Jim Devine writes: Ajit continues, on the so-called "transformation problem": "... What Marx is attempting to prove by transforming values to prices of production is that his basic theoretical categories given by constant capital (c), variable capital (v), and surplus value (s) are determined from outside the market forces. All the three variables are defined and measured in *embodied labour* units. C is given by the current technology, V is determined by the social and historical forces, and S is determined by the class struggle." I've already indicated some citations from vol. I of CAPITAL that indicate that Marx only used "embodied labor units" for a static society such as "simple commodity production." In a dynamic society such as capitalism, we have to be concerned with moral depreciation. I also noted that Marx writes that if the market "cannot stomach" all that is produced, embodied labor can turn out ex post to be socially useless and thus not be part of value. So "market forces" play a role in determining values (though he usually abstracted from this fact, assuming full realization of value produced). Jim _________________________ Now we are getting somewhere! I think your interpretation of value is incorrect. You don't seem to make the difference between "value" and "market prices"--a difference quite important to Marx's theory. "Value" is defined at the point where there is no realization problem. Whenever supply and demand (and they are not demand and supply schedules) do not match, market prices diverge from value. The "law of value" basically refers to the tendency of the market prices to move toward the value, as if value was the gravitational point just like the law of gravitation. Let me ask you a question, to "push" you to think positively rather than always in negative terms on this issue. Can you say that a commodity X has L hrs. of labour as its value? And if you can, then how do you arrive at this L? ajit __________________________ There have been a lot of articles opposing the "embodied labor" interpretation (usually associated with the neo-Ricardian or Sraffian perspective) in CAPITAL & CLASS. Rather than creating a full-scale bibliography, I'll quote Marx's CAPITAL vol I again: Jim _________________________ And you thought I must be unaware of it! I think most of those articles are poor in quality and don't show very good understanding of Marx. They were written hurredly and are not good research papers. They rely too much on the first chapter of *Capital*1, which of course deals with the simple commodity production--which I thought in your opinion was the "static model" and not the representative of capitalist economy etc., etc. And their anti-neoRicardianism is rooted in their interpretation of Marx as a scarcity theorist veiled in the Marxist jargon such as "allocation of social labour" instead of allocation of resources with a sprinkle of "dialectical method" and "commodity fetishism". ajit _________________________ "Not an atom of matter enters into the objectivity of commodities as values; in this it is the direct opposite of the coarsely sensuous objectivity of commodities as physical objects. We may twist and turn a single commodity as we wish; it remains impossible to grasp it as a thing possessing value. Remember, commodities possess an objective character as values only in so far as they are all expressions of an identical _social_ substance, human labor; their objective character as values is therefore _purely_ social." (David Smith's altered translation of the first page of section 3 of chapter 1; my emphasis) Jim ___________________________ What do you think you are trying to prove with this quote Jim. No one has ever said that *embodied labour* has to do with the physical property of the commodity. This is the kind of misinterpretation of others position I'm arguing against. ajit ___________________________ It's not some substance "embodied" in commodities that determines their value. It's their social context. Jim ____________________________ And, what is the "social context"? ajit ___________________________ Ajit continues: "Market forces only determine prices or 'prices of production' by reallocating the total surplus among the exploiting classes so that the condition for reproduction is established in the bourgeois accounting: 'The various different capitals here are in the position of shareholders in a joint stock company, in which the dividends are evenly distributed for each 100 units' ..." This vision that capitalists (as individuals) "are in the position of shareholders in (one big) joint stock company" fits perfectly with my view that vol. I of CAPITAL makes most sense if we think of it as describing capitalism as a "societal factory" in which abstract capital fights abstract labor. It also fits with the idea that the so-called "transformation problem" is like a "disaggregation problem," where we go from the "societal factory" to the vol. III world of concrete and heterogeneous capital in competition with each other. (It's similar to the "transformation" of the value of labor-power into wages in ch. 19 of vol. I.) Jim ___________________________ For a long time I have been keeping quiet about this "social factory". Sounds like a really bad idea to me. Marx severely criticised Smith for not making the theoretical distinction between a technical division of labour (i.e. the division of labour within a factory) and a social division of labour in his pin factory example. If the whole society is treated as a giant factory, then of course there is no social division of labour and the whole rationale for commodity exchange disappears, and so your beloved "commodity fetishism" disappears along with it--as well as your *Capital and Class* critique of the "neo-Ricardian" interpretation. I don't understand how can you live so happily with such contradiction. I guess this is called *dialectics*. And one more point. The idea of a "societal factory" would take away the competitive element of the capitalist system. So there goes the main cause of dynamics of the capitalist system too. Ajit ____________________________ I do wonder how one could ever talk about a "law of distribution" that is determined "from outside the market forces" in a capitalist society where "market forces" are so central. (Lenin defined capitalism as "generalized commodity production," e.g.) Jim ___________________________ And how does the "market forces" work in your "societal factory" Jim? Is reference to Lenin supposed to scare me? Well, I'm not scared. ajit ___________________________ BTW, it should be clear that Ricardo's goals (as stated in your quotes) are very similar to _your interpretation of_ Marx's goals. But in my reading, Marx went beyond Ricardo's emphasis on distribution to deal with actual production of the surplus-product. He saw capitalism as not only an economic system but a _social_ one. He also was highly concerned with the "laws of motion" of the system. Except for the discussion of the "transformation prob" in vol. III, he doesn't deal with static situations except as a prelude to dynamics (e.g., simple reproduction is immediately followed by expanded reproduction). Even there he turns to the oscillations of market prices soon thereafter. Jim ____________________________ This is an ideological baloney. And I'm not going to engage you on this one at this time. Who do you think does not know that Marx's theory of capitalism is dynamic? The reference of the debate here is the 'transformation problem'. Remember your quote from Marx about "abstraction"? By the way, why simple reproduction is "static" and not "dynamic"? ajit ____________________________ Ajit continues: "And to club Bohm-Bawerk and Bortkiewicz is simply wrong. ... Bortkiewicz's contribution as a matter of fact is a critique of Bohm-Bawerk and a defense of Marx." Yes, but Bortkewicz's defense of Marx involved an implicit critique (very different from B-B's) that said that Marx was inferior to Ricardo or perhaps a minor post-Ricardian. Jim _________________________ Have you really read Bortkewicz Jim? I seriously doubt it now. ajit _________________________ We will deal with "commodity fetishism" at some appropriate time. Cheers, ajit sinha
