ArticlePDF Available

A Note on Marx's Analysis of the Composition of Capital

Authors:

Abstract

Saad-Filho draws on Marx to make clear that there are three distinct compositions of capital: Technical (TCC); Value (VCC); and Organic (OCC). He demonstrates that the distinction between them can be traced back to the relations between the spheres of production and circulation, and argues that it is central for an analysis of capital accumulation and technical change based on the labour theory of value.
Saad-Filho draws on
Marx to make clear
that there are three
distinct compositions
of capital: Technical
(
TCC); Value (VCC);
and Organic (
OCC).
He demonstrates
that the distinction
between them can be
traced back to the
relations between the
spheres of production
and circulation, and
argues that it is
central for an analysis
of capital accumula-
tion and technical
change based on the
labour theory of
value.
Alfredo Saad-Filho
A Note on Marx’s
Analysis of the
Composition of Capital
Marxs innovative approach to scientific analysis led him
to introduce several new concepts into the economic literature
of his time and to attribute a distinctive significance to many
already-known categories, which he felt would be relevant to a
critical understanding of the capitalist mode of production.
However, the unfinished status of many of his works,
1
and the
complexity of his method, make the meaning of several of his
concepts and categories far from obvious. Their role in Marxs
investigation of capitalism is discussed in a vast body of
literature and a number of polemics, both of which consider-
ably increase our understanding of Marxian economics and
the objects of its critical inquiry. The controversy about the
nature of value is probably the best-known case, although
debates concerning abstract labour, money, price of
production, rent, the rate of profit and its tendency to fall,
among others, are also prominent. In this article, I am
concerned with the concept of composition of capital.
Although several interpretations of Marxs notion of
composition of capital exist in the literature, its complexity
and relevance have not always been fully recognised. It is an
127
128 Capital & Class
50
extremely important concept, because it is central in some of
Marxs most relevant and polemical analyses. The concept of
composition of capital is essential, for example, to the
discussion of the use of machines in industry and accumula-
tion of capital, the transformation of values into prices of
production, the law of the tendency of the rate of profit to fall,
and the distinction between the various types of rent.
Widely different understandings of the composition of
capital found in the literature may, at least partly, result from
Marxs use of three forms of the concept: the technical
composition of capital (TCC), the organic composition of
capital (OCC) and the value composition of capital (VCC).
While the content of each term is quite evident at times, there
are moments when he seems to use them randomly or even in
a contradictory way; as a consequence, large parts of his
inquiry may look arbitrary and puzzling. A brief review of
differing views of the composition of capital may give a better
idea of the difficulties involved in our study.
Paul Sweezy (1968), for example, believes that the
composition of capital is the relation of constant (c) to
variable capital (v) in the total capital used in production. For
him, although ‘[s]everal ratios would serve to indicate this
relation, …the one which seems most convenient is the ratio
of constant capital to total capital’ (p.66). Thus, he defined
the OCC as q = c/(c+v), a formulation also adopted by Seton
(1957) and Desai (1989). Moreover, in his discussion of the
transformation problem Sweezy follows Bortkiewicz’s
treatment and, as may be gathered from our discussion below,
attributes the different sectoral rates of profit to their distinct
value and not organic compositions of capital, which is
contrary to Marxs argument.
Michio Morishima (1973) is closer to the mark in his
understanding of the TCC and the VCC, but misinterprets the
OCC by defining it as the name Marx would have given to
the VCC, in case the TCC underwent changes such that all
relative values were left unaltered (in other words, for him
OCC is the name of the VCC when the changes in the TCC
are precisely reflected by changes in the VCC —as if
productivity increase is proportionate across all sectors).
Morishima believes that Marx only defined the OCC to
simplify his treatment of technical changes, but it will be
shown here that this is incorrect.
A note on Marx’s analysis of the composition of capital 129
Nobuo Okishio (1974), who elsewhere formalises the so-
called ‘Okishio theorem’ dismissing Marxs analysis of the law
of the tendency of the rate of profit to fall, works with the
value composition of capital under the name of the organic
composition in his treatment of the transformation, and he is
by no means the only one to do so. Laibman (1973), Yaffe
(1976) and Kliman and McGlone (1988), for example, share
the same belief that the OCC can unproblematically be
defined as c/v, and they transform values into prices on the
basis of this mistake. For Marx matters were slightly more
complicated than that, as I will show. Roemer (1979), in his
analysis of the law of the tendency of the rate of profit to fall,
also calls OCC what should really be termed VCC, and his
whole discussion bears the mark of this misconception.
Shaikh (1977), in his now classic paper proposing an
iterative solution to the transformation problem, calls OCC
the ratio (c+v)/v, which cannot be accepted as a valid
formulation. On the other hand, Foley (1986), in an
otherwise very useful textbook, defines the ‘composition of
capital’ as v/(c+v), and the ‘OCC
’ as c/v. And, finally, Groll
and Orzech (1987, 1989a, 1989b, 1990), in their detailed
discussion of the composition of capital (one of whose merits
is the careful distinction of the
TCC, OCC and VCC from each
other) argue that the OCC is a long-run value-concept while
the VCC is measured in market prices and refers to the short-
run, something with which I believe Marx would not agree.
2
The problems mentioned above are merely a sample of the
difficulties one encounters in literature concerned with the
composition of capital, and in this article I search for a correct
interpretation of Marxs understanding of the concept. An
important aspect of the study is the identification of progress
Marx, himself, made in this field. In what follows I will show
that, while in the Grundrisse he does not yet employ the concepts
with which he would later call the composition of capital, in the
Theories of Surplus Value he introduces the physical (technical)
composition of capital and the organic composition of capital
and, finally, in Capital he uses the technical composition of
capital, the organic composition of capital and the value
composition of capital in their most developed form.
3
The progressive introduction of these terms reflects an
increasing refinement of Marxs own perception of the matters
at stake and, as it will be shown, allows him to clarify the
130 Capital & Class
50
presentation of his point of view. As the argument progresses,
Marxs views on the composition of capital and the precise
meaning of TCC, OCC and
VCC will become clear. Although
the form of Marxs arguments change, it will not escape the
reader that the problems with which he deals and the results he
reaches are essentially unaltered through the years.
My argument develops in two steps. I first follow Marxs
analysis of the composition of capital in the absence of technical
change. Each concept used by Marx will be defined and its
introduction justified. In the second part, I discuss how the
definitions of
TCC, OCC and VCC are affected by technical
progress. It will be concluded that one of Marxs aims in
distinguishing the OCC from the VCC is for the accurate analysis
of this particular case, where the accumulation of capital occurs
with technological innovation. The arrangement of this article,
which contrasts a static case to the dynamic imposed by technical
change, is essential, not only to the orderly introduction of the
concepts that concern us, but also to the appreciation of their
contradictions, limits and changes. Moreover, this arrangement is
useful in its direct connection with the distinct levels of
abstraction involved in the analysis of the composition of capital.
THE STATIC CASE
For Marx the productivity of labour is technically determined,
and he has defined it as the mass of means of production that
can be processed into final commodities in a given labour time
(Capital I, p.773). This notion is captured by the concept of
technical composition of capital (TCC, earlier entitled physical
composition of capital ), the physical ratio between the mass of
material inputs (dead labour) and the amount of living labour
necessary to transform them into a definite output:
A certain quantity of labour-power, represented by a certain
number of workers, is required to produce a certain volume
of products in a day, for example, and this involves putting
a certain definite mass of means of production in motion
and consuming them productively—machines, raw
materials etc… This proportion constitutes the technical
composition of capital, and is the actual basis of its organic
composition. (Capital III, p.244).
A note on Marx’s analysis of the composition of capital 131
As the TCC is a relation between a heterogeneous bundle of
use values (the material inputs) and a quantity of labour, it
cannot be measured by a single index; for similar reasons, a
comparison of the technical composition of capitals engaged
in distinct sectors (shipbuilding and gold mining, say, where
the use value of the inputs processed per hour of labour is very
different) is impossible. We know, however, that in capitalism
all inputs are commodities; because of that, the technical
composition of any capital can be assessed in value terms. This
value-assessment of the TCC gives us the organic composition
of capital (OCC), or the value of the means of production
required to absorb an hour of living labour in a particular
industry.
4
The OCC is, for Marx, an immediate value-reflex of the
TCC, and both are determined in the sphere of production.
Because of that, the OCC is called a ‘technological composit-
ion’ that synthesises, in value terms, the technical relations
typical of the production process under consideration. In
other words, the
OCC relates the total value of the constant
capital (irrespective of the circulation-based distinction
between its fixed and circulating parts) to the total labour time
required to transform the inputs (whether paid or unpaid).
Marx referred to the
OCC in the following terms:
The ratio between the different elements of productive
capital… [can be] determined… [b]y the organic
composition of productive capital. By this we mean the
technological composition. With a given productivity of
labour, which can be taken as constant so long as no
change occurs, the amount of raw material and means of
labour, that is, the amount of constant capital—in terms of
its material elements —which corresponds to a definite
quantity of living labour (paid or unpaid), that is, to the
material elements of variable capital, is determined in every
sphere of production (Theories of Surplus Value III, p.382).
5
There is, however, a major difficulty with the analysis of
capital from the point of view of its organic composition. As the
value of a bundle of means of production is the product of the
unit values of its components by the quantities used up, it seems
impossible to tell whether changes in a certain OCC result from
modifications in the underlying TCC (and thus from changes in
132 Capital & Class
50
the technology of production and the productivity of labour in
the industry under consideration ) or from alterations in the value
of the means of production used up (that reflect changes in the
production processes of other industries ). For Marx there was no
ambiguity, though. As the OCC is defined as an immediate
value-reflex of the TCC, it must not change if the TCC is kept
constant, whatever the changes in the value of the elements of
capital may be, despite the fact that the OCC is a value-concept.
Having made this clear, Marx says:
[I]f one assumes that the organic composition of capitals is
given and likewise the differences which arise from the
differences in their organic composition, then the value ratio
can change although the technological composition remains
the same… If there is any change in [e.g.] the value of
variable capital independent[ly] of the organic composition, it
can only occur because of a fall or a rise in the price of means
of subsistence that are not produced in the sphere of produc-
tion under consideration but enter into it as commodities
from outside… The organic changes and those brought
about by changes of value can have a similar effect on the
rate of profit in certain circumstances. They differ however
in the following way. If the latter are not due simply to
fluctuations of market prices and are therefore not temporary,
they are invariably caused by an organic change in the
spheres that provide the elements of constant or of variable
capital (Theories of Surplus Value III, pp.383–6, various
paragraphs).
Thus, Marx is clearly aware that, for a given production
process, changes in the value-ratio between the (fixed and
circulating) constant capital and the (paid and unpaid) quantity
of labour technically required, can stem from either variations in
the value of the inputs or technological (‘organic’) changes in
production. Based on this definition of the OCC, and well aware
that value changes should not be conflated with technical
modifications, Marx planned to discuss in Chapter II of Part III
of Capital:
6
1. Different organic composition of capitals, partly
conditioned by the difference between variable and
constant capital in so far as this arises from the stage of
A note on Marx’s analysis of the composition of capital 133
production—the absolute quantitative relations between
machinery and raw materials on the one hand, and the
quantity of labour which sets them in motion. These
differences relate to the labour-process. The differences
between fixed and circulating capital arising from the
circulation process have also to be considered…
2. Differences in the relative value of the parts of different
capitals which do not arise from their organic composition.
These arise from the difference of value particularly of the
raw materials, even assuming that the raw materials absorb
an equal quantity of labour in two different spheres.
3. The result of those differences is diversity of the rates of
profit in different spheres of capitalist production (Theories
of Surplus Value I, pp.415–6).
I believe Marx eventually realised that an adequate treat-
ment of these problems would require an even more refined
distinction between the effects of application of different
technologies and the consequences of use of inputs of distinct
values. With this aim, he introduces, in Capital, the concept of
value composition of capital (VCC). The VCC is a circulation-
based concept, defined as the ratio between the value of the
(circulating) constant capital and the variable capital required
to produce a final unit of commodity (in other words, it is the
ratio between the two components of the commoditys cost
price). We will now follow Marxs discussion of the same
problem both before and after the definition of the VCC, which
will show the place of the VCC in his analysis and its precise
relation to the TCC and the OCC. Marx wants to point out that
if the technical and organic compositions of two capitals are
equal, but the value of the means of production used is
different, a circulation-based value-assessment of their TCCs
may mislead the analyst into the belief that their TCCs are also
distinct. In the Theories of Surplus Value he argues as follows:
In the case of capitals of equal size… the organic composition
may be the same in different spheres of production, but the value
ratio of the primary component parts of constant and variable
capital may be different according to the different values of the
amount of instruments and raw materials used. For example,
copper instead of iron, iron instead of lead, wool instead of
cotton, etc. (Theories of Surplus Value III, p.386).
7
134 Capital & Class
50
The introduction of the VCC allowed Marx to be more rigorous,
and, in Capital, he says:
[I]t is possible for the proportion [the TCC
] to be the same in
different branches of industry only in so far as variable capital
serves simply as an index of labour-power, and constant
capital as an index of the volume of means of production that
labour-power sets in motion. Certain operations in copper or
iron, for example, may involve the same proportion between
labour-power and means of production. But because copper
is dearer than iron, the value relationship between variable
and constant capital will be different in each case, and so
therefore will the value composition of the two capitals taken as a
whole. (Capital III, p.244; my emphasis).
These examples concern the impact of a difference in the
value of the means of production used per labour hour in two
sectors which otherwise have equal TCCs and OCCs. If copper
and iron utensils (or wool and cotton clothes) are manufactured
with identical technologies, and thus by capitals with the same
technical and organic compositions, Marx says that their value
compositions will be distinct because the values of the material
inputs are different. In the first example, from the Theories of
Surplus Value, he measures the
TCCs only through the OCCs.
However, as the OCC reflects the TCC from the point of view of
the production process, it disregards the differing value of the
inputs consumed by the two capitals. Marx is reduced, then, to
observing’ that capitals that use means of production of
differing values may have equal TCCs and OCCs. In the second
case, presented in Capital, his argument proceeds differently, by
directly pointing out that if two capitals in distinct sectors have
the same technical (and thus organic) composition, but use
means of production of different value, the equality of their
TCCs and OCCs would appear distorted by their differing VCCs.
The inverse situation was also the subject of Marxs
attention. If we now suppose that two sectors had equal VCCs,
could they still have different OCCs (and hence distinct TCCs)?
His answer is in the affirmative:
A capital of lower organic composition… considered simply
in terms of its value composition, could evidently rise to
the same level as a capital of higher organic composition,
A note on Marx’s analysis of the composition of capital 135
simply by an increase in the value of its constant parts…
Capitals of the same organic composition can thus have a
differing value composition, and capitals of the same
percentage (value) composition can stand at varying levels
of organic composition, displaying various different levels
of development of the social productivity of labour.
(Capital III, pp.900-01)
Therefore, if two production processes combine different
quantities of means of production and labour power, they will
have different TCCs and thus distinct OCCs. However, if the
value of those inputs is such that the ratio between the constant
and the variable capitals used up is equal, then their value
compositions will be equal. From the two cases above we can
see that differences in the value of the constant and variable
capital consumed in distinct industries concern their VCCs but
not their OCCs, while differences in their technologies of
production affect their OCC
s but this may not be accurately
reflected by their VCCs. Given Marxs view that production, and
not circulation, is the dominant sphere in capitalism, it will
come as no surprise that he considered differences in the
OCCs
theoretically more important than differences in the VCCs.
8
A final example will show the precise scope and limitations of
the concept of OCC and the place of the VCC in Marxs analysis:
[L]et us assume that the raw material is dearer and labour (of
greater skill ) is dearer, in the same proportion. In this case
(capitalist) A employs 5 workers, where (capitalist) B employs
25, and they cost him £100 —as much as the 25 workers,
because their labour is dearer (their surplus labour is therefore
also worth more). These 5 workers work up 100 lbs. of raw
material, y, worth (£)500 and B’s workers work up 1,000 lbs.
of raw material, x, worth (£)500… The value ratio here—
£100 v to (£)500 c is the same in both cases, but the organic
composition is different (Theories of Surplus Value III, p.387)
9
This example is clear enough. Although capitalists A and B
spend equal amounts of money on means of production and
labour power—which means that their capitals have equal value
compositions—Marx states that their organic compositions
are distinct because they adopt different technologies of
production.
136 Capital & Class
50
We can therefore conclude that, although both the OCC
and
the
VCC are value-assessments of the
TCC, they are undeniably
distinct and their difference stems from the method of assessing
the value of the means of production and labour power. An
OCC-comparison of the technologies of production adopted in
two industries will give results that are independent of
differences in the values of the components of capital, because
the OCC is defined with reference to the sphere of production.
Distinctions (or, as we will see, variations) in the values of
constant and variable capital are detected by the VCC, a
separate concept that pertains to the sphere of circulation.
Only if this point is made absolutely clear does it become
possible to apprehend Marxs definition in full:
The composition of capital is to be understood in a twofold
sense. As value, it is determined by the proportion in which
it is divided into constant capital… and variable capital…
As material, as it functions in the process of production, all
capital is divided into means of production and living
labour-power. This latter composition is determined by the
relation between the mass of the means of production
employed on the one hand, and the mass of labour
necessary for their employment on the other. I call the
former the value-composition, the latter the technical
composition of capital. There is a close correlation between
the two. To express this, I call the value-composition of
capital, in so far as it is determined by its technical
composition and mirrors the changes in the latter, the
organic composition of capital. (Capital I, p.762).
10
THE DYNAMIC CASE
It is entirely legitimate to ask at this point, which values could
possibly establish equality between the OCCs of two sectors
with the same TCCs, if the value of the means of production
consumed per hour of labour is different in each case? In what
follows it will become clear that, while in the static case
discussed above such values are abstractions, in a dynamic
environment they do exist and, moreover, the distinction
between the OCC and VCC gives us invaluable clues to an
understanding of the accumulation of capital.
A note on Marx’s analysis of the composition of capital 137
Marx firmly believes that in capitalism there is an inherent
tendency towards the development of the techniques of
production. Technical change is usually introduced in
individual firms, raising their TCCs,
OCCs and VCCs. As a
result of the adoption of new technologies, these firms enjoy a
higher level of productivity and may generate a greater mass of
use values with the same labour power. As the individual value
of their commodities falls below their social value, innovative
capitalists can capture surplus profits, which is the object of
the whole exercise.
Competition between firms of the same branch will
generalise these technical advances, which reduces the value of
the commodity and eliminates the scope for absorption of
surplus profit by some capitalists. This process of introduction
and subsequent diffusion of technical innovation is typical of
an intensified expanded reproduction of capital,
11
where a
given mass of living labour processes an ever larger quantity of
means of production into outputs. In this case the technical
and the organic compositions of all capitals tend to rise
through time, and the values of all commodities tend to fall.
In abstract terms, it may be said that in every cycle of
production the individual, as well as the social (or the
economy-wide), TCCs and OCCs rise,
12
and that the values of
all commodities (inclusive of labour power) fall. In other
words, the TCC and OCC of capital-in-general rise with time,
and this causes the value of all commodities to fall.
We must, however, be extremely careful to distinguish the
level of analysis. As far as an individual capital is concerned, or
with the analysis set at the level of many capitals, the
introduction of a technological innovation leads to an
identical change in technical, organic and value compositions.
As time passes and the new technique is more widely adopted,
its VCC tends to fall because of the reduction in input values.
With regard to capital-in-general, though, matters are quite
different. At this level of analysis, technical progress is
synonymous with an increase in its technical and organic
compositions, and immediately leads to a reduction in the
value of the output.
As technical change modifies the values assigned to all
commodities at the start of the subsequent phase of
circulation, it can safely be concluded that the determination
of the OCC and VCC in a dynamic environment is contingent
138 Capital & Class
50
upon the way changes in production affect commodity
circulation. An adequate understanding of this situation can
only be achieved through an analysis of capital-in-general,
where the values that exist at the beginning of the cycle
(‘earlier values’), at which the inputs are purchased, are higher
than those at which the output is sold (‘later values’; see
Carchedi, 1984 and 1992). Even though this is a conceptual
distinction rather than a chronological one, it is of extreme
relevance for the analysis of accumulation and the dynamics of
circulation:
[S]ince the circulation process of capital is not completed
in one day but extends over a fairly long period until the
capital returns to its original form… great upheavals and
changes take place in the market in the course of this
period… [and] in the productivity of labour and therefore
also in the real value of commodities, [and] it is quite clear,
that between the starting-point, the prerequisite capital,
and the time of its return at the end of one of these periods,
great catastrophes must occur and elements of crises must
have gathered and develop… The comparison of value in
one period with the value of the same commodities in a
later period is no scholastic illusion… but rather forms the
fundamental principle of the circulation process of capital
(Theories of Surplus Value II, p.495).
13
Now, which set of values is to be used in the calculation of
the OCC and the VCC, the older and higher or the newer and
lower? For Marx, the answer is unambiguous. The OCC reflects
the TCC at the initial (and higher) values of the component
parts of capital, before the new technologies affect the value of
the output, while the VCC reflects the TCC at the final ( and
lower) values of the elements of constant and variable capital.
As a result, changes in the social VCC will capture the previous
rise in the social TCC as well as the ensuing fall in commodity
values, inclusive of those that have been used as inputs in the
last production period. Because of that, the VCC will tend to
increase more slowly than the social TCC and OCC:
This change in the technical composition of capital… is
reflected in its value-composition by the increase of the
constant constituent of capital at the expense of its variable
A note on Marx’s analysis of the composition of capital 139
constituent… However, …this change in the composition
of the value of the capital, provides only an approximate
indication of the change in the composition of its material
constituents… The reason is simple: with the increasing
productivity of labour, the mass of the means of
production consumed by labour increases, but their value
in comparison with their mass diminishes. Their value
therefore rises absolutely, but not in proportion to the
increase in their mass. (Capital I, pp.773–4)
The social OCC, on the other hand, is measured at ‘earlier’
values, and rises in concert with the social TCC. In our context
of intensified expanded reproduction and increasing
centralisation of capital (where, as we have seen, technical
progress is the essential lever of accumulation), Marx points
out that we may well find that the TCC and the OCC grow
even faster than social capital itself:
[T]he development of the productivity of labour… and the
change in the organic composition of capital which results
from it, are things which do not merely keep pace with the
progress of accumulation, or the growth of social wealth.
They develop at a much quicker rate, because simple
accumulation, or the absolute expansion of the total social
capital, is accompanied by the centralisation of its
individual elements, and because the change in the
technical composition of the additional capital goes hand
in hand with a similar change in the technical composition
of the original capital. (Capital I, p.781, my emphasis).
14
It is quite obvious at this stage that a proper distinction
between the OCC and the VCC can only be made by means of
a comparison between contrasting situations. If we compare
two capitals at the same moment of time, as we did in the first
part of this text, we would contrast the value of the constant
capital productively consumed per hour of labour (which
defines their VCCs), with the mass of means of production
processed in the same time (that determines their OCCs).
Despite the conceptual clarity of this distinction, the values
that should be used in calculation of the OCC are abstractions.
The difficulty of calculating the OCC in the static case does
not imply that it is without use as a concept, as it was precisely
140 Capital & Class
50
in a static comparison of capitals with distinct organic
compositions that Marx developed, in Part II of Capital III,
his transformation of values into prices of production (which
marks a change in the level of abstraction of his analysis, as
capital-in-general is superseded by many capitals; see
Rosdolsky, 1977).
In a dynamic environment, as discussed in the second part
of this text, matters are remarkably different. Both the OCC
and VCC of a capital undergoing technical change can be
calculated numerically, and, as we have concluded, they
diverge because the OCC is an ex ante evaluation of the value
of the (fixed and circulating) constant capital technically
required per hour of (paid and unpaid) labour, while the VCC
is the (ex post) ratio between the new value of the (circulating)
constant and the variable capital spent in the last phase of
production.
15
Thus, in the dynamic case, the production-based
nature of the OCC is reflected in its measurement at the time
of production, while the circulation-based VCC
is calculated at
end of production, when values are determined and
commodities enter the sphere of circulation. It was with
reference to this dynamic context, where the organic
composition of a single capital changes through time because
of technical progress, that Marx presented his law of the
tendency of the rate of profit to fall, in Part III of Capital III.
C
ONCLUSION
The use by Marx of the notions of TCC, OCC and VCC may at
times look ambiguous, since both the OCC and the VCC assess
the TCC in value terms. However, we have seen that these
concepts have very different theoretical roles, and the
terminological changes Marx gradually adopts almost certainly
indicate his growing awareness of the importance of the
composition of capital for analysis of the accumulation
process.
My conclusions, which confirm and build upon previous
findings in Fine (1979, 1983, 1989 and 1990), Fine and Harris
(1979) and Weeks (1981), can be summarised as follows.
16
Marx defined the OCC as the means to assess the TCC, a
technical variable, in value terms. He recognised that a value-
measurement of the TCC would be affected by differences or
A note on Marx’s analysis of the composition of capital 141
Acknowledgement
changes in the TCC itself, as well as by differences or changes
in the values of its components. Since the
OCC is incapable of
discriminating any phenomenon outside the sphere of
production (inclusive of the distinction between fixed and
circulating capital and of the effects of differences or changes
in the process of value creation upon the actual level of
commodity values), Marx developed the concept of
VCC,
defined as the value ratio between the (circulating) constant
and the variable parts of the advanced capital.
In a static situation the OCC assesses the TCC at values that
cannot be but abstractions. However, in a dynamic environ-
ment, these values are theoretically calculable and the OCC is
determined (for capital-in-general) by an assessment of the
constant capital at the ‘old’ (ex ante and higher) level of values,
while the VCC evaluates the TCC at the ‘new’ (ex post and
lower) values of the inputs. These ‘new values’ prevail at the
passage to the sphere of circulation, where the evolving
conditions of production determine a new level of values and
these are expressed in money terms. The use of both
OCC and
VCC
as forms of assessing the TCC enabled Marx to discuss the
processes of capital accumulation and technical change from
the points of view of production and circulation simulta-
neously, which is otherwise impossible.
Despite the difficulties arising from Marxs inability to
conclude much of his work, it is still, therefore, possible to
identify the precise meaning of the concepts of
TCC, OCC and
VCC and to situate them relative to the main body of his
writing. Apart from dispelling widespread misconceptions
with regard to the meaning of these concepts, this article has
also shown the intrinsic connections between questions such
as the production of relative surplus value, the transformation
problem and the law of the tendency of the rate of profit to
fall, that have generally escaped the literature. However, a
deeper understanding of the implication of these conclusions
for the investigation of problems that Marx himself tackled, as
well as their application to new questions, remains to be
investigated further.
_________________________
I am grateful to Ben Fine, Alan Freeman, Paolo Giussani, Derek Kerr,
Deborah Johnston and Brian McGrail for their helpful comments
on earlier versions of this paper.
142 Capital & Class
50
Notes
1. Marx’s most important economic writings are the Contribution to
the Critique of Political Economy, the Grundrisse, the Theories of
Surplus Value and Capital. Only the Contribution and the first
volume of Capital were completed during his lifetime, while the
others were left in a more or less unfinished state and were
published posthumously.
2. I do not have space to make a more detailed critique of Groll and
Orzech, who have a highly sophisticated understanding of the
composition of capital. See, however, Fine (1990).
3. The Grundrisse was written in 1857–8 and the Theories of Surplus
Value derive from the 1861–3 manuscript, which also contributed
to all three volumes of Capital. Apart from that, Capital III was
written in 1864–5 and 1875; Capital II in 1865 (or 1867), 1870,
and 1877–8, and Capital I was written after earlier versions of the
other two volumes, published in 1867 and improved for later
editions (see Engels’s Preface to Capital II and Oakley, 1983).
4. ‘The organic composition can be taken to mean the following:
Different ratios in which it is necessary to expend constant capital
in the different spheres of production in order to absorb the same
amount of labour.’ (Theories of Surplus Value III, p.387).
5. Or, if ‘it is assumed that no change has taken place in the organic
composition of capital… [t]he same number of workers as before is
required… in order to work up the same volume of raw material
with the same amount of machinery.’ (Theories of Surplus Value II,
p.276; all emphases are Marx’s, unless otherwise stated).
6. Oakley (1983) analyses the stages of Marx’s elaboration of Capital
and the various subdivisions considered for the book.
7. Marx presents the same argument elsewhere: ‘With capitals in
different branches of production—with an otherwise equal physical
composition—it is possible that the higher value of the
machinery or of the material used, may bring about a difference.
For instance, if the cotton, silk, linen and wool [industries] had
exactly the same physical composition, the mere difference in the
cost of the material used could create such a variation’ (Theories
of Surplus Value II, p.289; the term in [] was added by the
Editor).
8. See, for example, Grundrisse, p.99. The relative preponderance of
production is also quite obvious in the following passage, which
refers to a situation where two capitals have distinct
TCCs and
OCCs, but equal VCCs: ‘[W]e immediately see, if the price of the
dearer raw material falls down to the level of that of the cheaper
one, that these capitals are none the less similar in their technical
composition. The value ratio between variable and constant
capital would then be the same, although no change had taken
place in the technical proportion between the living labour
applied and the quantity and nature of the conditions of labour
required’ (Capital III, p.900).
A note on Marx’s analysis of the composition of capital 143
9. The value of skilled labour power and the value-creating capacity
of skilled labour have been the subject of considerable discussion
since Bohm-Bawerk (1975) first criticised Marx’s arguments for
their circularity or worse. For an overview of the vast literature
concerning these questions, which cannot be dealt with here, see
Giussani (1986), Harvey (1985), Itoh (1987), Lee (1990) and
Rowthorn (1980).
10. Or, what amounts to the same, ‘[t]he organic composition of
capital is the name we give to its value composition, in so far as
this is determined by its technical composition and reflects it.'
(Capital III, p.245).
11. When the accumulation of capital is based upon its concentration
it takes the form of an extended expanded reproduction, with a
constant composition of capital. In developed capitalism, where
centralisation predominates, accumulation tends to take the form
of an intensified expanded reproduction. In this case, the use of
machinery for the production of relative surplus value brings about
rises in the
TCC and in the OCC (see Fine and Harris, 1979).
12. In the Grundrisse Marx was already aware of the importance and
the wide implications of this fact. Despite this, he had not yet
defined the appropriate concepts to develop the analysis of the
composition of capital, and we read on p.389: ‘if the total value of
the capital remains the same, an increase in the productive force
means that the constant part of capital (consisting of machinery
and material) grows relative to the variable, i.e. to the part of
capital which is exchanged for living labour and forms the wage
fund. This means at the same time that a smaller quantity of
labour sets a larger quantity of capital in motion’.
On p.831 we have: ‘The fact that in the development of the
productive powers of labour the objective conditions of labour,
objectified labour, must grow relative to living labour… appears
from the standpoint of capital not in such a way that one of the
moments of social activity—objective labour—becomes the ever
more powerful body of the other moment, of subjective, living
labour, but rather… that the objective conditions of labour
assume an ever more colossal independence, represented by its
very extent, opposite living labour, and that social wealth
confronts labour in more powerful portions as an alien and
dominant power.’ (see also pp.388–98, 443, 707 and 746–7).
13.In the same vein, Marx says in Capital II, p.185: ‘[P]eriodic
revolutions in value thus confirm what they ostensibly refute: the
independence which value acquires as capital, and which is
maintained and intensified through its movement… This
sequence of metamorphoses of capital in process implies the
continuous comparison of the change in value brought about in
the circuit with the original value of the capital.’ (see also Theories
of Surplus Value III, p.154)
144 Capital & Class
50
14. Or: ‘[s]ince the demand for labour is determined not by the
extent of the total capital but by its variable constituent alone,
that demand falls progressively with the growth of the total
capital, instead of rising in proportion to it, as was previously
assumed. It falls relatively to the magnitude of the total capital,
and at an accelerated rate, as this magnitude increases. With the
growth of the total capital, its variable constituent, the labour
incorporated in it, does admittedly increase, but in a constantly
diminishing proportion.’ (Capital I, pp.781–2).
15. See Saad-Filho (1993) for a more thorough analysis of the impact
of technical progress upon the determination of values.
16. Ben Fine, Laurence Harris and John Weeks were, as far as I know,
the first to interpret correctly Marx’s analysis of the composition
of capital, but they fail to give sufficient evidence in support of
their argument and do not appreciate the gradual elaboration of
Marx’s point of view.
_________________________
A note on Marx’s analysis of the composition of capital 145
References
Bohm-Bawerk, Eugen von (1975) Karl Marx and the Close of His
System (ed. P.M. Sweezy). A.M. Kelley, Clifton.
Carchedi, Guglielmo (1984) ‘The Logic of Prices as Values’, in
Economy and Society 13 (4), pp.431–55. Reprinted in Fine (1986).
__________ (1992) Frontiers of Political Economy. Verso, London.
Desai, Meghnad (1989) ‘The Transformation Problem’, in Journal of
Economic Surveys 2 (4), pp. 295–333.
Fine, Ben (1979) ‘On Marx’s theory of Agricultural Rent’, in
Economy and Society 8 (3). Reprinted in Fine (1986).
__________ (1983) ‘A dissenting note on the Transformation Problem’,
in Economy and Society 12 (4). Reprinted in Fine (1986).
__________ (1986) The Value Dimension: Marx versus Ricardo and
Sraffa. Routledge & Kegan Paul, London.
__________ (1989) Marx’s Capital (3rd.ed.). Macmillan, Basingstoke.
__________ (1990) ‘On the Composition of Capital: A Comment on
Groll and Orzech’, in History of Political Economy 22 (1),
pp.149–55
Fine, Ben and Laurence Harris (1979) Rereading Capital. Macmillan,
London.
Foley, Duncan (1986) Understanding Capital: Marx’s Economic
Theory. Harvard University Press, Cambridge, Mass.
Groll, Ze’ev and Shalom Orzech (1987) ‘Technological progress and
values in Marx’s “Theory of the Decline in the Rate of Profit”: an
exegetical approach’, in History of Political Economy 19 (4),
pp.591–613.
__________ (1989a) ‘Stages in the development of a Marxian
concept: the Composition of Capital’, in History of Political
Economy 21 (1), pp.57–76.
__________ (1989b)From Marx to the Okishio Theorem: A
genealogy’, in History of Political Economy 21 (2), pp.253–72.
__________ (1990) ‘Capital-Labor Relations: Consistency or
Complication? A reply to Ben Fine’, in History of Political
Economy 22 (1), pp.155–65.
Giussani, Paolo (1986) Value and Labour: Simple and Complex
Labour in the Labour Theory of Value. Working Paper 7, Centre
for Political Science, Vrije Universiteit Brussel, Brussels.
Harvey, Philip (1985) ‘The Value-Creating Capacity of Skilled Labor
in Marxian Economics’, in Review of Radical Political Economics
17 (1/2), pp.83–102.
Itoh, Makoto (1987) ‘Skilled Labour in Value Theory’, in Capital &
Class 31, pp.39–58.
Kliman, Andrew and Ted McGlone (1988) ‘The Transformation
non-Problem and the non-Transformation Problem’, in Capital
& Class 35, pp.56–83.
Laibman, David (1973) ‘Values and Price of Production: the
Political Economy of the Transformation Problem’, in Science
and Society 37, pp.404–36.
146 Capital & Class
50
Lee, Chai-on (1990) ‘On the Three Problems of Abstraction,
Reduction and Transformation in Marx’s “Labour Theory of
Value”.’ PhD thesis, University of London.
Marx, Karl (1969, 1969, 1972). Theories of Surplus Value, 3 vols.
Lawrence & Wishart, London.
__________ (1981) Grundrisse. Penguin, Harmondsworth.
__________ (1976, 1978, 1981) Capital, 3 vols. Penguin, Harmonds-
worth.
Morishima, Michio (1973) Marx’s Economics—A Dual Theory of
Value and Growth. CUP, Cambridge.
Oakley, Allen (1983) The Making of Marx’s Critical Theory.
Routledge & Kegan Paul, London.
Okishio, Nobuo (1974) ‘Value and Production Price’, in Kobe
University Economic Review 20, pp.1–19.
Roemer, John E. (1979) ‘Continuing Controversy on the Falling
Rate of Profit: Fixed Capital and Other Issues’, in Cambridge
Journal of Economics 3, pp.379–98.
Rosdolsky, Roman (1977) The Making of Marx’s ‘Capital’. Pluto
Press, London.
Rosthorn, Bob (1980b) ‘Skilled Labour in the Marxist System’, in
Capitalism, Conflict and Inflation. Lawrence & Wishart, London.
Saad-Filho, Alfredo (1993) ‘Labour, Money, and “Labour-Money”: a
review of Marx’s critique of John Gray’s Monetary Analysis’, in
History of Political Economy 25 (1), Spring.
Seton, Francis (1957) ‘The “Transformation Problem” ’, in Review of
Economic Studies 24, pp.149–60.
Shaikh, Anwar (1977) ‘Marx’s Theory of Value and the
“Transformation Problem”’, in J. Schwartz, The Subtle Anatomy
of Capitalism. Goodyear, Santa Monica.
Sweezy, Paul M. (1968) The Theory of Capitalist Development.
Monthly Review Press, New York.
Weeks, John (1981) Capital and Exploitation. Princeton University
Press, Princeton.
Yaffe, David (1976) ‘Value and Price in Marx’s “Capital”’, in
Revolutionary Communist 1, May, pp.31–49.
_________________________
... However, in Heinrich (2016, 127), he boldly declares that after 1865, "Although Marx made no more explicit reference to the 'law of the tendency of the rate of profit to fall,' a strong indication suggests that Marx no longer adhered to this law." The textual evidence he offers is irrelevant as he is totally ignorant of the distinction and the relationship between the value composition of capital (VCC), the technical composition of capital (TCC) and the organic composition of capital (OCC) (see Saad-Filho 1993). Thus, he refers to a passage where Marx argues that there can be an increased VCC with an increased profit rate. ...
Article
Engels is the co-founder of Marxism. However, he sometimes came under attack as a distorter of Marx’s thought. The first wave of attacks (1970s and 1980s) focused on philosophical and methodological issues. The second wave of attacks emerged since the 1990s and centred more on political economy, pioneered by the Neue Lekture and the Sraffians. It maintains that Engels distorted Capital by making unwarranted interventions during his editing of the book. More specifically, it is argued that he misrepresented Capital as a complete book whereas it is supposed to be a solely incomplete research project. Among others, Engels is accused that he inscribed to Marx a theory of economic crisis based on the law of the falling rate of profit (LFRP), whereas the latter was supposedly agnostic. This paper concentrates on this second wave of attacks. It argues that their accusations are unfounded and do injustice to the great contribution of Engels in the Marxist tradition.
... La COC no es más que la manifestación de la ratio capital-trabajo en la economía ortodoxa. Por ello, puede estimarse como una ratio de capital constante en términos reales y la masa de fuerza de trabajo aplicada a la producción (Saad-Filho, 1993). Este indicador da cuenta de la intensificación del cambio técnico que está detrás de la tendencia a la crisis en estas economías (Marx, 2006a). ...
Article
Full-text available
A partir de la reinterpretación de las Cuentas Nacionales en términos de categorías marxianas, el presente texto tiene como objeto brindar una clave interpretativa para pensar el estancamiento de la economía argentina en relación con la dinámica de valorización dependiente del ciclo del capital internacional. Para ello, con información publicada en las Matrices Insumo-Producto (MIP-INDEC, 1997 y 2004) y la construcción de series temporales (1997-2015), se estudia el desenvolvimiento de la economía en torno a los tres momentos del ciclo del capital (circulación inicial-producción-circulación final). Finalmente, del análisis empírico se concluye que, desde la necesidad de capital extranjero y maquinaria importada en el comienzo del ciclo, hasta la producción con destino en el exterior como componente principal de la demanda agregada, la economía argentina presenta un patrón de dependencia que puso un límite estructural al desenvolvimiento del producto a partir de 2008 y, especialmente, entre los años 2012-2015.
... Heinrich (2016, p.127) boldly declares that after 1865 'Although Marx made no more explicit reference to the "law of the tendency of the rate of profit to fall," a strong indication suggests that Marx no longer adhered to this law'. The textual evidence he offers is irrelevant as he is totally ignorant of the distinction and the relationship between the value composition of capital (VCC), the technical composition of capital (TCC) and the organic composition of capital (OCC) (see Saad-Filho (1993)). Thus, he refers to a passage where Marx argues that there can be an increased VCC with an increased profit rate. ...
Article
Full-text available
The 200th anniversary of the birth of F.Engels comes at a time when his contribution to Marxism is being disputed by Neue Lekture and Sraffian authors, based on the alleged discovery of him having distorted Capital. The evidence presented by the new anti-Engelsionists are flimsy and essentially philological hair-splitting arguments. The common ground uniting them is their abhorrence for the existence of Marxism as a coherent theoretical tradition and as a weapon for the revolutionary struggle of the working class for the emancipation of human society. https://mc.manuscriptcentral.com/hug Human Geography F o r P e e r R e v i e w Human Geography Friedrich Engels and his contribution to Marxism Abstract The 200 th anniversary of the birth of F.Engels comes at a time when his contribution to Marxism is being disputed by Neue Lekture and Sraffian authors, based on the alleged discovery of him having distorted Capital. The evidence presented by the new anti-Engelsionists are flimsy and essentially philological hair-splitting arguments. The common ground uniting them is their abhorrence for the existence of Marxism as a coherent theoretical tradition and as a weapon for the revolutionary struggle of the working class for the emancipation of human society.
... The OCC is simply a manifestation of the TCC (the capital-labor ratio, in orthodox economics). It can thus be estimated as the ratio of CC 2 to the mass of living labor applied during production (Saad-Filho 1993). This indicator accounts for the intensification in technical change that is promoted by intercapitalist competition and underlies the tendency toward crisis in capital-dominated economies 3 (Marx 1992). ...
Article
Full-text available
In this article, we examine the tendency toward stagnation in the Argentinean economy, as a dependent economy, in the context of a new development model that emerged in this country before the neoliberal crisis in 2001. The initial boom of accumulation in the period 2002–2007, after the devaluation of the peso, has been challenged for various tensions that emerged, in our perspective, for the dependent economic structure of Argentina in the years 2007 and 2008. These tensions were increased after the European economic crisis and China’s slowdown in 2012–2014, leading to the stop of the accumulation process and the start of economic transition to the different development model. JEL Classification: P16; O11
... İzleyen bölümde, bu literatürdeki ortak temel vurgulara değinilecektir. (Rubin 1994, De Brunhoff, S. 1976, Eldred, M ve M. Hanlon 1981, Elson 1979, Saad-Filho, A 1993ve Likitkijsomboon 1995, Ercan,2006a Türkiye örneğinin sağlam bir analiz temeline oturtulması için, sermayenin işlevleri ile biçimleri arasındaki ayırımın da göz önüne alınması gereklidir. ...
Article
Full-text available
zet Bu çalışma, geç kapitalistleşen ülkelerde finansal faaliyetlerdeki artışın ne "dışarıdan-içeriye" doğru bir belirlenim, ne de üretim ve finans arasında bir kopuş ile açıklanamayacağını ileri sürmektedir. Geç kapitalistleşen ülkelerde, para ve üretken sermaye arasında zaman yönelimli, startejik bir tercih gözlenmektedir. Türkiye örneği, geç kapitalistleşen bir ülke bağlamında, para ve üretken sermaye arasındaki içsel bağlantının amprik kanıtını sergilemektedir. Türkiye'de sermaye birikiminin birbirini izleyen alt-dönemleri boyunca, güçlü holdingler, sermayenin farklı biçimleri arasındaki tercihlerini stratejik olarak değiştirmişlerdir. Bu sermaye grupları, 1980 sonrası dönemde finans sektöründeki kolay kârlardan muazzam ölçekte nemalanmış ve bunu, Türkiye'de halen yaşanmakta olan üretken sermaye-temelli birikime geçişe hazırlanma adına yapmışlardır. Anahtar kelimeler: Ekonomik kalkınma, sermayenin uluslararasılaşması, holdingler, finansal piyasalar, kamu maliye politikaları JEL Sınıflaması: O1, O16, G1, G18 Abstract-The Time-Dependent Strategic Choice between Money and Productive Capital in the Process of Internationalization of Capital in Turkey This paper argues that the rise in financial activities in late capitalized countries can neither be explained with an "outside-in" framework nor on the basis of a disarticulation between production and finance. In late capitalized countries, a time-dependent, strategic choice between money and productive capital has been observed. The Turkish case provides empirical evidence for the interconnectedness between money and productive capital in the context of a late capitalized country. Powerful conglomerates have strategically changed their preferences between different forms of capital during the subsequent periods of capital accumulation in Turkey. Those capitals have extensively benefited from the easy profits in the finance sector in the post-1980 period in order to get prepared for the current transition to the productive capital-based accumulation in Turkey.
... Theoretically, it is possible to separate them as in expression (10), but empirically this would imply capital calculations for each national industry. In addition to theoretical problems concerning the definition of capital composition (see Saad-Filho 1993), the WIOD do not include data on total capital stocks. For this reason, in the empirical analysis it has not been possible to distinguish the two forms of interindustry profit transfers. ...
Article
Full-text available
Unequal exchange arises when spatial production of value is disjointed from its geographical distribution. A disaggregated monetary model of the world economy is presented on the grounds of Marx’s labor theory of value. All the forms of unequal exchange in international trade are explained, on the basis of a coherent definition of the forms of international value of traded commodities. Estimates of value transfers for recent years show the ongoing relevance of the unequal exchange in the modern capitalist world economy. JEL classifications: B51, D46, F63 Keywords unequal exchange, Marxist value theory, international trade, globalization Available at: https://journals.sagepub.com/doi/10.1177/0486613418773753
... İzleyen bölümde, bu literatürdeki ortak temel vurgulara değinilecektir. (Rubin 1994, De Brunhoff, S. 1976, Eldred, M ve M. Hanlon 1981, Elson 1979, Saad-Filho, A 1993ve Likitkijsomboon 1995, Ercan,2006a Türkiye örneğinin sağlam bir analiz temeline oturtulması için, sermayenin işlevleri ile biçimleri arasındaki ayırımın da göz önüne alınması gereklidir. ...
Article
Full-text available
zet Bu çalışma, geç kapitalistleşen ülkelerde finansal faaliyetlerdeki artışın ne "dışarıdan-içeriye" doğru bir belirlenim, ne de üretim ve finans arasında bir kopuş ile açıklanamayacağını ileri sürmektedir. Geç kapitalistleşen ülkelerde, para ve üretken sermaye arasında zaman yönelimli, startejik bir tercih gözlenmektedir. Türkiye örneği, geç kapitalistleşen bir ülke bağlamında, para ve üretken sermaye arasındaki içsel bağlantının amprik kanıtını sergilemektedir. Türkiye'de sermaye birikiminin birbirini izleyen alt-dönemleri boyunca, güçlü holdingler, sermayenin farklı biçimleri arasındaki tercihlerini stratejik olarak değiştirmişlerdir. Bu sermaye grupları, 1980 sonrası dönemde finans sektöründeki kolay kârlardan muazzam ölçekte nemalanmış ve bunu, Türkiye'de halen yaşanmakta olan üretken sermaye-temelli birikime geçişe hazırlanma adına yapmışlardır. Anahtar kelimeler: Ekonomik kalkınma, sermayenin uluslararasılaşması, holdingler, finansal piyasalar, kamu maliye politikaları JEL Sınıflaması: O1, O16, G1, G18 Abstract-The Time-Dependent Strategic Choice between Money and Productive Capital in the Process of Internationalization of Capital in Turkey This paper argues that the rise in financial activities in late capitalized countries can neither be explained with an "outside-in" framework nor on the basis of a disarticulation between production and finance. In late capitalized countries, a time-dependent, strategic choice between money and productive capital has been observed. The Turkish case provides empirical evidence for the interconnectedness between money and productive capital in the context of a late capitalized country. Powerful conglomerates have strategically changed their preferences between different forms of capital during the subsequent periods of capital accumulation in Turkey. Those capitals have extensively benefited from the easy profits in the finance sector in the post-1980 period in order to get prepared for the current transition to the productive capital-based accumulation in Turkey.
... La COC no es más que la manifestación de la CTC (la relación capital-trabajo de acuerdo con los conceptos de la economía ortodoxa). De allí que pueda estimarse como un cociente entre el capital constante 7 en términos reales y la masa de trabajo vivo aplicada a la producción (Saad-Filho, 1993). Este indicador nos permite dar cuenta del proceso de intensificación del cambio técnico, fomentado por la competencia intercapitalista, que se encuentra detrás de la tendencia a la crisis en las economías dominadas por el capital (Marx, 2006). ...
Article
Full-text available
The concrete way in which the process of the valorization of capital occurs in the periphery countries differs substantially from what happens in the core nations. Empirical studies aimed at taking account of these particularities should, in our view, comprise the cycle of capital in each country as a whole. In the present work, we make an estimate of the Marxist categories based on input-output tables for the United States and Argentina for the period 1997-2004. This estimate enables us to carry out a detailed comparison of all of the moments in the capital cycle of a core and a periphery economy, providing a methodologically consistent framework for empirical application of the analytical categories. The results obtained from comparing each category allow us to conclude that structural differences exist between the United States andArgentina at each moment of the cycle of the valorization of capital.
Article
Full-text available
The debate on the decline of the terms of trade in dependent countries was never fully integrated into the Marxist theory of dependency. The attempt to articulate it through the category of unequal exchange was not particularly systematic. This paper seeks to recover those debates and will attempt to account for the relevant articulations in the light of a present revitalisation of studies in the field of Marxist dependency theory. To this end, we will recover the classical discussions around unequal exchange in order to discuss their points of contact with the Marxist theory of dependency and some contemporary debates around the transfer of value and the super-exploitation of labour and nature.
Article
In his macro-monetary interpretation of Marx's theory of value, Fred Moseley claims that Marx's prices of production should be considered as the long-run equilibrium condition of capital reproduction under the assumption of given technology and given capital distribution. Moseley's methodological interpretation depends on the claim that the general rate of profit is completely predetermined in the first two volumes of Capital. I argue to the contrary that though Moseley shows the inadequacy of the Standard Interpretation, he fails to provide a convincing description of Marx's category of prices of production. The production of the new total value and total surplus-value cannot be considered as simply determined by the initial conditions of production; if we want to describe how prices of production are formed and the role they play in the social reproduction of capital, we should recognize that in social reproduction this process develops temporally through an intertwined relation between the production, circulation and distribution.