From: Andrew Brown (Andrew@lubs.leeds.ac.uk)
Date: Mon Nov 11 2002 - 09:16:46 EST
Hi Fred, I think I am now a step closer to grasping your interpretation. My own interpretation, unlike yours, is not in the public domain (except in the form of my PhD) and so need not detain us too much at this stage. Though I draw from Alfredo's interpretation obviously I can't speak for him. > > As I understand Alfredo's interpretation (Alfredo, please correct me > if I am wrong), the inputs of constant capital and variable capital > are assumed to be equal to the VALUES of the means of production and > the means of subsistence (the ratio between these two are his > interpretation of the OCC). I can't speak for Alfredo, but for what it is worth I think your interpretation here is not quite right, or at least unduly truncated, owing to the nuances surrounding the TCC/VCC/OCC distinctions (as you will see from my posts regarding these distinctions). You pick up on this in another post to which I'll reply later. Therefore, according to his > interpretation, the prices of production determined by Marx in Chapter > 9 are not actual long-run center-of-gravity prices, but are instead > only the first step in the determination of such long-run > center-of-gravity prices. Subsequent steps would involve the > transformation of the inputs of constant capital and variable capital > from values into prices of production, which would eventually > determine long-run center-of-gravity prices. There is certainly a two step procedure (as I understand it) but I think it better to say that the concept of price of production is 'modified' or developed from one step through to the next. By the second step, then prices of production do correspond to Smith's 'natural prices' and the like. Once more I can't speak for Alfredo but only for myself. In the end, the > determination of these long-run center-of-gravity prices is exactly > the same as in the Sraffian interpretation (see Alfredo's equation > (8.3) on p. 98). Thus, Alfredo's interpretation is similar to the > "iterative solution" of Shaikh and others. On my view we do indeed end up with the Sraffian calculation. I haven't studied Shaikh's 'iterative solution'. > However, Marx said many times that his prices of production are > long-run center-of-gravity prices, essentially the same as Smith's and > Ricardo's "natural prices". I have written a paper documenting these > many passages ("Marx's Concept of Prices of Production as Long-run > Center-of-Gravity Prices") available on my website > (www.mtholyoke.edu/~fmoseley). Yes Marx certainly said all this but see above re the 'modification' of this notion. > > In addition, Alfredo's determination of prices of production is only a > partial distribution of surplus-value. In the subsequant > transfromation of input prices, the distribution of surplus-value will > be altered further. And, most importantly, the distribution of > surplus-value will be altered in such a way as to change the total > magnitude of surplus-value. In other words, the total profit > distributed in Volume 3 will not be equal to the total surplus-value > determined in Volume 1. This result contradicts the key aspect of > Marx's logical method, according to which the distribution of > surplus-value does not alter the total magnitude of surplus-value > "ever". On my view it is true that the external measure of surplus value diverges from the immanent measure. That is, once the inputs are transformed, aggregate money profits are not proportional to aggregate surplus labour time (nor, therefore to the aggregate magnitude of surplus value prior to transforming the inputs). Whether this contradicts Marx's own method is a matter upon which we disagree. > But money and prices are derived in Chapter 1 of Volume 1, and prices > are assumed to be proportional to labor-time, which applies to the > aggregate level. The theory of surplus-value presented in Chapter 7 > explains how the PRICE of commodities produced is greater than the > costs of production (also in terms of money and prices). In the > example in Chapter 7 in terms of the average worker, surplus-value is > 3 SHILLINGS, which is determined by the product of the number of hours > of surplus labor (6 hours) and the money new-value produced per hour > (0.5 shillings per hour) - i.e. surplus-value is proportional to > surplus labor. > > Andy, how do you interpret the theory of surplus-value presented in > Chapter 7? I have a ch. in my PhD on this. The main point is that Marx's ch.7 does not, in my view, *rest* on the assumption that labour times are propotional to prices, either individually or in the aggregate. He does *make* this assumption but purely for convenience. It is innocuous such that all Marx's key conclusions remain, indeed are further substantiated, once price determination is grasped, and the assumption is dropped. What Marx's view *does* entail is the view that there is a systematic relationship between labour times and prices. But a systematic relationship need not be a proportional one. > > Does this mean that, on your interpretation, the key to Marx's view > > is this *assumption* (or could I also call it a 'hypothesis'?) of > > proportionality between the appearance form of surplus value (its > > money measure) and its substance (surplus labour time)? Or more > > precisely, the key is the assumption you state above which, via the > > structure of givens you have clarified for me in your previous > > email, leads to proportionality between the substance and appearance > > form of surplus value. Does this mean, furthermore, that the way to > > evaluate Marx's argument, on your view, is via 'testing' the > > empirical predictions (to put it crudely) that arise from this > > fundamental assumption? What I have in mind is your discussion with > > Blaug, Steedman and others in the methodology collection that you > > edited and contributed to. Is your view that all theories make some > > or other 'assumptions' which form a 'hard core', to use Lakatos' > > terminology, a hard core not directly to be tested but rather to be > > evaluated in terms of the propositions in the 'protective belt' (to > > borrow again Lakatos' terminology for the sake of clarity)? > > > > This is a separate issue from Marx's method of determination of the > total surplus-value in Volume 1 and Volume 3. Fred, I don't think that it can possibly be a separate issue. Or at least, my own interpretation of Marx's method would highlight the question of the nature and status of 'basic assumptions' or 'hypotheses' to theory construction. I do not think Marx approached this in the same way as you do and *therefore* I do not agree with your interpretation of his treatment of total surplus value in Vol 1 and 3. > > But, yes, your description of my understanding of the appropriate way > to evaluate the validity of Marx's theory is essentially correct. > Marx's labor theory of value and surplus labor theory of surplus-value > cannot be empirically tested directly because abstract labor is > unobservable. The way to test the theory is by means of the > conclusions that are derived from this theory: the necessity of money, > conflict over the length of the working day and over the intensity of > labor, inherent technological change, etc. > > I am not sure that I would accept Lakatos' framework, but that is > secondary. > Just to clarify one point: of course it is important to evaluate abstract theory via more concrete evidence; this is a vital procedure. But in my view that is not the only or even the main way in which one must appraise abstract theory. Rather, one can appraise it *directly* by asking if the claims to necessary relations that it makes are valid. This in turn entails that necessary relations are objective. > The rest of Volume 3 is very important. It shows that Marx > consistently follows his logical method of taking the total > surplus-value as given, as determined in Volume 1 (i.e. proportional > to surplus labor), and that this total surplus-value does not change > as a result of the distribution of surplus-value (as I have documented > in my two papers referred to in my last post). Your (and Alfredo's) > interpretation of Part 2 contradicts this aspect of Marx's method, > both in Part 2 and in the rest of the volume. > As I said, I cannot comment since I haven't read it in detail. As regards the cites in your papers, then they are all consonant with the view that the key quantitative proposition is not that of *proportionality* of prices to labour times, rather it is of a *systematic relationship* between prices and labour times. It is true that, at face value, these cites are more supportive of your view than mine, since they stress proportionality. Though, to the extent that these cites are at the level of the OCC then they also support my view (my view entails proportionality at the level of the OCC). Furthermore, the natural thing to do is to work at the level of the OCC, since the level of the VCC obscures the underlying processes. > Marx's conclusion that surplus-value is proportional to surplus labor > is not merely "one of convenience" that can be dropped without any > effect on the theory. This determination of surplus-value provides > the basic quantitative premise for the theory of the distribution of > surplus-value in Volume 3. > Well, the basic quantitative and qualitative premise is provided by Volume 1, and we have different interpretations of Volume 1. > > Andy, how do you think Marx "established" in Volume 3 (Part 2) that > the proportionality between surplus-value and surplus labor obtains > "when working at the level of of OCC"? As I understand Alfredo's > interpretation, at the "level of the OCC" in Volume 3, surplus-value > is taken as given, as determined in Volume 1, i.e. as proportional to > surplus labor (please see Alfredo's table on p. 85). In other words, > his interpretation assumes that the proportionality betwen > surplus-value and surplus labor holds in Volume 1, and then the > surplus-value thus determined in Volume 1 is used to determined the > INITIAL general rate of profit (= S / C+V) and the INITIAL prices of > production in Volume 3, at the level of the OCC. The proportionality > between surplus-value and surplus labor is not established in Volume > 3, but is rather assumed, as determined in Volume 1. The question you ask me is too complex to be fruitfully answered without reference to my chapters devoted to this issue. But the main points are as follows: Vol 1 shows that labour is essence, and price is appearance. This is a qualitative necessary relationship. This necessary relationship entails that there *must* be a systematic quantitative relationship between labour times and prices. However, Vol 1 does not show *how* this quantitative relationship is enforced; it does not reveal the social process whereby labour time magnitudes are connected to price magnitudes (so it does not, in this sense, 'establish' proportionality or any other relationship). It is Vol 3 that shows *how* labour time magnitudes are related to price magnitudes (the key mechanism, i.e. social process, being the competition between capitals). The quantitative key is *not* the *proportionality* of aggregate or individual values to prices. Rather, it is that Vol 3 shows how competition enforces a *systematic relationship* between labour time magnitudes and price magnitudes. Regarding Alfredo's view: I interpret Alfredo's position differently to your interpretation of it. The key question here is what does it mean for something to be taken 'as given'. I think you incorrectly project your own notion of 'givens' to Alfredo. But that's just my opinion. Many thanks Fred, now I will go away and try to think through your own view having, thanks to this exchange, gained a better idea of what that view is. Andy PS Your own view is presented as an interpretation of Marx, hence I have couched my remarks accordingly. But I would like to make clear that my main concern, like yours and everyone elses, is with grasping and changing reality rather than with 'what Marx really meant'.
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