Re: [OPE-L] Truncating Marx's "Capital"

From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Sat Sep 01 2007 - 21:16:09 EDT


Quoting Michael Perelman <michael@ECST.CSUCHICO.EDU>:

>> > The punchline is that the value remaining in capital goods that have
>> > already gone through a production cycle is indeterminate, especially
>> > because of changes in reproduction costs of the capital.  As a result,
>> > one cannot know how much value will be transferred to the final product
>> > from the constant capital because of this indeterminacy.
>> >

Hi Michael, thanks for your reply.

I was aware of this punchline, but I donít see what it has to do with
the issue of sequential vs. simultaneous determination.  Would you
please explain?

In any case, I donít see how this is a problem in Marxís theory.  You
are right that we often donít know in advance what constant capital is,
because of technological change, and capitalists donít know either.
But in the real world, there is a definite amount of constant capital
that is transferred to the long-run equilibrium prices of the output,
as enforced by competition.  This quantity of constant capital is an
objective fact, even if we donít know what the quantity is.

And whatever this actual constant capital is, that is what is taken as
given in Marxís theory, and transferred to the value and price of
production of the output, and becomes one component of the long-run
equilibrium price of the output.  One doesnít have to know what the
magnitude of constant capital is, either ex-ante or ex-post, in order
to assume that it exists and take it as given in the determination of
the value of the output (sequential determination).

Furthermore, the precise magnitude of constant capital doesnít matter
much anyway, because whatever it is, it is simply transferred to the
value of the output, and thus has no effect on the magnitude of
surplus-value, which is the main variable explained by the theory.

So I donít see why the empirical uncertainty of constant capital is a
problem in Marxís theory.

Comradely,
Fred


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