Re: "Blindly operating averages" and price-value divergence

To: PEN-L@xxxxxxxxxxxxxxxx
Subject: Re: "Blindly operating averages" and price-value divergence
From: "michael a. lebowitz" <mlebowit@xxxxxx>
Date: Wed, 29 Nov 2006 19:02:14 -0400

At 17:58 29/11/2006, Angelus Novus wrote:

Walt Byers wrote:

> Also, could anyone tell me of the secondary works
> discussing Marx's views
> on price-value divergence that they know of.

I tend to agree with Michael Heinrich
< http://www.oekonomiekritik.de> that "value" and
"price" are simply categories existing at different
levels of abstraction in Marx's account. For an
account of how the "monetary theory of value" differs
from traditional Marxist accounts, there are good
introductory texts in English at
<mrzine.monthlyreview.org/heinrich031106.html> and
< http://info.interactivist.net/article.pl?sid=06/07/28/1916205&mode=nested&tid=9 >

I agree as well. In 'The Theoretical Status of Monopoly Capital' published in 1985 in Wolff & Resnick, Rethinking Marxism (essays for Sweezy and Magdoff), I wrote:

That was, in part, the project of Volume III of Capital--- to demonstrate why essence, the inner nature of capital, necessarily appeared as it did.
Thus, we see here in Volume III the consideration of the rate of profit (which has the rate of surplus-value as its ?invisible and unknown essence?) and prices of production (?an utterly external and prima facie meaningless form of the value of commodities, a form as it appears in competition?).[1]

[1] Ibid.: 43, 194.

This essay is waiting patiently to be reprinted by Brill in a collection, Following Marx: the method of political economy, which includes a new essay, 'Marx's Methodological Project' (basically, an unpublished piece which goes back to 1980) where I propose:

Surplus value, in short, is invisible. It is essence. It is a category discovered with the scientist?s instrument, the power of abstraction. Profit, in contrast, is ?the form of appearance of surplus-value, and the latter can be sifted out from the former only by analysis? (Marx, 1981b: 139). Only by the process of proceeding from the concrete to the abstract can we develop an understanding of surplus value (and thus its surface form). Profit, Marx noted, is ?a transformed form of surplus value, a form in which its origin and the secret of its existence are veiled and obliterated.?

...

We move, in short, from the surface phenomenon (profit) by analysis; and, through the process of reasoning, we develop the concept invisible on the surface (surplus value) which allows us to understand the concrete. That same distinction between inner and outer applies to value and price. We observe prices on the surface but their nature is entirely mystified. By developing the concept of value, an inner category, we can grasp the link to labour and from the concept of abstract labour to the nature of money. Indeed, without value, how could possibly we understand the nature of money and thus capital (Marx, 1981b: 295)?

...

However, here where we are considering Marx?s methodological project, an immediate question presents itself: if value, surplus value and the rate of surplus value do not exist on the surface whereas price, profit and the rate of profit are their respective forms and only exist on that plane, in what sense is it possible to talk about the ?transformation? of value into price?
If value, surplus value and the rate of surplus value are ?invisible essences?, then the much-discussed question of ?transformation? must be understood not to be a real process but, rather, a logical process between two levels of abstract thought. We can see that price and profit are the premise, i.e., are categories of the real society which are the point of departure. When it comes, however, to attempting to understand, the categories of value and surplus value precede price and profit but do not themselves exist alongside their forms.

And now back to the real world.

cheers,

michael

Michael A. Lebowitz

Professor Emeritus

Economics Department

Simon Fraser University

Burnaby, B.C., Canada V5A 1S6

Currently based in Venezuela.

NOTE NEW PHONE NUMBERS

Can be reached at

Residencias Anauco Suites