# [OPE-L:2222] Re: New Solution

S.Mohun (S.Mohun@qmw.ac.uk)
Wed, 15 May 1996 05:03:25 -0700

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I need some time to think about Riccardo's 2211 and I owe John a reply. I
hope not to be too long. Meanwhile I want to come back to something Andrew
just wrote.

Andrew:
>More important, however, I think, is this: THE VALUE OF LABOR-POWER, OR
> EVEN THE PRICE OF LABOR-POWER DETERMINED ACCORDING TO PRICES OF PRODUCTION,
> IS NOT THE SAME AS VARIABLE CAPITAL. Variable capital is the sum of value
> laid out to acquire workers. It is not determined theoretically, but
> practically--7 workers are hired for 1 week each at \$300 per worker.
> Variable capital is \$2100. (The TSS interpretation does not predict
> why it is 7 instead of 6 or 8, or \$300 instead of \$250 or \$350.)

Simon remarks:
Assume a 5 day week, 8 hours per day. So if 7 workers are hired, then 2800
hours are bought. \$2100 is paid, so each hour costs the capitalist 75 cents.
This is the VLP per hour of labour hired. And I said, multiply by the no. of
hours hired, and you have variable capital. Just like Andrew. Coincidence?

Andrew continues:
>By the same token, constant capital is not the value of means of production.
> It is the sum of value laid out that is used to acquire means of production.
>the end, but almost no one has paid attention to what he says here.
> He writes that MP and LP are just different forms of existence assumed
> by the capital, which was originally advanced (in his simplified discussion)
> in the form of an independent money. Credit must go to David Yaffe, who
> did notice this more than 2 decades ago.

Simon continues:
I assume Andrew is referring to the following:
Marx wrote:
'The excess of the total value of the product over the sum of the values of
its constituent elements is the excess of the capital which has been
valorized over the value of the capital originally advanced. The means of
production on the one hand, labour-power on the other, are merely the
different forms of existence which the value of the original capital assumed
when it lost its monetary form and was transformed into the various factors
of the labour process.
That part of capital ... which is turned into means of production
... does not undergo any quantitative alteration of value in the process of
production. For this reason, I call it ... constant capital.
On the other hand, that part of capital which is turned into
labour-power does undergo an alteration of value in the process of
production. It both reproduces the equivalent of its own value and produces
an excess, a surplus-value ... I therefore call it ... variable capital.'
(Capital 1, Penguin ed. p.317)

I think Andrew's interpretation is quite forced. Consider the following:
1. Surplus-value is the difference between the labour-value of the output
and the sum of the labour-value of the inputs.
2. Surplus-value is the difference between the value of the output (as a sum
of money) and the total sum of value laid out as money to purchase inputs.
Andrew is (I think) saying 2 and denying 1 (which is why he has been
interpreted by NC/Strathclyde as not having a LABOUR theory of value).
I think Marx is asserting 1 and 2 as synonymous (and can do so because he is
assuming prices proportional to values).

Am I interpreting Andrew correctly?
And what do others think about the substantive issue?

Lastly, I eventually worked out what BTW meant. But what on earth does RTFM!
mean?

Simon
Simon Mohun,
Dept of Economics,
Queen Mary and Westfield College,