**From:** ajit sinha (*sinha_a99@YAHOO.COM*)

**Date:** Thu Mar 15 2007 - 13:38:11 EDT

**Next message:**Jurriaan Bendien: "[OPE-L] the point of a dynamic model?"**Previous message:**B.R.Bapuji: "Re: [OPE-L] interpretations of capital and Marx"**In reply to:**Pen-L Fred Moseley: "Re: [OPE-L] questions on the interpretation of labour values"**Next in thread:**Pen-L Fred Moseley: "Re: [OPE-L] questions on the interpretation of labour values"**Reply:**Pen-L Fred Moseley: "Re: [OPE-L] questions on the interpretation of labour values"**Messages sorted by:**[ date ] [ thread ] [ subject ] [ author ] [ attachment ]

--- Pen-L Fred Moseley <fmoseley@MTHOLYOKE.EDU> wrote: Ajit: > > For a very simple reason. You say, you take "money > > constant and variable capital as given". So let's > see > > what could this mean. Say a capitalist begins with > an > > amount of money equal to 50 pounds of silver. What > > does he do with this 50 pounds of silver? You say > he > > buys constant capital and variable capital with > it. > > Let us say this capitalist is engaged in > production of > > a commodity X. To produce this commodity X, the > > capitalist needs to buy commodity Y and Z as > constant > > capital and Labor-power L. If the technology > available > > for the production of X is not the usual > neoclassical > > one but the Leontieff type, then these Y, Z, and L > > must be bought in a given proportion. So let us > > suppose that to produce 1 unit of X, it takes 2 > units > > of Y and 3 units of Z with 1 unit of L. Let us > suppose > > that the price of Y is 4 pounds of silver, the > price > > of Z is 5 pounds of silver, and the wage per unit > of L > > is 6 pounds of silver. Thus the capitalist will > spend > > 29 pounds of silver to be able to buy enough > constant > > and variable capital to produce 1 unit of X. If > there > > is no chance of divisibility of commodites below 1 > > unit, then this capitalist is simply unable to > > productively invest the rest of his 21 pounds of > > silver. Even if you assume perfect divisibility, > the > > capitalist in no way will be able to invest his > full > > 50 pounds for constant and variable capital. So > what > > would it mean to say that the capitalist begins > with a > > capital in terms of money? This was only to > highlight > > the flimsyness of such statements that capitalist > > start with a GIVEN money. Acually what you have to > do > > is to start with an input output structure with > KNOWN > > prices and wages, and then calculate your total > amount > > of money investment, which you then call given > money > > investment. Any way, this is not my main > criticism. > > Let's suppose you are lucky, prices of Y, Z and L > > happens to be such that your capitalist could > invest > > your so-called given 50 pounds of silver > completely. > > So, how much is the constant capital investment? > You > > say we add the amount of Y and Z bought by the > > capitalist multiplied by their respective prices. > So > > you cannot get a money measure of contant capital > > without knowing the prices of the elements of the > > constant capital. ___________________ Fred: Yes, you can. You can “get a money measure of constant capital” (and also variable capital) from EMPIRICAL OBSERVATIONS (as long-period averages). Capitalists invest a certain quantity of money capital (M) in the sphere of circulation, prior to the production of output, to purcase means of production and labor-power. This empirical quantity of money capital ALREADY EXISTS, prior to production, and therefore CAN BE TAKEN AS GIVEN AS SUCH in the determination of the total price of the output and the total surplus-value (which is the main goal of the theory), as explained below: _______________________ Ajit: Fred, I gave you an example. The capitalist has 50 pounds of silver, which empirically already exists, with which he goes to buy constant capital and variable capital in the sphere of circulation. The prices of y and z and the wages of labor-power already exists also. Who is denying that they don't exist. Now you tell me how is this capitalist investing this empirically existing money capital of 50 pounds of silver. That is the question. If capital letters could substitute for arguments then life would be much easier. ____________________________ Fred: 1. The given empirical M is divided into C + V. C is the money capital advanced to purchase means of production, and V is the money capital advanced to purchase labor-power. ______________________ Ajit: So why not just take my example and show me how is it done. __________________ Fred: 2. The given empirical C becomes one component of the total price of the output (i.e. C is “transferred” to the price of the output). ____________________ Ajit: So, how much is C in the example I gave above? __________________ Fred: The other component of the total price is the new value produced by current labor (see #3 below), so that: P = C + N The given empirical C becomes the first component of the price of the output, no matter what determines the magnitude of C. It is not necessary to know the determination C in order for C to be the first component of P. ___________________ Ajit: But as I have shown above, you will not know C unless you know P. You may differentiate P of inputs from P of outputs and claim that P of inputs are known. If you are doing that, then clarify your position. Your statement "no matter what determines the magnitude of C" sounds weird. What else could determine the magnitude of C, except the quantity of the components of C multiplied by their respective prices? __________________________ Fred: The first component of the total P is the actual empirical C (as indeed it is in reality), whatever the magnitude of C. _____________________ Ajit: Since I'm getting tired of your "empirical C", I must ask you once again, what do you mean by "empirical C"? When I walk around Paris I don't ever come across the empirical C. So actually, it is somekind of data you must be getting from somewhere. Where are you getting this data from? ____________________ Fred: The first component of the total P is not a hypothetical quantity (equal to the labor-values of the means of production, as in the standard interpretation), because then the total P determined would be a hypothetical total P, not the actual total P, which the theory is intended to explain. 3. N is determined by the product of SNLT (L) and the MELT (m), both of which are also taken as given: N = m L ______________________ Ajit: Who gave you m? I take that L is data. However, you should keep in mind that your SNLT (L) is not "empirically given". You will need to do a lot of maniulations of the labor employment data and make a lot of assumptions to arrive at your SNLT. But I let this SNLT pass for now. ____________________________ Fred: 4. The given empirical V is subtracted from N in order to determine the total surplus-value produced: S = N - V = m L - m Ln where Ln = V / m = m (L - Ln) = m Ls The given empirical V is subtracted from N to determine S, no matter what determines the magnitude of V. It is not necessary to know the determination V in order to subtract the empirical V from N and determine S. The V that is subtracted from N to determine S is the actual empirical V (as indeed it is in reality), whatever the magnitude of V. V is not a hypothetical quantity (equal to the labor-values of the means of subsistence, as in the standard interpretation), because then the total S determined would be a hypothetical total S, not the actual total S, which the theory is intended to explain. Ajit, What is invalid about this logical procedure? Surely it is logically OK to begin a theory with these empirical observations of M = C + V, and use these empirical givens to determine N and S, as explained above. ____________________________ Ajit: There is nothing right about it. Frankly, I find it very childish. First fo all, you never explained how your empirical C is given (or for that matter your empirical M is given), except just write it in capital letters and say its given no matter how you determine it. Then you introduce a new animal called m, and simply assert that m is given. And still you claim that there is no problem with it? I don't know how? ________________________ Fred: ... Ajit: > Why do you > think Foley and Dumenil only took variable capital > given in terms of money and not the constant capital? > Because they knew that it would be fatal to their > whole argument. Cheers, ajit sinha Fred: Are you suggesting that it is OK to take money variable capital as given, but not OK to take money constant capital as given? Why should there be a difference between C and V in this regard? ________________________ Simple. Labor-power is one commodity, which has one price. Constant capital is made of millions of commodities, there is no one price of a commodity called "constant capital". Cheers, ajit sinha ____________________________________________________________________________________ Never miss an email again! Yahoo! Toolbar alerts you the instant new Mail arrives. http://tools.search.yahoo.com/toolbar/features/mail/

**Next message:**Jurriaan Bendien: "[OPE-L] the point of a dynamic model?"**Previous message:**B.R.Bapuji: "Re: [OPE-L] interpretations of capital and Marx"**In reply to:**Pen-L Fred Moseley: "Re: [OPE-L] questions on the interpretation of labour values"**Next in thread:**Pen-L Fred Moseley: "Re: [OPE-L] questions on the interpretation of labour values"**Reply:**Pen-L Fred Moseley: "Re: [OPE-L] questions on the interpretation of labour values"**Messages sorted by:**[ date ] [ thread ] [ subject ] [ author ] [ attachment ]

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