# Re: [OPE-L] monetary macro interpretation

From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Sun May 28 2006 - 16:49:59 EDT

```In my last post, I asked Rakesh:

> > Rakesh, how do you determine the quantity of the total surplus-value?

And Rakesh replied:

> That would just be the M', less the M in the economy as a whole.

In other words:  S  =  dM  =  M' - M

But this is just a definition of surplus-value, not a theory of
determination.  In order to have a theory of determination of the total
surplus-value, one must have a theory of M' and M.  Marx initially took M
(= C + V) as given (later explained), and assumed the following theory of
M' and dM:

M'  =  C  +  N  =  C + m Lc

dM  =  (C  +  m Lc )  -  (C + V)

=  m (Lc - Ln)  =  m Ls

All these variables are aggregate magnitudes.

Rakesh, do you agree or disagree that this is Marx's theory of the total
surplus-value?

Then, Marx's theory of prices of production in Volume 3 is summarized by
the following:

1.  Assume a given total surplus-value , as determined by the prior
aggregate analysis..

2.  Determine the general or average rate of profit, as the ratio of the
(predetermined) total surplus-value to the total capital advanced.

R  =  S / (C + V)  =  dM / M

3.  Determine the price of production of each industry as the product of
the general rate of profit (as determined above) and the capital advanced
in each industry:

PPi  =  (Ci + Vi) (1 + R)

This determination of prices of production seems to be missing in Lexis.
But maybe he figured it out.  After all, it is not that hard.  As Marx
said, while working on the details of his theory of prices of production
for the first time in the Manuscript of 1861-63:

"The matter is itself extraordinarily simple."  [!]  (TSV.II. 181)

Unfortunately, a century of misinterpretations of Marx's theory has made
the matter much more complicated and difficult than it actually is.
Engels exaggerated the difficulty with his "contest".  I guess in order to
show Marx's superiority.  But Marx's superiority is his logical method -
the prior determination of the total surplus-value and the general rate of
profit.  Once this is seen, the theory of prices of production is easy.

It would be very interesting to obtain a copy of Lexis' article and see
all of what he said.  I wonder if there is any algebra?

Rakesh, do you agree or disagree with this interpretation of Marx's theory
of the general rate of profit and prices of production, which is
consistent with, and indeed follows from, Lexis' emphasis on the prior
determination of the total surplus-value?

It follows from Marx's theory summarized above that the total
surplus-value does not change as a result of the determination of prices
of production; i.e. total profit = total surplus-value.  The total amount
of surplus-value produced by the collective worker is not altered by the
distribution of this total amount to individual capitalists.  As Lexis put
it (quoted by Engels, p. 99):  "But since the losses and gains in
surplus-value cancel one another out within the capitalist class, the
overall amount of surplus-value is the same as if prices are equal to
values."

Nor does the total price change as a result of the determination of prices
of production; i.e. total price of production = total value.  Both of
these aggregate equalities follow simply and straightforwardly from Marx's
logical method.  These two aggregate equalities are not conditional
equalities, that may or may not be true, depending on the compositions of
capital of individual industries (as in the standard interpretation of
Marx's theory), but are instead identities, that are always true, by
assumption, or by the nature of Marx's logical method - the determination
of the total surplus-value prior to its distribution.

Rakesh, the method of determination of the total surplus-value and the
general rate of profit and prices of production summarized above is
different from Shaikh's interpretation, which does not determine the
general rate of profit from a predetermined total surplus-value, prior to
prices of production, but instead determines the general rate of profit
simultaneously with prices of production, and the total surplus-value
plays no role whatsoever in the theory (as in the Sraffian interpretation
of Marx's theory).  And the total surplus-value changes as a result of the
determination of prices of production; i.e. total profit is not equal to
total surplus-value.

In the past, you have said that you agreed with Shaikh's interpretation.
Are you rethinking that, given your current emphasis on the production of
the total surplus-value by the collective workers prior to its
distribution among individual capitals?

In my last post, I asked Rakesh further:

> > What are the equations?
[that express his interpretation of the determination
of the total surplus-value]
> >
> > Are they any different from my equations above?  If so, how?
> > If not, then what is the siginficance of the difference you are getting
> > at?

And Rakesh replied:

> I am hoping that Chris Arthur deepens the conversation since
> I think he knows what I am getting at. But let me save my answer
> for now, though I am getting at the reality of a class
> subject against the bourgeois ontological commitment to the reality of
> concrete individuals alone.
> Marxist philosophy needs to take an ontological turn and enquire into
> the nature
> of being! Too much epistemology, methodenstreit.