT RATHER WHAT THEIR MUTUAL
>RELATIONSHIP IS; i.e. that v is one-fifth of the total capital and c is
>four-fifths. As soon as this is the case, as assumed above, the
>surplus-value v produced is equal to the average profit, the price of
>production = cost price + profit = k + p = k + s, which is equal in
>practice to the commodity's value."

For this to be true, Marx must assume that the average industry not only is
average in composition but that price paid for the means of production
equalled the value of those means of production consumed in the output
(that is, that this average industry meets the hoary Vol 1 assumption that
the price paid for the means of production equals the value of those means
as consumed in the commodity).

Then and only then will the change in this average industry's profit rate
brought about by a change in wages apply to the economy as a whole.

If we think it is fantastic to entertain such an industry, there is no
simply no reason to construct one.

The point that the total value produced does not change with a shift in the
balance of wages and profits--however much relative prices may change
thereby--can be made independently of reference a standard or average
industry which only serves illustrative purposes. And it is not a point to
be forgotten when Marx recognizes the need to transform the inputs--not
from values to prices (here I agree with Fred) but from prices to values.

All the best, Rakesh

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