[OPE-L:3458] determination of constant capital

["Fred B. Moseley" <fmoseley@xxxxxxxxxxxxx>]

I finally have some time to get back to my discussion with Andrew (and
hopefully others) about the determination of constant capital, in the case
when there is a change in the value of the means of production, the
crucial issue in the evaluation of the TSS interpretation of Marx's
theory.

1.  Andrew argues (as I understand him) that the value transferred from a
given set of means of production is determined WHEN THESE MEANS OF
PRODUCTION ENTER PRODUCTION.  Hence, if there is a change in the value of
these means of production AFTER they have entered production, then the
value transferred from these means of production to the price of the
output WILL NOT CHANGE.

I argue, on the other hand, that if there is a change in the value of
these means of production after they have entered production, but BEFORE
THE OUTPUT PRODUCED FROM THESE MEANS OF PRODUCTION ARE SOLD, then the
value transferred from these means of production to the price of the
output WILL CHANGE accordingly.  The value transferred from the means of
production is determined by the CURRENT value of these means of
production, and will change if the current value of these means of
production changes.


2.  I have shown in my recent IWGVT paper that there are twelve passages,
from throughout Marx's manuscripts, from the early Poverty of Philosophy
in 1847 to the final published versions of Volume 1 of Capital, in which
Marx EXPLICITLY stated that, if the value of the means of production
change AFTER the means of production ENTER production, but BEFORE the
output produced from these means of production is SOLD, then the value
transferred to the output WILL CHANGE correspondingly.  In other words,
the value transferred is not determined once and for all when they enter
production (as Andrew seems to argue), but can change after the means of
production have entered production, if the value of these means of
production change before the output is sold.

The most important such passage, that I would like to focus on in this
post, is from Chapter 8 of Volume 1 of Capital.  This is the only passage
in which Marx discussed this question in a work published during his
lifetime (and of course Marx prepared Volume 1 for publication three
times).  Therefore, one would expect that Marx took special care to make
sure that he said exactly what he wanted to say on this issue.  For this
reason, I think this passage should be considered Marx's DEFINITIVE
statement on this question.

Chapter 8 is of course the important chapter in which Marx introduced and
defined his key concepts of constant capital and value capital,
immediately following the presentation of his theory of surplus-value in
Chapter 7.  Marx ended this important chapter by specifying more precisely
what happens to the magnitude of constant capital (both the flow of
circulating constant capital - the value transferred to the price of the
output - and the stock of fixed constant capital), in the case when the
value of the means of production changes before the output is sold.  Here
Marx said:

"The definition of constant capital and variable capital given above by no
means excludes the possibility of a change of value in its
elements. Suppose that the price of cotton is one day sixpence a pound,
and the next day, as a result of a failure of the cotton crop, a shilling
a pound. Each pound of the cotton bought at sixpence, and worked up after
the rise of value, transfers to the product a value of one shilling; AND
THE COTTON ALREADY SPUN BEFORE THE RISE, AND PERHAPS CIRCULATING IN THE
MARKET AS YARN, SIMILARLY TRANSFERS TO THE PRODUCT TWICE ITS ORIGINAL
VALUE...  The value of a commodity is certainly determined by the quantity
of labor contained in it, but this quantity is itself socially
determined.  If the amount of labor-time socially necessary for the
production of any commodity alters - and a given weight of cotton
represents more labor after a bad harvest than after a good one - this
reacts back on all the old commodities of the same type, because they are
only individuals of the same species, and their value at any given time is
measured by the labor socially necessary to produce them, i.e. by the
labor necessary under the social conditions existing at the time."   (C.I,
pp. 317-18; emphasis added)

Please note especially the emphasized phrase about the yarn "ALREADY SPUN
BEFORE THE RISE and perhaps CIRCULATING ON THE MARKET AS YARN."  In the
case Marx is discussing, the cotton "spun before the rise" and "already
circulating on the market" as yarn ENTERED PRODUCTION with a value of
sixpence.  However, when the value of cotton increased AFTER THAT to 1
shilling, Marx clearly and explicitly states that, the value transferred
from the cotton to this ALREADY PRODUCED YARN will also increase to 1
shilling.

In other words, the value transferred from this cotton is definitely NOT
determined once and for all when this cotton entered production (with a
value of sixpence).  Instead, if the value of the cotton changes after
this cotton has entered production, but before the yarn is sold, then the
value transferred to the already produced yarn will change
correspondingly.  The value transferred from the cotton to the yarn is
determined by the CURRENT value of cotton, not by value of cotton when it
entered production.


3.  In one of Andrew's series of OPEL posts last September (#1376), Andrew
had the following to say about this key passage from Chapter 8:

"The first passage [the passage from Chapter 8] 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.  It therefore pertains to the
valuation, not of existing stocks, but only of yarn that is *currently*
produced."

But, Andrew, I do not understand why this issue is not in dispute.  It
seems to me to be precisely the issue in dispute.  You have argued (as I
understand it) that the value transferred from a given set of means of
production, in this case cotton, is determined WHEN THE COTTON ENTERS
PRODUCTION, such that, if there a change in the value of cotton after the
cotton enters production, but before the yarn is sold, then the value
transferred to the yarn WILL NOT CHANGE.

But Marx's text clearly says precisely the opposite.  The cotton enters
production with a value of sixpence.  After the yarn has been produced,
the value of cotton increases to 1 shilling.  Marx clearly says that value
transferred to the cotton increases to 1 shilling AFTER the cotton has
entered production.  And in the above passage, you seem to agree that, if
the value of the cotton changes AFTER the cotton enters production, but
before the yarn is sold, then the value transferred to the yarn will
indeed change as well.  In other words, the value transferred from the
cotton to the year is NOT determined when the cotton enters
production.  So what gives?

A paragraph later in the same OPEL post, Andrew said:

"Specifically, if the cotton contained in the *most recently produced*
yarn entered into production BEFORE the change in the price of cotton, is
the value transferred to *this* yarn determined by the cotton's
pre-production price or by its changed price?  If anything, the passage
seems to support the temporal interpretation, by implying that cotton
"worked up AFTER the rise in value [...] transfers [...] a value of one
shilling" because that is its price when it enters production."
(capatalized emphasis added)

Notice that Andrew's second sentence does not answer the question posed in
the first sentence.  The first sentence asks about the cotton spun BEFORE
the change in the price of cotton - which is the key disagreement between
Andrew and myself.  The second sentence talks about the cotton spun AFTER
the change in the price of cotton, about which there is not disagreement
between us.

So, Andrew, what is your answer to your question in the first sentence:
if cotton entered production BEFORE the change in the price of cotton, but
before the output is sold, does the value transferred from this cotton
"already circulating on the market as yarn" change or not?


4.  As I have said, Marx made many similar statements like this throughout
his manuscripts, about the determination of the magnitude of constant
capital when the value of the means of production changes. "GOODS ALREADY
CIRCULATING ON THE MARKET" is a phrase that recurs repeatedly in these
passages.  Marx stated over and over again that, if there is a change in
value of the means of production used to produce these "goods already
circulating on the market", then the value transferred from the means of
production to these "goods already circulating on the market" will change
accordingly.  The value transferred from the means of production to these
"goods already circulating on the market" is NOT determined once and for
all when the means of production enter production.


I will be happy to discuss in subsequent posts other textual evidence
(including the passage on Ramsay that Andrew emphasizes) and other points
in Andrew's recent posts, but first I would like to know Andrew's (and
other TSSer's) interpretation of this key passage in Chapter 8.


I look forward to further discussion.

Comradely,
Fred