# [OPE-L:4826] new solution and the rate of surplus-value

fred moseley (fmoseley@laneta.apc.org)
Sun, 20 Apr 1997 22:04:04 -0700 (PDT)

[ show plain text ]

This is a belated response to Ajit's (4785) on whether or not the rate of
surplus-value as defined by me and the "new solution" (especially in
Duncan's version) - i.e. in
money terms rather than labor-time terms - is affected by capitalist
consumption.

Ajit's latest argument is to why our definition of the rate of
surplus-value IS affected by capitalist consumption is the following, in
Ajit's words: (the numbers 1 and 2 are my numbers for later reference):

1. Given a money commodity, [a change of capitalist consumption will
change the composition of the net output] and A CHANGE IN THE COMPOSITION
OF NET OUTPUT WOULD MOST LIKELY CHANGE THE MONEY VALUE OF THE NET OUTPUT.
Now, given your money wages, the profit-wage ratio would change, since
profit is nothing but the money value of net output minus money wages.

2. Above you say that V is given by money wages and S is *determined by
the "quantity of living labor*. NOW, PLEASE TELL US HOW THIS "QUANTITY OF
LIVING LABOR" IS RELATED TO THE "MONEY VALUE ADDED". Now, if it is the
same as I have suggested above, ie. total money value of net output is put
equal to total living labor time, then you cannot escape my conclusion. If
you think you can, then you will have to prove it, rather than just assert

First, my answer to 2: According to my interpretation (I answer for
myself here and let Duncan and others answer for the "new solution", if
they wish), money value added (MVA) is related to the quantity of living
labor (LL) by the following equation (which I have discussed in a number of
recent posts, but maybe before your time, Ajit):

MVA = m LL

where m is the inverse of the value of money, or the "monetary expression
of value". Assuming a given m, as Marx did (e.g. 0.5 shillings per hour),
then MVA is determined by LL and will change IF AND ONLY IF LL changes.

Now, with that basic assumption in mind, my answer to 1: It follows from
this assumption that a change of capitalist consumption will change the MVA
IF AND ONLY IF it changes LL. You say that "a change in the composition of
the net output will MOST LIKELY change the money value added." My answer
is the same: a change in the composition of the net output will change the
money value added IF AND ONLY IF it changes LL.

Therefore, according to my interpretation, a change of capitalist
consumption cannot DIRECTLY, BY ITSELF, without a change of LL, change my
rate of surplus-value. If this is what your original criticism meant, then
it is invalid. This is the way I interpreted your argument since you seem
to argue that MVA is changing without a change in LL (so that, according to
your argument, m changes, etc.). On the other hand, I agree that a change
of capitalist consumption can INDIRECTLY change my rate of surplus-value IF
it changes the quantity of living labor, and hence the quantity of money
Rather, it follows from the basic assumption of the labor theory of value.
What version of the LTV does NOT say that a change of living labor will