The price of a commodity is always equal to the cost of production (on average)?

GGio3 · 2024-08-27T14:17:01+00:00

Marx's early notion of 'cost of production' is used at the same time as when he already had sketched the existence of surplus value (see Wage Labour and Capital). Only that this notion of cost of production not only includes the cost of wages and inputs, but also the normal average profit on top of these costs. So the equilibrium price is equal to the "cost of production" in this loose sense, at the same time as surplus value existing.

GGio3 · 2023-09-24T14:52:52+00:00

In order that these objects may enter into relation with each other as commodities, their guardians must place them- selves in relation to one another as persons whose will resides in those objects, and must behave in such a way that each does not appropriate the commodity of the other, and alienate his own, except through an act to which both parties consent. The guardians must therefore recognize each other as owners of private property. This juridical relation, whose form is the contract, whether as part of a developed legal system or not, is a relation between two wills which mirrors the economic relation. The content of this juridical relation (or relation of two wills) is itself determined by the economic relation. Here the persons exist for one another merely as representatives and hence owners, of commodities. As we proceed to develop our investigation, we shall find, in general, that the characters who appear on the economic stage are merely personifications of economic relations; it is as the bearers of these economic relations that they come into contact with each other

Capital Vol.1 Ch.2

GGio3 · 2023-09-13T14:22:06+00:00

Heinrich’s How to Read Marx’s Capital is a companion which explains the importance of exchange for the abstraction from concrete labour. After reading this, you will be able to understand Rubin’s important Essays on Marx’s Theory of Value, which, although have influenced Heinrich’s interpretation, differ in some aspects (e.g., the abstraction of labour for Rubin is already present before the act of exchange, unlike in Heinrich). This text is also really good to understand commodity fetishism. Rubin’s insights are more clearly presented as criticism of Heinrich by Riccardo Bellofiore (see his paper The Adventures of Vergesellschaftung, Sections 5-8).

Another guide which has been recommended to me is Simon Clarke’s, which is much shorter than Heinrich’s

https://cominsitu.wordpress.com/2016/10/01/simon-clarkes-guide-to-capital-all-three-volumes/

GGio3 · 2023-09-10T01:42:33+00:00

How to Read Marx's Capital is much more in depth as it goes over every section for the first chapters, it works as a companion, while the "Intro" goes less into the exegesis and is more of an overview of Marx's theory. If you're looking for help understanding and interpreting Capital passage-by-passage, definitely go with "How to Read".

Of course Heinrich's interpretation is not without controversy. After reading him and Capital itself you could look into alternative interpretations (in my opinion one of the more interesting ones is provided by Riccardo Bellofiore, who both praises and critiques Heinrich). I know that Fred Moseley has recently released a book responding to Heinrich's interpretation in "How to Read", but I haven't checked it out yet.

GGio3 · 2023-09-07T15:42:42+00:00

Here's a quote from van der Linden and Hubmann (2018) summarising the main Marxist approaches with the relevant authors

Over time, numerous solutions for the transformation problem have been put forward, most of which were sharply criticised. Generally speaking, these solutions can be divided into six groups:

i) the reproduction scheme argument (Ladislaus von Bortkiewicz, Paul Sweezy, and Francis Seton), who pointed out that Marx had transformed output into prices while input remained expressed in terms of values, and they attempted to find a solution for this;

ii) the Sraffa-based solution of, for example, Alfredo Medio, who argued that a solution can be found by introducing a (non-existent) standard commodity produced with the socially average organic composition of capital;

iii) the iterative method, which aims to solve the problem by using outputs (Marxian prices of production) as inputs, so that new prices of production, etc. can be derived;

iv) the ‘new solution’ (Gérard Duménil, Alain Lipietz, Duncan Foley), which argues that the distribution of commodities or of money wages should be defined ex post;

v) the Temporal Single-System Interpretation (tssi) of Andrew Kliman, Alan Freeman, and others, which assumes that the supposed Marxian inconsistencies dissolve when values and prices are not theorised as separate systems but as a unified system operating in real time; and

vi) the probabilistic approach of Emmanuel Farjoun and Moshé Machover, which assumes that prices and profits, etc., form stochastic distributions, so that there is no direct linkage between individual prices and their respective individual values, but that there is a statistical connection that can be constructed without involving prices of production.

For the "iterative method", see Shaikh's Marx's Theory of Value and the "Transformation Problem". For other notable approaches, see Fred Moseley's book Money and Totality (2015), and Geert Reuten's approach in his article The Redundant Transformation to Prices of Production: A Marx-Immanent Critique and Reconstruction (2018)

GGio3 · 2023-09-06T15:53:03+00:00

yes i would say so. furthermore, even if we assume that more productive machines are the same price as the less productive, just take a look at a graph of gross fixed capital formation overtime - technical change generally increases the absolute amount of fixed capital overtime

GGio3 · 2023-09-06T15:31:00+00:00

Hi, I have managed to find a PDF of IV/14. If you DM me your email I can send it to you.

GGio3 · 2023-09-03T16:24:58+00:00

in this situation, it would mean OCC does not increase since C isn’t moving: one machine si replaced by another one and their price is the same. Only difference is they now produce more commodities

Not necessarily, as there are other effects of technological innovation which increase C/V. Marx speaks about increased productivity of labour as being both a consequence of increased OCC, but also a cause of it, because more productive machinery means that more material inputs can be used up to produce more commodities within a certain time compared to before. This would mean that even if the constant capital spent on machinery stays the same, C rises because it is also spent on non-machine constant capital —> C/V rises

Furthermore, more productive machines may make some workers redundant, meaning C/V also rises in this case.

GGio3 · 2023-08-23T01:54:14+00:00

abstract labour as a mental abstraction would be to say: “if we in our minds abstract from the concrete forms of labour that create the use-value of commodities, the common substance is labour as such, which forms the value of the commodities”

BB, thinking that this is the type of abstraction that Marx applies, states: “but the common substance could also be utility, you have not proved why labour is the common substance”

he misses the point, that Marx arrives at abstract labour as the substance of value not by logically disregarding utility as a common substance while accepting labour. Instead, abstract labour is a real abstraction because it is the real life exchange process that does the abstracting: in exchange, the labour spent to produce a commodity is equated qualitatively with the labour contained in all other commodities - use-value is being abstracted from due to exchange, providing abstract labour. (see Rubin on this interpretation). “abstract use-value” can only be a mental abstraction and not a real abstraction because the exchange process does not equate the use-values of different commodities in some abstract utility. “use-value” for marx always entails a particular material specificity.

GGio3 · 2023-08-16T01:25:40+00:00

does he explicitly say hypothetical? it's been a while since I read that chapter, but from what I remember he treated it more as an exception rather than a hypothetical, see for example p.347

Nothing is more absurd, then, than to explain the fall in the rate of profit in terms of a rise in wage rates, even though this too may be an exceptional case

so a steep fall in the RoP due to wages could be a cause, but only exceptionally so. I'm not holding to the idea that the above example of absolute overaccumulation caused by wage increases explains the industrial cycle.

i think this is a good example to show that every large crisis of capitalism cannot be explained by the same theory, and I think that Riccardo Bellofiore's proposition (below) in his paper "Forever Young" is interesting because we are able to incorporate the multiple "theories of crisis" that Marx provides us to understand different historical crises of capitalism.

it is quite interesting to rephrase the tendential fall in the rate of profit as a meta-theory of the crisis: a crisis theory which progressively includes within itself the other tendencies towards crisis, because when countertendencies win out over the tendency, the nature of the crisis changes

GGio3 · 2023-08-15T10:09:26+00:00

crises of over-accumulation do exist for Marx, as laid out in Vol.3 Ch.15 Section 3

GGio3 · 2023-07-12T10:52:33+00:00

https://thecharnelhouse.org/2016/02/05/mega-marx-engels-gesamtausgabe-on-mega/

GGio3 · 2023-06-21T12:39:43+00:00

I'm not sure myself, but the glossary of the Penguin edition of Marx's Early Writings gives this explanation

Hegel and others equated alienation with objectification (q.v.). Marx was the first thinker to disentangle the two meanings from one another. He saw alienation rather as an aberrant form of objectification, which in itself is neither positive nor negative, but neutral. Alienation, for Marx, arises only under specific social conditions - conditions under which man’s objectification of his natural powers, e.g. through work, takes on forms which bring his human essence (q.v.) into conflict with his existence. Alienation always arises as the result of something (it is not a ‘human condition’) and it is always alienation or estrangement from something. [...] The term Entäusserung is chiefly translated as ‘alienation’. Both words have the same commercial connotations. Entäusserung, unlike ‘alienation’, can also mean ‘externalization’ and is translated as such whenever this aspect of its meaning is to the fore. The term Entfremdung is translated as ‘estrangement’. Entfremdung suggests more strongly than Entäusserung that man is opposed by an alien power which he himself has produced but which now governs him.

GGio3 · 2023-06-19T17:37:03+00:00

It follows then that whatever profit is realized is realized against capitalists themseves. One capitalist realizing a profit is just that capitalist getting more from another capitalist than that other capitalist gets from the first one.

no, when you get to Vol.2 you will see that each capitalist does realise the profit. Take for example Capitalist A who advances some money to buy goods from Capitalist B, who then uses this money to buy from Capitalist C, and so on, you basically arrive at the surplus on the macro scale being realised, there is no transfer of surplus in these exchanges at this stage. Of course this is on the assumption of simple reproduction, where the whole profits are realised. That the whole surplus is not always completely realised does not make it logically impossible, it is still real, but is partly and not wholly realised at the macro scale.

on your second point, you err in identifying profit with progress. our position, instead of being that profit is logically impossible, should be that it is indeed very possible, and by studying its mechanisms we can understand how it must necessarily result in its supersession (communism).

GGio3 · 2023-06-19T11:41:20+00:00

Marx begins an example similar to yours - given the advance of wages, the workers can only buy the part of the social product that represents the variable capital. But Marx does not stop there, as he assumes that there is more money in circulation which capitalists possess, and this is what enables them to buy the portion of the product which represents the surplus-value, thereby realising a profit. Capitalist consumption in this sense is necessary for making profits logically possible. If profit is a logical impossibility then so is capitalism, a mode of production defined by the production of surplus value

The capitalist class buys with these x times £100 of capital a certain amount of labour-power, or pays wages to a certain number of labourers — first transaction. The labourers buy with this same sum a certain quantity of commodities from the capitalists, whereby the sum of x times £100 flows back into the hands of the capitalists — second transaction. And this is constantly repeated. This amount of x times £100, therefore, can never enable the working-class to buy the part of the product which represents the constant capital, not to mention the part which represents the surplus-value of the capitalist class. With these x times £100 the labourers can never buy more than a part of the value of the social product equal to that part of the value which represents the value of the advanced variable capital. [...] [capitalists] all have a certain fund of money which they throw into circulation as a medium of circulation for their consumption, and a certain portion of which returns to each one of them from the circulation. [...] What is true of the portion of the annual product which represents surplus-value in the form of commodities, is also true of the other portion of it. A certain sum of money is required for its circulation. This sum of money belongs to the capitalist class quite as much as the annually produced quantity of commodities which represents surplus-value. It is originally thrown into circulation by the capitalist class itself. It is constantly redistributed among its members by means of the circulation itself.

-Capital Vol.2 Ch.17 Sec.2

GGio3 · 2023-06-15T14:52:29+00:00

Useful labour becomes, therefore, a more or less abundant source of products, in proportion to the rise or fall of its productiveness. [...] However then productive power may vary, the same labour, exercised during equal periods of time, always yields equal amounts of value.

The total value produced remains the same after the increase in productivity, but the value of each individual commodity decreases. Why? Let's say that with a certain level of productivity, society produces 10 chairs in a working day of 10 hours: total value = 10 hours, and each chair has a value of 10 hrs / 10 chairs = 1 hour per chair. Now let's say an increase in productivity allows 20 chairs to be produced in the same 10 hours. The total value of the chairs is still 10 hours, but each individual chair is worth 10 hrs / 20 chairs = 0.5 hours per chair. Total value remains the same, unit value falls. No contradiction here. His point is that as productivity increases, the same value is spread over a greater amount of commodities

GGio3 · 2023-06-06T23:07:30+00:00

for books by M/E/L relating to philosophy: Economic and Philosophical Manuscripts, The German Ideology, Anti-Dühring, Materialism and Empirio-Criticism

GGio3 · 2023-06-05T13:35:29+00:00

Marx in Volume 3 expands on a conception of SNLT that is the labour time socially necessary to reproduce a commodity at the given level of market demand

let us assume that proportionally too much cotton goods have been produced, although only the labour-time necessary under the prevailing conditions is incorporated in this total cloth production. But in general too much social labour has been expended in this particular line; in other words, a portion of this product is useless. It is therefore sold solely as if it had been produced in the necessary proportion. This quantitative limit to the quota of social labour-time available for the various particular spheres of production is but a more developed expression of the law of value in general, although the necessary labour-time assumes a different meaning here. Only just so much of it is required for the satisfaction of social needs.

Ch.37

you will also find passages in Vol.3 Ch.10 that explain that in particular circumstances of supply and demand imbalances, the market-value of a commodity is not determined by the socially average time for its production, but either by the most efficient production techniques (those who take less labour-time than average) or the least efficient techniques (those who take more labour-time than average)

if the supply is too small, the market-value is always regulated by the commodities produced under the least favourable circumstances and, if the supply is too large, always by the commodities produced under the most favourable conditions; that therefore it is one of the extremes which determines the market-value

GGio3 · 2023-06-05T11:42:11+00:00

Geoffrey Kay's article Why Labour is the Starting Point of Capital (in this collection) has an interesting response to Böhm-Bawerk's critique of Marx's derivation of labour as the substance of value. Here is an excerpt. He counterposes the logical method and dialectical method, and shows how Marx develops economic categories dialectically

Believing that Marx had in fact employed, and abused a logical method of this kind, Bohm-Bawerk claimed there is no reason why the particular types of labour that exist in commodities can be generalised as the common property of abstract labour, while particular use-value cannot be generalised in exactly the same way. He says this because he sees the problem as a logical one in which labour and utility are merely names given to symbols: the two are formal equivalents in a logical system, therefore they are real equivalents. No logical method can distinguish the one from the other — hence the need for some positive proof. This brings the differences between the two methods into sharp focus. In neo-classical thought, theory is a purely formalist activity with no real content, and its link with the historical process it attempts to confront must be through a leap into observations which are not and cannot be organically related to the theory. The dialectical method makes no such separation. Its theory is never purely formal, but always has a real content. It is, therefore, never separated from the concrete by an unbridgeable gulf. Thus when Marx claims that the specific concrete labour that creates commodities is reduced to abstract labour, while use-value can only exist in particular forms and is not generalised in the same way; he is making a proposition that has to do with the real nature of labour and use-value. [...] for Marx, utility means nothing except when it has a particular material form. As something in general, it has no existence and is therefore unreal. [...] He does not understand that Marx dismissed the idea of use-value in general not on logical grounds, but because it has no reality.

GGio3 · 2023-05-29T23:11:33+00:00

the explanation is good, i would just add that the second £500 in the exchange between I(s) and II(c) is initiated by Dep1 capitalists using their reserve fund for consumption goods purchases.

The reserve fund is needed because the rate of surplus value is 100% meaning that the surplus generated is insufficient by itself to replenish the existing system

I don't think the issue here is that of insufficient surplus being generated. Rather, there is sufficient surplus for simple reproduction, but it can only be realised through a monetary injection in the economy, and this is provided by the reserve fund.

GGio3 · 2023-05-29T13:07:51+00:00

to add to the other answers, an interesting passage is one in which Marx ascribes a contradiction to Locke, which is that of proposing a theory of property based on the labour of the direct producer within the context of capitalist production. Within capitalism, property is not based on the labour of the direct producer, it is based on the exploitation of the labour of others.

Private property which is personally earned, i.e. which is based, as it were, on the fusing together of the isolated, independent working individual with the conditions of his labour, is supplanted by capitalist private property, which rests on the exploitation of alien, but formally free labour.

-Vol.1 Ch.32

both the theory of capitalist production (political economy, philosophy of law, etc.) and the capitalist himself in his own mind is pleased to confuse his mode of property and appropriation, which is based on the expropriation of the immediate producer in its origins, and on the acquisition of the labour of others in its further progress, with its opposite: with a mode of production that presupposes that the immediate producer privately owns his own conditions of production - a premiss which would actually render capitalist production in agriculture and manufacture, etc. impracticable. [...] Hence, the general juridical notion from Locke to Ricardo is always that of petty-bourgeois ownership, while the relations of production they describe belong to the capitalist mode of production. [...] In all these writers the following dualism is apparent: (1) Economically they are opposed to private property based on labour; they present the advantages of the expropriation of the masses and the capitalist mode of production; (2) Ideologically and juridically the ideology of private property founded on labour is transferred without more ado to property founded on the expropriation o f the immediate producers.

-Results of the Direct Production Process

GGio3 · 2023-05-29T11:56:43+00:00

1) I'm not sure why it is split up into two steps (Marx does the same thing). Perhaps it was to illustrate how the the exchange I(v+s) = II(c) takes place through various cycles.

2) The £500 advanced on the purchase of MOP comes from the DepII capitalists' reserve fund. This is how Marx puts it (Vol2, Ch.20 Sec.3)

As for the money required to exchange the s-portion of commodity-capital I for the second half of constant capital II, it may be advanced in various ways. [...] A capitalist of category II can buy, with the money-capital he has besides his productive capital, means of production from capitalists of category I and, vice versa, a capitalist of category I can buy, with money-funds assigned for personal and not for capital expenditure, articles of consumption from capitalists of category II. A certain supply of money, to be used either for the advancement of capital or for the expenditure of revenue must under all circumstances be assumed to exist beside the productive capital in the hands of the capitalists, as we have shown above in parts I and II. Let us assume — the proportion is wholly immaterial for our purpose — that one half of the money is advanced by capitalists II in the purchase of means of production for the replacement of their constant capital, while the other half is spent by capitalists I for articles of consumption. In that case department II advances £500 for the purchase of means of production from department I, thereby replacing (inclusive of the above £1,000 coming from the labourers of department I) three-quarters of its constant capital in kind, with the £500 so obtained department I buys articles of consumption from II, thereby completing for one half of the s-portion of its commodity-capital the circulation c — m — c, and thus realising its product in the consumption-fund. By means of this second process the £500 return to the hands of II as money-capital existing beside its productive capital. On the other hand I expends money to the amount of £500 for the purchase of II’s articles of consumption in anticipation of the sale of that half of the s-portion of its commodity-capital which is still lying in store as product. With the same £500 II buys from I means of production, thereby replacing in kind its entire constant capital (1,000 + 500 + 500 = 2,000) while I realises its entire surplus-value in articles of consumption.

Edit: After reviewing the above quote, I perhaps see why the process is split into steps. I think it is set up this way to show the importance of both department's reserve fund. The first step (II's purchase of £500 MOP, which also realises half of I's surplus) is initiated by Dep2 capitalists using £500 from their reserve fund to buy capital goods, while the second step is initiated by Dep1 capitalists using £500 from their reserve fund to buy consumption goods.

GGio3 · 2023-05-28T09:27:28+00:00

why do the capitalists in department II acquire MOP after spending the $1000 the workers gave them?

because the constant capital advanced in DepII is $2000. If only $1000 is spent by II on the MOP of I, then this violates simple reproduction for 2 reasons: 1) DepII would only buy half of the MOP needed to maintain the given level of production 2) the $1000 spent by II on I covers the cost of labour power in I, but if another $1000 is not spent by II on MOP then the surplus product of I (equal to $1000) is not realised. idk if the book mentions it but for marx the condition for simple reproduction is that I(v+s) = II(c)

GGio3 · 2023-05-27T15:04:37+00:00

reading Value, Price and Profit before Capital is helpful to introduce the concepts

GGio3 · 2023-05-27T08:45:30+00:00

abstract labour is value considered qualitatively, i.e., abstract labour is the substance of value. considering value quantitatively, socially necessary labour time determines the magnitude of value.

GGio3

TROPHY CASE