[OPE-L:2012] Re: determination of constant capital

["Andrew_Kliman" <Andrew_Kliman@xxxxxxxxxxxxx>]

A reply to Fred's OPE-L 1760.

Fred wrote:

: 7.  However, Andrew never considers the case in which "currently
produced"
: commodities move out onto the market (i.e. move into Phase 3)
and while
: they are circulating on the market (i.e. while they are in Phase
3), there
: is a change in the value of the means of production consumed in
their
: production. ... In this case, the constant capital transferred
to
"currently produced" commodities is NOT determined once and for
all when
the means of production consumed in these commodities enter
production.


Of course I consider this case.  This is the very case with which
the discussion began.  In my paper, "Determination of Value in
Marx and in Bortkiewiczian Theory," I quoted two passages from
Marx.  One of them stated:

 "Suppose that the price of cotton is one day sixpence a pound,
and
the next day, as a result of the failure of the cotton crop, a
shilling a pound. ...  the cotton already spun before the
rise, and perhaps circulating in the market as yarn, similarly
transfers to the product twice its original value." (Marx
1977:317-18)

I commented that this

"passage could perhaps seem to contradict the temporal
interpretation more directly, because Marx writes that the value
transferred to existing stocks of yarn rises, *after* the cotton
contained in them entered production. This, however, is also not
in dispute; it is clear that, because values are determined by
current production conditions, when the value transferred to newly
produced yarn rises, so must the value transferred to existing
stocks of yarn.  The dispute instead concerns the precise meaning
of the determination of values by current production conditions."

In this example, "while [yarn is] circulating on the market (i.e.
while [it is] in Phase 3), there
is a change in the value of the means of production [cotton]
consumed in [its] production."  According to my interpretation,
"the constant capital transferred to [the yarn] in Phase 3 WILL
CHANGE, to reflect the current value of the means of production
[cotton]. ... In this case, the constant capital transferred to
"currently produced" commodities is NOT determined once and for
all when the means of production consumed in these commodities
enter production."

There is no difference between us here.  Nothing in your argument,
Fred, contradicts the TSS interpretation of Marx's value theory in
any way.  Note in particular that no one has argued or is arguing
that the constant capital transferred to the yarn is determined
"once and for all."


Having responded to your question, Fred, I'd like you to respond
to mine (from OPE-L 1730), which you didn't do in your last post.
What is under consideration is a case in which cotton was
harvested last month, and won't be harvested for another year.  So
its price as an output was its price last month, say 10.  If some
of this cotton enters production of yarn today, then, ceteris
paribus, its price is still
10, so 10 is the sum of value transferred to the yarn produced
today (and by "reaction," to all pre-existing stocks of yarn).

Now, Fred, you have remarked that "the value transferred to the
pre-existing stock of yarn will be = 10, even though the price of
the cotton consumed in the yarn may have been = 5 when this cotton
first entered production."

I responded:  "Quite right.  And, I add, '... even though the
price of cotton may be = 15 when the yarn produced today is
completed.'  Do you see that this is implied in what you wrote,
Fred?  Do you still agree with it?  Is it premature to say
'Welcome Aboard, Fred!'?"

I'm still interested in your answer to these questions.


We were also considering the following statement of Fred's:

"Because the given constant capital is assumed to change to
reflect the current price of the means of production, when the
output of a given circuit of capital is finally sold, the price of
the means of production as inputs will be equal to the price of
the means of production as outputs."

I responded as follows:

"This can be taken in three different ways (at least).

"First, given the *common* meaning of "inputs" and "outputs," it
would mean something like this.  Corn is produced and sold today.
The price for which it is sold is the same as the price of the
corn input used to produce it.  This is not true in general.  I'd
like to know whether Fred agrees or disagrees.

"Second, it could mean that, in Marx's theory, the price for which
the corn produced today is sold determines the value transferred
to it from the corn that was used to produce it.  I think that is
false.  I'd like to know whether Fred agrees or disagrees.  If one
affirms this second proposition, prices must then be understood as
being determined simultaneously, everything reduces to physical
input-output relations, and all the anti-Marx results follow."

I'm also still interested in knowing whether you agree or disagree
with these notions, Fred.


Finally, I commented:

"Third, it could mean that the price of the corn that is produced
and sold today will be the same, today, as the price of corn
entering production today.  This is true, given the "law of one
price."  I'm sure Fred agrees with it.

"Fred appears to have meant the last of these by his statement.
If
so, we agree.  However, this doesn't take us very far.  It doesn't
address the issue of how prices, equal to values in the aggregate,
are *determined.*  Not at all.  Imagine a case in which all prices
= values.  Then the price of corn = the value of corn.  We agree
that the corn that enters production today is assumed by Marx to
have the same price as the corn that is produced and sold today.
Fine.  What, however, IS this price?  Well, it is the corn's
value.  Fine.  So what IS its value?  How is the commodity's value
DETERMINED?

"You can't answer that the value is the value added by living
labor
plus the "given" value transferred from the corn used as input.
When something is taken as given, the process of its determination
is left unexplained.  It is left *undetermined*.  With one part of
the commodity's value left undetermined, the commodity's value as
a whole is left *undetermined*.  Let me repeat:

"When something is taken as given, the process of its
determination
is left unexplained.  It is left *undetermined*.  With one part of
the commodity's value left undetermined, the commodity's value as
a whole is left *undetermined*.

"I know of only two answers that are actually answers, answers
that
actually address how commodity value is determined.  One is the
simultaneist answer:  the price = value for which the corn
produced today is sold determines the value transferred to it from
the corn that was used to produce it.  Values must then be
understood as being determined simultaneously, everything reduces
to physical input-output relations, and all the anti-Marx results
follow.

"The only other answer yet given is Marx's:  the price = value of
the corn produced and sold today is the sum of the value added by
living labor plus the price that the corn used to produce it had
when it entered production.

"Since there are only two actual answers out there, and Fred
steadfastly affirms that he rejects the simultaneist answer, may I
say "Welcome Aboard, Fred!"?"

I remain quite interested in knowing your answer to this, as well,
Fred.


Ciao

A2K