Monday, 12 December 2016

Capital III, Engels Supplement - Part 1

In the Preface to Volume III, Engels described some of the controversy that had surrounded the publication of Volume I and II of Capital, and the question, in particular, of the transformation of exchange values into prices of production. In his Supplement, at the end of Volume III, he refers again to some of the responses to Marx's resolution of that particular question.

He also deals with criticism that, given the fact that Marx had only left fairly rough drafts, in his manuscripts for Volume III, Engels should have put them together in a more polished and finished work, rather than sticking to a presentation of Marx's own rough hewn material. To have done so, Engels argues, would have been to have done a great disservice to his close friend, and to such a great mind, not to have presented Marx's own words to the public.

In any case, Engels argues, the first time some controversy over a part of the work arose, it would be inevitable that recourse would have to be taken to Marx’s manuscripts. Engels was right. In fact, even having presented Marx's own words, in that way, has not prevented such controversies occurring up to the present day.

Engels comments that there were more important things that had occurred between 1865, when most of the material in the manuscript was written, and 1895, when he was writing his Supplement. Included in that was the controversy over The Law of Value, and The Rate of Profit, a controversy that again continues today, despite Marx's own clarification of what he meant by value, and The Law of Value, for example, in his letter to Kugelmann, and Engels' elaboration here and elsewhere.

The Law of Value and Rate of Profit

Engels begins by examining some of the responses to Marx’s resolution of the apparent contradiction between the exchange of commodities, determined by exchange values, and ultimately, therefore, The Law of Value, and their actual exchange, under capitalism, at market prices which differ from those values.

As a foil, Engels puts up the Italian economist, Achille Loria, who had come in for scorn from Engels previously, for having claimed that Marx could not resolve the contradiction, and never had any intention of publishing further volumes of Capital, after Volume I. Loria had also claimed that Marx was not the originator of the theory of historical materialism, but had plagiarised it from others going back to Aristotle.

Marx's critics divided in their response to his solution to the problem into those who expected some radical, almost magical solution, and those like Loria, who expected no solution. The actual solution, therefore, frustrated both these groups, as it was a simple, logical explanation that demonstrates both logically and historically how products become transformed into commodities, and in the same process values take the form of exchange values, and under capitalism, competition brings about a reallocation of capital to where it can make the highest rate of profit, and thereby, through changes in the level of supply, brings about the establishment of prices of production, around which revolve market prices.

For Loria, the solution was tantamount to an admission of defeat and intellectual bankruptcy, by Marx, because, he argued, it left Marx facing two ways, claiming that it is value that determines the ratio in which commodities exchange, but then also stating that they do not exchange at these values, but at totally different prices.

Marx's argument, that the total of exchange values amounts to the total of prices of production also does not satisfy Loria, because he argues value is nothing more than the rate at which one commodity exchanges for another, so “the very concept of total value is an absurdity.” In fact, Loria claimed commodities never had exchanged at their values.

Its amazing how little things change in many ways, even if the means of communication is transformed. Loria is very reminiscent of those Internet trolls who frequent various Marxist websites and whose strident tones in attacking others rises in proportion to their own ignorance and lack of understanding of Marxist concepts.

Forward To Part 2

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