Tag Archives: labor theory of value

Das Kapital vol.3 Chapter 9: Formation of a General Rate of Profit (Average Rate of Profit) and Transformation of the Values of Commodities into Prices of Production

In all of the consternation, debate and quarreling over Marx’s value theory this chapter, chapter 9 of volume 3, lies in the center of much of that (though perhaps chapter 10 even more so). Continue reading

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Rethinking Marxism: Temporal Value Theory in a Moment of Crisis; Roundtable on the Economic Crisis

This is video from a roundtable on the economic crisis held during this year’s Rethinking Marxism conference in Amherst Mass. Each panelist’s presentation stands on its own so they need not be viewed in any specific order. A brief bio proceeds each video as well as my own short summary of their argument. This is merely to help viewers decide what to watch and to give some brief context for the uninitated. Continue reading

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Crisis, Value and Marx’s “Order of Operations”

Abstract:
An economic crisis manifests itself in many different forms simultaneously: stock market crashes, housing market crashes, over capacity, unemployment, etc. For every aspect of the crisis there is some theorist who mistakes this surface appearance for the inner mechanism of crisis. But a proper analysis of crisis needs to have some reason for selecting some phenomena as causes and others as effects. There must be a proper ordering of the relations between different economic factors in order for our analysis to avoid being arbitrary and piecemeal. Marx gives us a very clear, though complex, ordering of these relations. Interestingly enough the misunderstanding of Marx’s method, of the proper relation between different aspects of his value theory, is also one of the main reasons that many have dismissed the labor theory of value and Marx’s theory of crisis in the first place. This paper will seek to explain and defend Marx’s “order of operations” in hopes that this can shed valuable light onto what exactly differentiates Marx’s theory of capitalism from others. Continue reading

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Das Kapital vol. 3 Part 2 chapter 8 Different Compositions of Capitals in Different Branches of Production and Resulting Differences in Rates of Profit

“…differences in the average rate of profit in the various branches of industry do not exist in reality, and could not exist without abolishing the entire system of capitalist production. It would seem, therefore, that here the theory of value is incompatible with the actual process, incompatible with the real phenomena of production, and that for this reason any attempt to understand these phenomena should be given up.” Continue reading

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Das Kapital vol. 3 Part 2- opening thoughts

Herein lies theoretical ideas that have been hotly debated for well over a century now. Up until now we have assumed that price equals value and that profit is directly related to the amount of surplus value produced. But now, 140 pages into the 3rd volume of Kapital Marx explains that in conditions of capitalist competition prices don’t equal values and that profit is not determined by the surplus value produced by a firm. This has raised all manner of criticism and even ridicule from some corners. Bohm Bawerk made much of this in his criticism of Marx. Continue reading

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Das Kapital vol. 3 part 1 chapter 7: Supplementary Remarks

….Therefore it is easy to confuse the value-creating powers of labor with the subjective valuations that happen in exchange. We have seen, throughout these opening chapters, how that profit comes wholly from surplus value. Yet the rate of profit is modified by a variety of other factors like changes in the value of constant capital, turnover time, changes in value of labor power, etc. This is one more way in which we confuse these changes for the cause of value. We might notice that increased turnover time increases profit but this doesn’t mean that time itself creates value. We might notice that a decrease in constant capital costs causes profits to rise. But this doesn’t mean that constant capital is creating more value. Continue reading

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Part 1 chapter 5 Economy in Employment of Constant Capital

Marx begins by explaining that a rise in absolute surplus value will always raise the rate or profit. Remember that a change in absolute surplus value means a rise or fall in the total amount of surplus value, not a change in the rate of surplus value. A capitalist increases absolute surplus value by lengthening the working day or hiring more workers. This increases both v and s in the same proportion. Continue reading

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Das Kapital vol.3 part 1, chapter 4: The Effect of Turnover on the Rate of Profit

This chapter is written entirely by Engels. According to Engels all Marx had completed for this chapter was the title.

Turnover time does not effect any of the basic observations about the rate of profit which we have already made. But it does alter the speed at which profits are made, thus effecting the rate of profit. While this may not be the most exciting chapter ever written there are some important concepts here. Most importantly, the faster the turnover time the higher the rate of profit. This means that capital has a marked tendency to decrease the turnover time both in production and circulation. Continue reading

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Das Kapital vol.3 part1, chapter 3: The Relation of the Rate of Profit to the Rate of Surplus Value

Before we can examine the formation of a general rate of profit and the way this causes prices to diverge from values we have more examining to do of this equation for the rate of profit: s/(v+c). Continue reading

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Das Kapital vol.3 Part 1 Chapter 2: The Rate of Profit

The summary which begins Chapter Two serves not only to remind us of some important details about the way in which value is produced but also ties together several details that will be essential for understanding our analysis of the law of value in the context of competing capitals. We are reminded first that surplus value is created in production but only realized in circulation. This is a crucial point as it really helps delineate the essential contours of Marx’s argument. The world of appearance is dominated by fetishism. We think that the coercive and tantalizing power of the market, that value, is manifest in commodities themselves as a result of their specific properties. We think that capital itself creates value. And we think that the process of exchange itself can create a profit. Continue reading

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