Given the four notes previous to this one, it now becomes obvious why, in his introduction to Money and Totality, Moseley introduces this quote from Marx:
“The method of analysis which I have employed, and which had not been previously applied to economic subjects, makes the reading of the first chapters rather arduous …”
Moseley appears to offer this as evidence that objections to Marx’s theory arise from misunderstanding or misreading of Marx’s theory. So what is this misunderstanding that might arise from the first chapters of Capital?
In the first chapters of Capital, Marx begins by describing the capitalist mode of production as “an immense accumulation of commodities”. Marx argues that, as useful objects, these commodities seem to have little in common with one another. However, Marx then goes on to explain that these commodities do have something in common: first, they are all products of human labor; and, second, they must be useful for someone other than the producer who created them.
Yet, even as socially useful products of human labor, commodities are not all alike: while almost all commodities serve directly as useful objects, one commodity, money, has no directly useful function. This commodity serves instead as the material to express the values of the other commodities in transactions among members of the community of commodity producers. Another commodity, labor power, is unique in that it is the source of the values of all of the other commodities.
What Moseley fails to mention about part one of Capital is the distinction to be made between money and labor power. In Marx’s approach, labor power imparts values to commodities; while money imparts their prices. From the very beginning of Capital, therefore, value and price are entirely distinct and separate things. The whole of the objections to Marx’s approach thus hinge on the rejection of his argument that labor power is the source of value, while money-price is merely the expression of the value of commodities.
It is important to insist that prices and values are in no way identical to one another as categories in Marx’s analysis. I think Moseley violates a basic assumption of Marx’s theory when Moseley suggests, (but never actually states, at least at this point), that prices and values don’t diverge in Marx’s theoretical model of the mode of production. In the opening chapters of Capital, Marx’s model insists that values and prices can and do diverge from one another:
“Magnitude of value expresses a relation of social production, it expresses the connexion that necessarily exists between a certain article and the portion of the total labour-time of society required to produce it. As soon as magnitude of value is converted into price, the above necessary relation takes the shape of a more or less accidental exchange-ratio between a single commodity and another, the money-commodity. But this exchange-ratio may express either the real magnitude of that commodity’s value, or the quantity of gold deviating from that value, for which, according to circumstances, it may be parted with. The possibility, therefore, of quantitative incongruity between price and magnitude of value, or the deviation of the former from the latter, is inherent in the price-form itself. This is no defect, but, on the contrary, admirably adapts the price-form to a mode of production whose inherent laws impose themselves only as the mean of apparently lawless irregularities that compensate one another.”
The objections by Bortkiewicz, Sweezy, Morishima and Steedman to Marx’s theory that,
“(2) The rate of profit changes in the transformation of values into prices of production, so that there are two rates of profit in Marx’s theory – the ‘price rate of profit’ and the ‘value rate of profit’ – which are not equal and which may have divergent trends.”
is actually no objection to his theory at all.
Marx assumes from the outset that prices and values of commodities can and do diverge. He insists on this because it will eventually be fundamental to his entire argument that capitalist accumulation progressively undermines the premises of simple commodity production.
A correct reading of Marx’s theory, therefore, begins with the assumption that prices and values can and do diverge. Marx’s theory has so long been vulgarized to the statement, “price equals value”, that most Marxist theorists today no longer realize that he actually argued the opposite applied to the capitalistic mode of commodity production:
Prices of commodities actually have no direct relation to their values in the capitalist mode of production.