Fred B. Moseley fmoseley at
Thu Sep 22 22:21:52 MDT 1994

I want to make some comments on Steve Keen's interpretation of Marx's
theory of value recently discussed on this network, and since I am a
recent subscriber, I thought I would introduce myself first in a sepa-
rate posting.  The comment on Keen will follow in a separate posting.

My name is Fred Moseley, and I teach economics at Mount Holyoke
College (Massachusetts, USA).  My main interests are Marxian value
theory and crisis theory.  I have a recent book "The Falling Rate of
Profit in the Postwar United States Economy" (Macmillan 1991 and St.
Martins 1992), and also a recent edited book "Marx's Method in
Capital:  A Reexam-ination" (Humanities Press 1993).  Recently, I
have been working mostly on the latter subject - the overall logic
of the three volumes of "Capital".

My book on the falling rate of profit derives rigorous estimates of
the key Marxian variables (the rate of surplus-value, the composition
of capital, and the rate of profit) for the postwar U.S. economy.
The results suggest mild support for Marx's theory:  the rate of
profit declined (approximately 20%) because the composition of capital
increased faster (40%) than the rate of surplus-value (15%).  These
results are contrary to earlier estimates of the Marxian variables
presented by Tom Weisskoff (Cambridge Journal of Economics 1979) and
Ed Wolff (American Economic Review 1979), whose estimates showed
the rate of profit declined because the rate of surplus-value
declined, not because the compostion of capital increased.  The main
reason for these different results is that Weisskopf and Wolff ignore
Marx's distinction between productive labor and unproductive labor.
Thus I think my book would make a contribution to the recent
discussion on this network of the empirical relevance of Marx's
theory of the falling rate of profit.

My book also presents a Marxian analysis of the "conventional" rate of
profit (as distinct from the Marxian rate of profit) (essentially the
rate of profit on the total capital, rather than the rate of profit on
the productive capital only) which declined much more than the Marxian
rate of profit (approximately twice as much).  The main conclusion is
that the main cause of the decline of the conventional rate of profit
was a dramatic increase in the ratio of unproductive labor to produc-
tive labor in the postwar U.S. economy (an increase of approximately
75%).  The relative increase of unproductive labor meant that a larger
share of the surplus-value produced by productive labor had to be used
to pay the wages of unproductive labor and thus a smaller share was
left over as the profit of capitalists.  This relative increase of
unproductive labor had a greater negative effect on the conventional
rate of profit than the increase in the composition of capital.

My paper in the edited book is about the infamous
"transformationproblem" ("Marx's Logical Method and the Transformation
As the title suggests, the paper attempts to give more attention
to Marx's logical method and to place the discussion of the
"transformation problem" within this context.  I argue that the
prevailing interpretation of the "transformation problem" is based
on the logic of linear production theory (i.e. of Sraffa's theory),
which is fundamentally different from Marx's theory.  The two main
differences which I emphasize are:  (1) the order of determination
between aggregate economic magnitudes and individual magnitudes,
especially the magnitude of profit (for Marx, the prior determination
of the total amount of surplus-value prior to and independent of its
division into individual parts); and (2) the determination of the
quantities of capital (constant capital and variable capital) which
are inputs to capitalist production.  I argue that these components of
capital are taken as given in terms of money, as the initial sums of
money which initiate the circulation of capital (i.e. the M in M-C-M'), and
are not derived from given physical quantities of the technical
coefficients of production and the real wage, as in linear production
theory.  The question of Volume 1 is then how this given sum of money
increases its magnitude, i.e. is transformed into capital.  I conclude
that, if the logic of Marx's theory is correctly interpreted, then
there is no "logical error" in Marx's determination of prices of
production in Volume 3.  Therefore, the long line of criticism of
Marx's theory, from Bortkeiwicz to Steedman, does not in fact apply to
Marx's theory, but instead applies only to the misguided attempt to
interpret Marx's theory in terms linear production theory.

Most recently, I have been working on the hitherto little-known
"second draft" of Capital, which is part of the "1861-63 manuscript",
parts of which have been only recently published in English for the firrst
time as volumes 30-34 of the International Publishers' 50 volume
edition of the "Marx-Engels Collected Works".  (The "Theories of Surplus-
Value" are also part of this "1861-63 manuscript" and have
been republished as part of these 5 volumes.)  I think that this
second draft of "Capital" provides a vital link between the "Grundrisse"
and "Capital".  It provides many insights into the
logical structure and content of "Capital", similar I think to the
publication of the English translation of the Grundrisse in the
1970s.  I have been concentrating my study of this manuscript on the
light it sheds on the two main differences between Marx's theory and
linear production theory mentioned above.  I will save for another
occasion more specific comments, but I just wanted to call attention
to this important manuscript, and ask if anyone else has been working
on it.

I would be happy to discuss further any of the above points with
anyone who is interested.  I look forward to further discussions.

Fred Moseley


More information about the Marxism mailing list