Ajit continues his discussion with me on value thus: ------------------------------------------------------------- In Marx a theory of prices is needed to insure the reproduction of the system, which intails realization of the surplus. Thus prices occupy different places and significance in different theoretical structure, and so are 'abstract' concepts. Paul ----- I think that this is a highly questionable interpretation of Marx. It looks like Marx seen through the Sraffian problematic. But is does not sit with the way things are actually presented in Marxs writings in his published volume of Capital and in the Contribution to the Critique which contain extensive passages dealing with money, his concern is with questions like why quantities of social labour are expressed as prices, ie in the form of quantities of gold. This is part of the general argument that establishes that the prices of commodities are proportional to their labour contents, which leads on to the theory of exploitation. The theory of surplus value depends upon being able to translate price quantities ( including the price of labour power ) into quantities of time, and thus logically depends upon his earlier explanation of price. The question of reproduction and realisation is not gone into until volume II of capital, and it is here examined quite independently of prices. Prices are not returned to until volume 3 where he deals with how they may systematically diverge from values under the influence of private property in land and of competition between capitals. It is here introduced as a 'realist' accomodation to what Marx believed to be an empirical fact - a very narrow dispersion of profit rates. But it is dealt with quite appart from the treatment of reproduction. It is only later writers, who have tried to deal simultaneously with reproduction and the formation of an equal rate of profit and to derive rules for the formation of prices that would achieve this _______________________ This is the crux of the matter. In the *Contribution to the Critique* as well as the first chapter of *Capital*, the question of surplus does not arise because the system has only one class, the class of commodity producers/owners. Marx introduces the problematic of value in this context, where the problem is the allocation of the *total social labour* in order to fulfill the total needs or demand registered in the market. The framework is essentially the neo-classical framework of allocation of the *given* resources, where value or prices play the role of allocating the resource (the given social labour) such that supply matches demand. Marx's letter to Kugelmann of July 11, 1868 as well as his various comments such as "[Robinson Crusoe's problem] contain[s] all the essential determinants of value" could scarcely mean anything else. My thesis is that once *capital* and *wage labour* are introduced in the system, a fundamental *break* takes place in Marx's problematic. Marx's problematic shifts from a *scarcity* problematic to a *surplus* problematic. The fundamental assumption of the scarcity or allocative problematic that the resources or the total social labour is *given* cannot be maintained in his surplus framework. In a simple commodity producing economy the producer or the supplier of labour supplies labour in order to fulfill his/her needs, i.e. both the demand and supply decisions are rooted in the single individual and therefore, Say's law holds. The neo-classical economics maintains the same framework for the supply of labour in the capitalist economy as well, where the workers determine labour supply on the basis of their utility functions. But in Marx's framework the total real wage basket, on the one hand, is determined by social and historical factors, whereas the *supply of labour* is determined by the struggle between the two *classes* (i.e. the strength of the combatents). And this struggle determines the production of surplus--given the wage basket. As you can see, in this framework the *total social labour* is by no means *given*. It is an outcome of a class struggle. Before you could introduce the problematic of allocation, you have to deal with the production of surplus. Thus my statement that the problematic of value must be read in the context of the reproduction of the capitalist system that entails realization of the surplus. Cheers, ajit sinha
