conversations.from: human
conversations.value: What could be a title for a book about Karl, Marx, Marxist with the genre: Politics & Social Sciences, Politics & Government?
conversations.from: assistant
conversations.value: A title for this book could be 'Karl Marx and the Close of His System'
conversations.from: human
conversations.value: What is the first four paragraphs for this book?
conversations.from: assistant
conversations.value: Karl Marx and the Close of His System
  The capital advanced for the production of a commodity constitutes the cost price of this commodity. "The cost price [= c + v] does not show the distinction between variable and constant capital to the capitalist. A commodity, for which he must advance £ 100 in production, costs him the same amount whether he invests 90c + 10v, or 10c + 90V. He always spends £100 for it, no more no less. The cost prices are the same for investment of the same amounts of capital in different spheres, no matter how much the produced values and surplus values may differ. The equality of cost prices is the basis for the competition of the invested capitals, by which an average rate of profit is brought about."2
  To elucidate the working of capitalist competition Marx presents the following table, wherein the rates of surplus value  are assumed to be identical, while as regards the constant capital varying proportions are incorporated into the product according as the wear and tear varies.
  In this table we see five instances in which the total capital is identical, and in which the degree of exploitation of labor is the same in every case, but the rates of profit vary widely, according to the differing organic composition. Let us now look upon these capitals, invested in various fields, as a single capital, of which numbers I to V merely constitute component parts (more or less analogous to the different departments of a cotton mill which has different proportions of constant and of variable capital in its carding, preparatory spinning, spinning, and weaving rooms, on the basis of which the average proportion for the whole factory is calculated), then we should have a total capital of 500, a surplus value of no, and a total value of commodities of 610. The average composition of the capital would be 500, made up of 390c and 110v, or in percentages, 78c and 22V. If each of the capitals of 100 were to be regarded simply as one fifth of the total capital, the average composition of each portion would be 78c and 22V, and in like manner to each 100 of capital would be allotted a mean surplus value of 22, so that the mean rate of profit would be 22 percent. The commodities must, then, be sold as follows:
  The commodities are thus sold at 2 + 7 + 17 = 26 above, and 8 + 18 = 26 below, their value, so that the deviations of prices from values mutually balance one another by the uniform distribution of the surplus value, or by the addition of the average profit of 22 percent of advanced capital to the respective cost prices of the commodities of I to V. One portion of the commodities is sold in the same proportion above in which the other is sold below value. Only the sale of the commodities at such prices renders it possible that the rate of profit for all five capitals shall uniformly be 22 percent, without regard to the organic composition of these capitals.
conversations.from: human
conversations.value: Delete the last sentence.
conversations.from: assistant
conversations.value: Karl Marx and the Close of His System
  The capital advanced for the production of a commodity constitutes the cost price of this commodity. "The cost price [= c + v] does not show the distinction between variable and constant capital to the capitalist. A commodity, for which he must advance £ 100 in production, costs him the same amount whether he invests 90c + 10v, or 10c + 90V. He always spends £100 for it, no more no less. The cost prices are the same for investment of the same amounts of capital in different spheres, no matter how much the produced values and surplus values may differ. The equality of cost prices is the basis for the competition of the invested capitals, by which an average rate of profit is brought about."2
  To elucidate the working of capitalist competition Marx presents the following table, wherein the rates of surplus value  are assumed to be identical, while as regards the constant capital varying proportions are incorporated into the product according as the wear and tear varies.
  In this table we see five instances in which the total capital is identical, and in which the degree of exploitation of labor is the same in every case, but the rates of profit vary widely, according to the differing organic composition. Let us now look upon these capitals, invested in various fields, as a single capital, of which numbers I to V merely constitute component parts (more or less analogous to the different departments of a cotton mill which has different proportions of constant and of variable capital in its carding, preparatory spinning, spinning, and weaving rooms, on the basis of which the average proportion for the whole factory is calculated), then we should have a total capital of 500, a surplus value of no, and a total value of commodities of 610. The average composition of the capital would be 500, made up of 390c and 110v, or in percentages, 78c and 22V. If each of the capitals of 100 were to be regarded simply as one fifth of the total capital, the average composition of each portion would be 78c and 22V, and in like manner to each 100 of capital would be allotted a mean surplus value of 22, so that the mean rate of profit would be 22 percent. The commodities must, then, be sold as follows:
  The commodities are thus sold at 2 + 7 + 17 = 26 above, and 8 + 18 = 26 below, their value, so that the deviations of prices from values mutually balance one another by the uniform distribution of the surplus value, or by the addition of the average profit of 22 percent of advanced capital to the respective cost prices of the commodities of I to V. One portion of the commodities is sold in the same proportion above in which the other is sold below value.
conversations.from: human
conversations.value: What is four more paragraphs?
conversations.from: assistant
conversations.value: Tugan-Baranowsky provides an exception in this respect.2 He has shown specifically that the way Marx calculates the average rate of profit is not valid. Moreover, Tugan-Baranowsky has pointed out how with given prices of production and a given average rate of profit it is possible to calculate correctly the corresponding values and the rate of surplus value. In this case there is posed a problem which is the opposite of that which Marx tried to solve.
  It is nevertheless interesting to show that Marx erred, and in what way, without reversing his way of posing the problem. For this purpose, it will be convenient, in order not to complicate the presentation, to introduce the same limiting assumption which Tugan-Baranowsky made use of, namely, that the entire advanced capital (including the constant capital) turns over once a year and reappears again in the value or the price of the annual product.1 Insofar as it is a question of demonstrating Marx's errors it is quite unobjectionable to work with limiting assumptions of this kind, since what does not hold in the special case cannot claim general validity.
  In still another respect the procedure followed here agrees with that of Tugan-B aranowsky. The different spheres of production from which Marx composes social production as a whole can be put together into three departments of production. In Department I means of production are produced, in Department II workers' consumption goods, and in Department III capitalists' consumption goods. At the same time we shall assume that in the production of all three groups of means of production, that is, those which are used respectively in Departments I, II, and III--the organic composition of capital is the same.
  Let c1, c2, c3 stand for the constant capital, v1, v2, v3 for the variable capital, and s2, s2, s3 for the surplus value in Departments I, II, and III respectively. The conditions of simple reproduction are expressed in the following system of equations:
conversations.from: human
conversations.value: Swap the first and the last sentence.
conversations.from: assistant
conversations.value: The conditions of simple reproduction are expressed in the following system of equations:.2 He has shown specifically that the way Marx calculates the average rate of profit is not valid. Moreover, Tugan-Baranowsky has pointed out how with given prices of production and a given average rate of profit it is possible to calculate correctly the corresponding values and the rate of surplus value. In this case there is posed a problem which is the opposite of that which Marx tried to solve.
  It is nevertheless interesting to show that Marx erred, and in what way, without reversing his way of posing the problem. For this purpose, it will be convenient, in order not to complicate the presentation, to introduce the same limiting assumption which Tugan-Baranowsky made use of, namely, that the entire advanced capital (including the constant capital) turns over once a year and reappears again in the value or the price of the annual product.1 Insofar as it is a question of demonstrating Marx's errors it is quite unobjectionable to work with limiting assumptions of this kind, since what does not hold in the special case cannot claim general validity.
  In still another respect the procedure followed here agrees with that of Tugan-B aranowsky. The different spheres of production from which Marx composes social production as a whole can be put together into three departments of production. In Department I means of production are produced, in Department II workers' consumption goods, and in Department III capitalists' consumption goods. At the same time we shall assume that in the production of all three groups of means of production, that is, those which are used respectively in Departments I, II, and III--the organic composition of capital is the same.
  Let c1, c2, c3 stand for the constant capital, v1, v2, v3 for the variable capital, and s2, s2, s3 for the surplus value in Departments I, II, and III respectively.Tugan-Baranowsky provides an exception in this respect.
conversations.from: human
conversations.value: What is the last four paragraphs?
conversations.from: assistant
conversations.value: In one example,1 r (the rate of surplus value) falls from 1 to , while at the same time q0 increases from ⅔ to , from which it emerges, entirely in keeping with formula (27), that ρ (the rate of profit) declines from ⅓ to 2
  In the other example,3 r rises from 1 to , while at the same time q0 increases from ⅔ to , from which, once again in keeping with formula (27), ρ increases from ⅓ to.
  Tugan-Baranowsky concludes from the fact that in the one case a growth in the share of constant capital accompanies a fall and in the other case a rise in the rate of profit, that the general rate of profit is entirely independent of the organic composition of the social capital, and that therefore the Marxian theory of profit is false.1
  As though such numerical examples could in any way touch the Marxian theory of the influence of the organic composition of the total social capital on the rate of profit! According to Marx, this influence makes itself felt in the indicated way only if the rate of surplus value remains unchanged.2