# Re: [OPE-L] questions on the interpretation of labour values

From: Pen-L Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Fri Mar 23 2007 - 09:44:38 EDT

``` From a post of mine yesterday:

Ajit:
But you know how to calculate GDP in principle, don't
you? Why can't you tell how to estimate your M in
principle?

I have already explained, both in general and in detail.  At the bottom
of this message is a post of several days ago, with more details.

I just realized that I failed to resend the earlier post, so here it is:

Hi Allin and Paul C.,

1.  M  =  C + V.  Let’s just consider C, which seems to be the more
controversial.

2.  C can be considered either as a flow or as a stock.  As a flow, it
is the first component of the price of the output.  And as a stock, it
is in the denominator of the rate of profit (along with the stock of
variable capital, which is generally negligible).

3.  Consider first the stock of constant capital.  Capitalist firms
invest a certain quantity of money constant capital to purchase means
of production (both machinery, etc. and raw materials).  These
quantities of money capital invested are recorded on the balance sheets
of the firms.  At a given point in time, these quantities of money
constant capital on the balance sheets of individual firms could be
added up to obtain the total stock of money constant capital for the
economy as a whole.

My interpretation is that this total stock of money constant capital
for the economy as a whole is taken as given in the determination of
the rate of profit in Marx’s theory.

4.  Similarly, the flow of constant capital is the price of the raw
materials consumed in this period’s production plus the periodic
depreciation cost of the machines, etc.  These quantities of money
constant capital are recorded on the income statements of firms.  These
quantities of money constant capital on the income statements of
individual firms over a certain period of time could be added up to
obtain the total flow of money constant capital for the economy as a
whole for this period.

Again, my interpretation is that this total flow of money constant
capital for the economy as a whole is taken as given in Marx’s theory,
and becomes the first component of the total price of commodities in
the economy as a whole.