Re: [OPE-L] price of production/supply price/value

Date: Mon Mar 06 2006 - 14:35:39 EST

```If anyone on the list experiences a problem sending or receiving
nasty habit of occasionally unsubscribing people and not notifying
me that it took that action. / In solidarity, Jerry

---------- Forwarded message ----------
Date: Mon, 6 Mar 2006 12:37:38 -0500 (EST)
From: Fred Moseley <fmoseley@mtholyoke.edu>
To: OPE-L <OPE-L@SUS.CSUCHICO.EDU>
Subject: Re: [OPE-L] price of production/supply price/value

On Mon, 27 Feb 2006, Ian Wright wrote:

> prices = cost prices + MELT * new labour
> does not define SNLT. It defines prices. How do you define the
> labour-value of a commodity independent of price magnitudes?

Ian, I think I have answered that question in an earlier message in this
thread of discussion.  But let me try again.  Thanks for your patience.

1.  To begin with, the labor-value I am talking about, and I think Marx
was primarily talking about in Volume 1, is the TOTAL labor-value of the
total commodity product produced in the capital economy as a whole.  The
main purpose of Marx's labor theory of value in Volume 1 is to explain the
total surplus-value produced in the capitalist economy as a whole, not to
explain individual prices.  Individual capitals in Volume 1 represent the
total social capital.

2.  This total labor-value of the total commodity product consists of two
parts.  One part is the total CURRENT labor employed in the capitalist
economy as a whole (Lc).  This current labor determines the new-value
component of the total price of commodities (along with the MELT),
according to the equation:

N  =  m Lc

Lc is defined and is assumed to exist independently of N and the total
price.

This is the core assumption of Marx's labor theory of value.  From this
core assumption, the main conclusion of Marx's theory is derived - that
surplus-value is determined by surplus labor, which is a part of current
labor:

S  =  N  -  V

=  m L  -  m Ln  =  m Ls

3.  The other component of the total labor-value of commodities is PAST
labor (Lp), which is less straight-forward and more controversial.  This
component is also less important, since the quantity of past labor has no
effect on the quantity of surplus labor, and hence no effect on the
quantity of surplus-value produced.

There are two possible interpretations of the past labor component of the
total labor-value of commodities:

(1)  The TRADITIONAL interpretation, according to which past labor is the
labor-time required to produce the means of production (Lmp).  According
to this interpretation, Lmp determines the "transferred value" component
(T) of the direct price of commodities, in the same way that current labor
determines the new value component, as discussed above; i.e.

T  =  m Lmp

In reality, however, the actual transferred value component of the total
price of commodities in the real capitalist economy is NOT proportional to
Lmp, but is instead equal to the actual constant capital advanced to
purchase the means of production, which is equal to the price of
production of the mp (PPmp); i.e.

T  =  C  =  PPmp        not = m Lmp

Therefore, according to the traditional interpretation, the transferred
value component of the direct price of commodities is NOT equal to the
ACTUAL transferred value component in the real capitalist economy, but is
instead equal to a HYPOTHETICAL transferred value, which later has to be
"transformed" into the actual transferred value.

And of course it follows from this traditional interpretation that the two
aggregate equalities cannot in general be satisfied simultaneously.

(2)  Secondly, there exists an alternative interpretation of the past
labor component of the total labor-value of commodities, which I have been
presenting, and which is based on the earlier work of Mage, Yaffe,
Carchedi, and Mattick, Jr, and which is similar in this respect to TSS and
to Wolff-Roberts-Callari.  According to this alternative interpretation,
the past labor component of the total labor-value of commodities is
derived from the actual constant capital advanced to purchase the means of
production in the real capitalist economy, which is equal to the price of
production of the mp, and not equal to the direct price of the mp.
Algebraically:

Lp  =   C / m   =   PPmp / m

In general, Lp is not =  to Lmp, because PPmp is not = m Lmp.  However,
this difference between Lp and Lmp has no effect of the magnitude of
surplus labor, nor hence on the magnitude of surplus-value.  Surplus labor
is the difference between current labor and necessary labor, and is
independent of the past labor component.

The reason for this difference in the determination of Lp (compared to Lc)
is that the means of production have already been purchased and sold in
the real capitalist economy, at prices equal to their prices of
production.  Therefore, the labor-time required to produce the mp (Lmp)
has already been objectively represented by this price, the price of
production of the mp, which is equal to the actual constant capital
advanced to purchase the mp.  Even though the PPmp is not proportional to
Lmp, and thus PPmp is not an accurate of Lmp, PPmp (= C) is nonetheless
the actual transferred value component of the total price of commodities
in the real capitalist economy, not the "direct price" of the mp.
Therefore, the effective past labor that becomes one component of the
labor-value of commodities is the one derived from the given C, as above.

It follows from this alternative interpretation that Marx's theory of
prices of production is not "incomplete", and that the two aggregate
equalities are always true.

Lmp continues to play an important role in Marx's theory, even though the
transferred value component is not proportional to it.  As Marx explains
in Volume 3, even though Lmp is not the only determinant of PPmp, it is
the main determinant, along with the equalization of the profit rate (and
hence C/V in the mp sector) as a secondary cause.

4.  I acknowledge that there is textual evidence to support the
traditional interpretation of the past labor component of the total
labor-value of commodities.  However, I also argue that there is at least
as much textual evidence to support this alternative interpretation, which
I have presented in a number of papers.  Therefore, in the choice between
these two possible interpretations, why not prefer the one that makes
Marx's theory a logically consistent whole, and in which the two aggregate
equalities are always true, as opposed to the traditional interpretation
that makes Marx's theory a logically contradictory mess, and the two
aggregate equalities are in general  not satisfied simultaneously.