TITLE:
On the Exposition of the Transformation of Commodity-Values into Production Prices in the Third Volume of Capital—A Textual Analysis
AUTHORS:
Jørgen Sandemose
KEYWORDS:
Values, Prices, Transformation, Organic Composition, Weighted Average, Scientific Method
JOURNAL NAME:
Theoretical Economics Letters,
Vol.6 No.5,
September
20,
2016
ABSTRACT: The article is about the exposition of the Karl
Marx’s concept of production prices in his main work Capital. It focuses on the structure of the central text in
question, Chapter 9 of the third volume, on “transformation [Verwandlung] of
commodity-values into production prices”. The actual content and structure of
the chapter has to some degree been overlooked or distorted in the literature.
The aim of the article is to establish (or re-establish) a sound view of the
chapter, freed from prejudices nurtured by—especially—a theory of price
formation which, albeit “modernized” by i.a. Walras, dates back to Steuart and
Ricardo. These prejudices have had an immense significance for
misunderstandings of the Marxian theory of measure of value and standard of
prices reflected in the text of the chapter mentioned. For this reason, the
article is furnished with an Appendix, underlining the difficult situation for
Marxist-minded research today. It should be noted that it is not an objective
of the article to discuss any extant interpretation of Marx’s exposition.
However, the paradigm of criticism that was introduced early in the 20th century by Ladislaus von Bortkiewicz is used as a perspective. Specific
references—other than to Marx’s own texts—are held at a minimum in the article
proper. I have chosen such a mode of approach because I find that
misunderstandings of the chapter are evenly distributed among authors
regardless of how their views on the “transformation” collide. On the other
hand, such a consciousness of “misunderstandings” among commentators certainly
does imply that the author should at least shortly clarify his own view of the
main problems in the paradigmatic criticism mentioned above. In the first section, I point out the
importance of Marx’s way of presenting his concept of the composition of capital. In the
next, I make some remarks on the concept of the socially necessary labour time
and its relation to abstract labour. In the third and fourth, I investigate
Marx’s different models of analysis. In the fifth section, it will be shown how
Marx, contrary to contentions of traditional criticism, but in harmony with his
treatment of the capital composition and necessary labour time, is operating with a double
point of departure: He treats the inputs of a production period as given as
values, i.e. as individual use value-entities; paralleling this, he
treats them as transformed to production prices. There follows a sixth section,
where I point out the core of the critique that Bortkiewicz presented of the chapter,
focusing on the need for a uniform expression of economic denominations. Since
Bortkiewicz’s criticism contained all the important germs to the objections
against Marx refuted in my article, this section also serves to spread light
over the rest of my argument. After the overview mentioned above, I round off
with a summary.