Sunday, 1 October 2017

Theories of Surplus Value, Part II, Chapter 8 - Part 34

Given that not only did Marx not have the analytical tools to make such calculations, but that such an exposition, whilst being closer to reality, adds in additional layers of complexity, more relevant to the analysis of competition that Marx had planned for later, it's clear why he kept his exposition at this stage at the simpler level.

That also has the advantage of demonstrating more clearly the extent to which all capitals share in the single reservoir of surplus value produced by the total social capital. Having set out that ryder, I return, therefore, to Marx's own exposition.

On that basis, if £1,000 of capital is advanced in each sphere to obtain the average profit of 20%, each must sell their output for £1200, which means that some will obtain more profit than the surplus value they produce, and some less. Marx describes this in the following table.

Value of Product
Average price
[Relation of average price to value]
Relation of profit to surplus-value in per cent
Calculated Profit
Excess of average price over value 100
Excess of profit over surplus-value 100 per cent
Value equal to price 0
Decrease in average price below value 100
Decrease in profit below surplus-value 331/3 per cent
Excess of price over value 50
Excess of profit over surplus-value 331/3 per cent
Excess of value over price 50
Excess of surplus-value over profit 25 per cent. Decrease in profit below surplus-value 20 per cent

Marx's purpose in setting all this out was to pose the question for Rodbertus of why this reallocation of capital, increasing supply and reducing average price in one sphere, whilst reducing supply and raising average prices in others did not apply to agriculture.

Even if Rodbertus' arguments, as to why the rate of profit, in agriculture, was higher were correct, which they were not, the question would still then have been why does not capital then migrate to agriculture, in search of this higher rate of profit, and thereby drive down the average price of agricultural products, so as to equalise the rate of profit?

“What Herr Rodbertus had to explain was, why this [is] not the case in agriculture, hence [why] its commodities should be sold at their value and not their average price. 

Competition brings about the equalisation of profits, i.e., the reduction of the values of the commodities to average prices.” (p 69)

Incidentally, this makes clear that, in contradiction to the claims of the Temporal Single System Interpretation, Marx did believe that this process of the actual transformation of exchange-values into prices does and must occur as an actual process that plays out as a result of this movement of capital from one sphere to another, as individual capitals compete to obtain the higher rates of profit.  Consequently, at any one time there is not one single system of prices, but several.  Some commodities, for example, agricultural products, minerals and other produce from the land, continue to sell at exchange values rather than prices of production; some commodities sell at modified exchange values, because non-capitalist producers continue to sell at exchange values, but some of their inputs are the products of capitalist production, which are themselves sold at prices of production; some commodities are new commodities, or commodities where various frictions prevent capital having yet migrated to these areas in sufficient quantity so as to raise their supply, and push down prices to the price of production; and because new spheres of production, and changes in social productivity constantly change all these moving parts, all of these different conditions constantly exist.

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