Re: Re: Marx on value
I wrote: >>At this high level of abstraction, the price of production of any >>commodity equal its value (while the market price of the commodity equals >>its price of production), if we measure prices and values using the same >>metric. I could also find the footnote where Marx admits that he's making >>an assumption, but all my copies of volume I are at work. (The >>no-realization-crisis assumption is in the preface to the section on >>accumulation.) what I was thinking of can be found at the end of chapter 5 of CAPITAL Vol. I: >The conversion of money into capital has to be explained on the basis of the laws that regulate the exchange of commodities, in such a way that the starting-point is the exchange of equivalents. > [footnote: ] From the foregoing investigation, the reader will see that this statement only means that the formation of capital must be possible even though the price and value of a commodity be the same; for its formation cannot be attributed to any deviation of the one from the other. If prices actually differ from values, we must, first of all, reduce the former to the latter, in other words, treat the difference as accidental in order that the phenomena may be observed in their purity, and our observations not interfered with by disturbing circumstances that have nothing to do with the process in question. [this abstraction is similar to making an assumption, though not in the sense of deductive logic. -- JD] We know, moreover, that this reduction is no mere scientific process. The continual oscillations in prices, their rising and falling, compensate each other, and reduce themselves to an average price [the price of production -- JD], which is their hidden regulator. It forms the guiding star of the merchant or the manufacturer in every undertaking that requires time. He knows that when a long period of time is taken, commodities are sold neither over nor under, but at their average price. If therefore he thought about the matter at all, he would formulate the problem of the formation of capital as follows: How can we account for the origin of capital on the supposition that prices are regulated by the average price, i. e., ultimately by the value of the commodities? I say "ultimately," because average prices do not directly coincide with the values of commodities, as Adam Smith, Ricardo, and others believe. < The connection between "average prices" [prices of production] and values is on the macro level, as seen in Marx's equation of total prices with total value. In the quote above, Marx does not explicitly assume that prices = value, but this assumption follows directly if we abstract from the homogeneity within the capitalist class, ignoring differences in the organic composition of capital -- as Marx does in vol. I. I remember that Marx makes the assumption explicit somewhere in vol. II, but I don't have the energy to look at this point. [Returning home to Chris Burford's message, again I had no copy of CAPITAL vol. I on hand. (Weirdly, all four of them [!] at work, whereas I have three copies of vol. II here!) However, I remembered that I had a CD-ROM of the "Multimedia Capital." But I couldn't cut and paste a footnote from it -- so I had to find the above on the web. In the process, I found that someone put two folk-type songs on the CD-ROM. Neither has anything to do with CAPITAL! Perhaps the group that produced the CD-ROM includes a singer-songwriter.) Jim Devine [EMAIL PROTECTED] & http://liberalarts.lmu.edu/~JDevine
Re: Re: Marx on value
Chrish Burford wrote: >> I could not find the footnote, but Marx uses the word "assume" in the sense > in which Jim uses it Playing with words. The results already obtained include Marx's logico-historical derivation of the _existent_, equal comodity exchange. Mark Jones http://www.egroups.com/group/CrashList
Re: Re: Re: Marx on value
In fact surely the entire burden of Marx's thesis in all 3 vols of Cap + TSV and indeed in all his mature economics writing, is that profits MUST be explained and CAN ONLY be explained on the basis of EQUAL commodity exchange, not for eg according to Physiocratic notions about wheat harvests or mercantilist mysticism or whatever. The passages Jim Devine cites below exactly encapsulate this central idea. And this is a separate question anyway from the equivalence (or not) of values and prices, no? Mark Jones http://www.egroups.com/group/CrashList - Original Message - From: "Jim Devine" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Tuesday, April 18, 2000 6:06 AM Subject: [PEN-L:18220] Re: Re: Marx on value > I wrote: > >>At this high level of abstraction, the price of production of any > >>commodity equal its value (while the market price of the commodity equals > >>its price of production), if we measure prices and values using the same > >>metric. I could also find the footnote where Marx admits that he's making > >>an assumption, but all my copies of volume I are at work. (The > >>no-realization-crisis assumption is in the preface to the section on > >>accumulation.) > > what I was thinking of can be found at the end of chapter 5 of CAPITAL Vol. I: > > >The conversion of money into capital has to be explained on the basis of > the laws that regulate the exchange of commodities, in such a way that the > starting-point is the exchange of equivalents. > > > [footnote: ] From the foregoing investigation, the reader will see that > this statement only means that the formation of capital must be possible > even though the price and value of a commodity be the same; for its > formation cannot be attributed to any deviation of the one from the other. > If prices actually differ from values, we must, first of all, reduce the > former to the latter, in other words, treat the difference as accidental in > order that the phenomena may be observed in their purity, and our > observations not interfered with by disturbing circumstances that have > nothing to do with the process in question. [this abstraction is similar to > making an assumption, though not in the sense of deductive logic. -- JD] We > know, moreover, that this reduction is no mere scientific process. The > continual oscillations in prices, their rising and falling, compensate each > other, and reduce themselves to an average price [the price of production > -- JD], which is their hidden regulator. It forms the guiding star of the > merchant or the manufacturer in every undertaking that requires time. He > knows that when a long period of time is taken, commodities are sold > neither over nor under, but at their average price. If therefore he thought > about the matter at all, he would formulate the problem of the formation of > capital as follows: How can we account for the origin of capital on the > supposition that prices are regulated by the average price, i. e., > ultimately by the value of the commodities? I say "ultimately," because > average prices do not directly coincide with the values of commodities, as > Adam Smith, Ricardo, and others believe. < > > The connection between "average prices" [prices of production] and values > is on the macro level, as seen in Marx's equation of total prices with > total value. > > In the quote above, Marx does not explicitly assume that prices = value, > but this assumption follows directly if we abstract from the homogeneity > within the capitalist class, ignoring differences in the organic > composition of capital -- as Marx does in vol. I. I remember that Marx > makes the assumption explicit somewhere in vol. II, but I don't have the > energy to look at this point. > > [Returning home to Chris Burford's message, again I had no copy of CAPITAL > vol. I on hand. (Weirdly, all four of them [!] at work, whereas I have > three copies of vol. II here!) However, I remembered that I had a CD-ROM of > the "Multimedia Capital." But I couldn't cut and paste a footnote from it > -- so I had to find the above on the web. In the process, I found that > someone put two folk-type songs on the CD-ROM. Neither has anything to do > with CAPITAL! Perhaps the group that produced the CD-ROM includes a > singer-songwriter.) > > Jim Devine [EMAIL PROTECTED] & http://liberalarts.lmu.edu/~JDevine > >
Re: Re: Re: Marx on value
At 22:06 17/04/00 -0700, you wrote:
>what I was thinking of can be found at the end of chapter 5 of CAPITAL Vol. I:
...
> average prices do not directly coincide with the values of commodities,
> as Adam Smith, Ricardo, and others believe. <
This argument is why it is unwise to use the term "Labour Theory of Value"
to summarise Marx's economics, since a) this theory was held by the
classical economists, and b) he differentiates himself from them by the
comment above. It is the *social* value of the commodity that is relevant.
Jim D draws attention to Marx's method of abstracting from the fluctuations
to get to the essence of the process of capital accumulation.
We should note in the context of the crisis of world political economy,
that this method of abstraction does not *explicitly* deal with a situation
in which the forces of production are being revolutionised on a daily
basis. Marx deals with that elsewhere and describes the relative surplus
value that a capitalist can achieve by owning a temporary or partial
monopoly of more efficient means of production.
In such a rapidly changing economy, the old forces of production also
suffer from a continual "moral depreciation" ("moral" meaning "social").
This is among other things the fate of the third world countries today, who
are deprived of any chance of building up local or regional surpluses by
the sado-monetarism of the IMF.
Thus the mechanisms by which the imperialist countries exploit the peoples
of the third world are partly hidden.
The anarchists show the courage of their convictions but they muddle the
theoretical basis of their attack on global capitalism by implying that it
is government itself that is at fault.
Chris Burford
London
Re: Re: Re: Re: Marx on value
At 07:55 AM 04/18/2000 +0100, you wrote: >In fact surely the entire burden of Marx's thesis in all 3 vols of Cap + >TSV and indeed in all his mature economics writing, is that profits MUST >be explained and CAN ONLY be explained on the basis of EQUAL commodity >exchange, not for eg according to Physiocratic notions about wheat >harvests or mercantilist mysticism or whatever. The passages Jim Devine >cites below exactly encapsulate this central idea. And this is a separate >question anyway from the equivalence (or not) of values and prices, no? I'd say that profits can only be explained in these terms within Marx's framework. However, they still exist once we drop the equal exchange assumption. Then the question comes up of the origin of individual capitalists' profits -- and differences of profitability amongst individual capitalists. That can't be explained in terms of equal exchange, though of course the initial equal-exchange framework that Marx started with tells us where the profits of these capitalists come from originally (exploitation of workers). BTW, I think it's possible to develop a Marxian theory of the origins of profit without equal exchange or even the "law of value." Marx starts with a societal perspective, with "capital as a whole" in vol. I of CAPITAL and moves in the direction of dealing with individuals and individual differences. But I think one can develop of Marxian theory of exploitation even starting from an individualistic, neoclassical perspective, and then moving toward the societal perspective. (See my "Taxation without Representation: Reconstructing Marx's Theory of Capitalist Exploitation." In William Dugger, ed. _Inequality: Radical Institutionalist Views on Race, Class, Gender, and Nation_. Greenwood Press, 1996.) I don't think this would have been possible without Marx's work, however. Unlike Roemer, who simply jettisons Marx's methodology and reduces Marx's theory of exploitation to a static and formalistic theory of scarcity rents, I think that Marx's dialectical method is absolutely necessary (though hardly sufficient). Jim Devine [EMAIL PROTECTED] & http://liberalarts.lmu.edu/~JDevine
Re: Re: Re: Re: Marx on value
>>> Jim Devine <[EMAIL PROTECTED]> 04/18/00 11:03AM >> BTW, I think it's possible to develop a Marxian theory of the origins of profit without equal exchange or even the "law of value." Marx starts with a societal perspective, with "capital as a whole" in vol. I of CAPITAL and moves in the direction of dealing with individuals and individual differences. But I think one can develop of Marxian theory of exploitation even starting from an individualistic, neoclassical perspective, and then moving toward the societal perspective. (See my "Taxation without Representation: Reconstructing Marx's Theory of Capitalist Exploitation." In William Dugger, ed. _Inequality: Radical Institutionalist Views on Race, Class, Gender, and Nation_. Greenwood Press, 1996.) I don't think this would have been possible without Marx's work, however. Unlike Roemer, who simply jettisons Marx's methodology and reduces Marx's theory of exploitation to a static and formalistic theory of scarcity rents, I think that Marx's dialectical method is absolutely necessary (though hardly sufficient). CB: Now there's an interesting thought. Care to elaborate a little ? CB
Re: Re: Re: Re: Re: Marx on value
I wrote: >BTW, I think it's possible to develop a Marxian theory of the origins >of profit without equal exchange or even the "law of value." Marx starts >with a societal perspective, with "capital as a whole" in vol. I of >CAPITAL and moves in the direction of dealing with individuals and >individual differences. But I think one can develop of Marxian theory of >exploitation even starting from an individualistic, neoclassical >perspective, and then moving toward the societal perspective. (See my >"Taxation without Representation: Reconstructing Marx's Theory of >Capitalist Exploitation." In William Dugger, ed. _Inequality: Radical >Institutionalist Views on Race, Class, Gender, and Nation_. Greenwood >Press, 1996.) I don't think this would have been possible without Marx's >work, however. Unlike Roemer, who simply jettisons Marx's methodology and >reduces Marx's theory of exploitation to a static and formalistic theory >of scarcity rents, I think that Marx's dialectical method is absolutely >necessary (though hardly sufficient). >CB: Now there's an interesting thought. Care to elaborate a little ? one comment (and then I'm going off-line, due to the work-load): What's needed to allow Marx-type exploitation in a neoclassical theory are: 1) macro-level subjection of labor by capital, involving the monopolization of the means of production and subsistence by the capitalists and a persistent reserve army of labor (structural coercion). 2) micro-level subjection of labor by capital, in which capital almost always has labor under control. This involves a more sophisticated view of production than NC economics has. 3) worker's submission, their disorganization and their willingness to accept this system. It should be mentioned that at its best, NC economics is simply supply and demand (not really much of an improvement over Adam Smith's economics). So what I say doesn't contradict S&D (just as Marx developed his theory in a way that didn't contradict the assumption of equal exchange). Note also that I ignore micro-level monopoly most of the time, seeing it primarily as a matter of redistribution of previously-produced surplus-value. Jim Devine [EMAIL PROTECTED] & http://liberalarts.lmu.edu/~jdevine
