All Value-Form, No Value-Substance: Comments on Moseley’s New Book, Part 8

by Andrew Kliman

Here is the eighth installment of “All Value-Form, No Value-Substance,” the series of comments I’m writing on Fred Moseley’s new book, Money and Totality: A Macro-Monetary Interpretation of Marx’s Logic in Capital and the End of the “Transformation Problem.” It responds to Moseley’s replies to the seventh installment.

I’m pleased to announce that we may be seeing the first step of forward movement in the debate.

Here are the first installment, published on May 11,

the second installment, published on May 12,

the third installment, published on June 6,

the fourth installment, published on July 14,

the fifth installment, published on July 23,

the sixth installment, published on July 25, and

the seventh installment, published on August 2.

2 Comments

  1. First a clarification: I did not acknowledge in my last comment that “[my] equalized rate of profit is quantitatively equal to the physical rate of profit”. Rather, I acknowledged that IF the rate of profit is determined by given physical quantities, then there is only one possible rate of profit. However, I argued further that according to my interpretation of Marx’s theory, the rate of profit is NOT determined by given physical quantities, but is instead determined by given quantities of money capital and labor. And this *different theory* of the rate of profit leads to different conclusions.

    In the section on “full automation” in his Part 8, Kliman argued that I “need to prove that there can be a physical surplus in this case [his example]. He simply assumes it.”

    But my argument about full automation is not based on Kliman’s example. My argument is based on the well-known result in Sraffian theory that, if there is a physical surplus-value, then the rate of profit will be positive (e.g. Steedman, “Robots and Capitalism”, New Left Review, 1985).

    In my interpretation of Marx’s theory, on the other hand, as derived algebraically in Chapter 2 of my book, S = m (SL), and if SL = 0, then S = 0 and the rate of profit = S/(C+V) = 0, even if there is a physical surplus-value. This is a clear and definite difference between Sraffian theory of the rate of profit and my interpretation of Marx’s theory of the rate of profit.

    Kliman did not respond in his Part 8 to the other important examples that I have discussed and that show that my interpretation of Marx’s theory leads to a different rate of profit than Sraffian theory: labor-saving technological change and luxury goods. Again my arguments on these points are based on well-known general results (e.g. the Okishio theorem) and are not based on Kliman’s numerical examples.

    In the section on the “general case”, Kliman argued that his table on the bottom of p. 4 of his Part 8 is in terms of given quantities of money capital and labor, as in my interpretation. But that is not true. This table is the same table that was on the bottom of p. 8 of his Part 7, and the monetary quantities in that table in Part 7 were derived (as Kliman explained at the bottom of p. 8) from the given physical quantities in the table on the top of p. 7 of Part 7 and unit prices that are consistent with these given physical quantities, as follows:
    I/O coefficients
    C21 = 8p2 = 8(3) = 24 a21 = 8/10 = .8
    C12 = 4p1 = 4(3) = 12 a12 = 4/10 = .4
    V21 = 1p2 = 1(3) = 3 b21 = 1/10 = .1
    V22 = 5p1 = 5(3) = 15 b22 = 5/10 = .5
    P1 = 10p1 = 10(3) = 30 all other = 0
    P2 = 10p3 = 10(3) = 30.
    Since these monetary quantities are derived from physical quantities, it is no surprise that the rate of profit calculated from the monetary quantities is the same as the rate of profit determined by the physical quantities and the physical input-output coefficients.

    But that is not my interpretation. My interpretation is in terms of monetary quantities that are *taken as given directly*, as quantities of money capital advanced to purchase means of production and labor-power, and not derived from given physical quantities.

    Kliman then goes in the opposite logical direction and derives input-output coefficients from the monetary quantities he has derived as above and it is not surprising that he ends up with are the *same input-out coefficients that he started with* on p. 7 of Part 7 (see above), except for additional unit price ratios that cancel out because p1 = p2:
    a21 = .8
    a12 = .4
    b21 = .1
    b22 = .5
    all other = 0

    Kliman’s equation for the determination of the rate of profit by physical input-output coefficients at the bottom of p. 4 of Part 8 is the *same equation he started with* on the bottom of p. 7 of Part 7.

    Thus Kliman argues in a circle and proves nothing about my interpretation of Marx’s theory.

    Finally, Kliman’s representation of “Moseley’s prices of production” on p. 13 of Part 8 in fact assumes the *opposite relation of causation* between the rate of profit and prices of production compared to my interpretation.

    According to my interpretation of Marx’s theory, prices of production are determined by following equation:
    Pi = (Ci + Vi) (1 + R)
    Ci and Vi are taken as given as quantities of money capital advanced to purchase means of production and labor-power. R is the general rate of profit and it is *not determined by this equation*, but is instead an *exogenous given* in this equation, as determined by the prior theory of the total surplus-value in Volume 1:
    R = S / (C+V) where S = m (SL)
    Thus, the logical sequence of my interpretation of Marx’s theory of the rate of profit and prices of production is as follows:
    SL → S → R → Pi. Prices of production determined in this way obviously equalize the rate of profit across industries.

    By contrast, Kliman’s numerical example on p. 13 *reverses the relation of causation* between the rate of profit and prices of production, in the following way:

    Kliman’s representation of my interpretation first determines prices of production by the product of given physical quantities and unit prices.
    Pi = pi Qi
    e.g. P1 = 5 (10) = 50
    Then the amount of profit in each sector is *derived from the predetermined Pi* as follows:
    πi = Pi – (Ci + Vi)
    π1= 50 – (24 + 3) = 23
    And then the rate of profit in each sector is determined by:
    ri = πi / (Ci + Vi)
    r1 = 23 / 27 = .85

    Thus Kliman’s logical sequence is: pi Qi → Pi → πi → ri
    which is the *opposite relation of causation* between the rate of profit and prices of production compared to my interpretation of Marx’s theory.

    Therefore, Kliman’s numerical example does not apply to my interpretation of Marx’s theory.

    Fred Moseley

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