The law of value under capitalism in the Essays of Isaak Rubin - Vladimir Dunaevsky

Isaak Rubin Essays on Marx's Theory of Value

A critique of Rubin's Essays on Marx's Theory of Value.

Source: Under the Banner of Marxism, 1929, nr. 2–3, pp. 67–91.12

I. The problem of the historical foundation (/justification) of simple commodity production and Rubin's Essays.
II. The initial error in the study.
III. Formulation of the problem in Essays.
IV. The average rate of profit – average weighting of individual value rates.
V. Mechanical opposition of sphere of circulation – sphere of direct production.
VI. The price of production in the sphere of circulation and of direct production.
VII. The dialectics of the process of the formation of the average profit in the Essays of Rubin.
VIII. Historical lessons and Essays of Rubin.
IX. Conclusions.

The great scientific worth of Rubin's Essays on the Theory of Value is well known. It highlighted the significance of the sociological method in the system of study of Marx. In the Essays brilliantly is worked out the problem of the theory of commodity fetishism, as a "propaedeutic to political economy." Essays profoundly, talently unfolded the historical and social distinctness of the economic categories in Marx's system. Essays are also not without a number of errors, the correction of which is necessary for a successful fight against vulgar naturalism. So far, the discussion touched upon the problem of abstract labour, the form and content of value. In the shadow remains the question, what the form is of the manifestation of the law of value under capitalism, in the exposition of which, we submit, the author of Essays admitted mistakes. It is not necessary to dwell on the importance of this issue! This part of the study of Marx has been and is exposed to concentrated attacks of bourgeois and revisionist criticism.

I. The problem of the historical foundation of simple commodity production and Rubin's Essays.

The law of value is traced by Marx at different stages of abstract analysis. At the first stage of the study one deals with the simple commodity form of economy. 'The law of value, – Marx wrote, – is abstracted from capitalist production.'3 The abstract scheme of simple exchange relations – Marx more than once stated – reflects a historically real relation. 'It is quite apposite, – Marx wrote, – to view the values of commodities not only as theoretically prior to the prices of production, but also as historically prior to them.'4 The abstract progress of Marx's analysis, – Engels wrote – 'is simply the reflection, in abstract and theoretically consistent form, of the historical course; the reflection is corrected, it is corrected in accordance with laws provided by the actual historical course.'5 Capitalist and simple commodity production are not separated from each other by a deep gap, although they represent historically different types of economies. The latter serves as a "springboard of capitalism," as A. Kon aptly put it; 'it carries within itself the germs of all the contradictions of capitalism.' The distinctive feature of a society of equal commodity producers is the absence of capitalist exploitation. But how can it be denied that the relation of capitalist exploitation completes in entirely new originality that process of social differentiation, which occurred in the context of simple commodity production.

For Rubin, 'the transition from simple value to production price, is a theoretical abstraction, not a picture of the historical transition from simple commodity to capitalist economy.'6 In this question Rubin wrongly commentates Marx. 'Now that other works by Marx are available to us, – Rubin writes, – we know with certainty that Marx himself was strongly opposed to the view that the law of value was in force in the period preceding the development of capitalism.'7

Rubin refers to Marx's note against Torrens, contained in Theories. In the by Rubin given quote we do not find his commentary. Why is Marx here criticising Torrens? Exclusively because 'Torrens reverts to Adam Smith,' who limited the action of the law of value to "the early period" of social development. Not a single line of Marx here refutes the action of the law of value in a society of equal commodity producers.

What is the course of Marx's arguments? Under capitalism, the commodity-form is the universal form of production relations. According to A. Smith and Torrens, the law of value 'is valid at the early stages of exchange.' Marx accuses them of inconsistency: if the law was valid under embryonic exchange relations, then how can it be invalid under capitalism, where the commodity form became the universal form of production relations.8

The second most important argument of Rubin is that 'the historical setting of the problem leads to ignoring the historical character of the category of value.'9 Putting up this argument, Rubin enters the methodology of the metaphysical historicism of K. Bücher. The reaction against the "natural" laws of the classics and the "old-historical school" took in the works of K. Bücher a metaphysical imprint. Bücher does not understand, that 'epochs in the history of society are no more separated from each other by strict and abstract lines of demarcation than are geological epochs.'10 The metaphysical scheme of Bücher stands opposed to the dialectical scheme of the history of social forms of the author of Capital – the triumph of classical application of dialectics in historical analysis. It has not yet sufficiently been appreciated, given thought, commentated! It is enclosed on twelve pages of the history of the development of the forms of value of the first volume of Capital. 'What seems to be an abstract and at times purely deductive mode of exposition deals in reality with a gigantic collection of factual material on the history of the development of exchange and commodity production,' wrote Lenin.11 Each type of value form reflects a specific type of economic structure, "a way of dialogue" between producers in social labour.12 Each form of value is historically distinct and different. This does not prevent Marx to view every form as a result of a long historical series of developing formations. Here, 'each subsequent form is born from the previous one not just by the destruction of the first, but in such a form that the first "is sublated" (wird aufgehoben) in the second, as it is considered surpassed and simultanously preserved in the second.'

In the article, published in 1895 in the Neue Zeit, Engels wrote: 'the law of value has prevailed during a period of from five to seven thousand years.'13 The scheme of the history of the development of the form of value of Marx clarifies, how one dialectically must understand the thought of Engels. "The law of labour expenditure" existed throughout this period in qualitatively different forms of expression: different forms of value (accidental, expanded, general) expressed qualitatively-different economic formations, different "stages" of social-labour connections, different stages of "reification" of production relations and, therefore, specific different patterns (/laws, закономерности).

If in Bücher exchange appears only in the "city "and "national" economy, then in Marx it exists already in the initial social forms. But this does not turn the commodity into a non-historical, "natural" category. Exchange existed already in the primitive tribal community in the type of the accidental form of value, which is qualitatively different from the general, monetary form, and simultaneously with it in the historical process of the regeneration of labour expenditure into labour value, as the universal regulator of the whole social production. Only for metaphysical historicism: if the law of value, occurred in the pre-capitalist structure, then it loses its historically-limited character. For dialectics: the law of value, really existing historically in the "society of simple commodity producers," under capitalism it gains a new social distinctness.

Does not, however, the historical foundation of simple commodity economy lead to the idea of ​​the historical-comparative method of study of all problems of political economy? Not in the least! It requires only that the abstract scheme is studied in all its concreteness! 'The logical (abstract. V.D.) method of approach, – Engels stressed, – allows the examination of each factor at the stage of development where it reaches its full maturity, its classical form.'

Thereby Engels sharply dissociated himself from the main position put forward by I. Stepanov: 'in order to disclose fetishism, the pattern of capitalist economy one needs to go down to the pre-capitalist production.'14 For Bogdanov, likewise, the historical reality of "simple" economic categories gives the key to the purely psychological recesses of the scientific discoveries of Marx, highlights the very course, the sequence of the study of Marx. This key – is the historical-comparative method of the German historical school.15

Historical foundation is completely unrelated to such a psychological formulation of the study method. The latter by no means constitutes a psychological law of scientific creativity; it should give only "starting points," "basic points of view" in research. Historical foundation absolutely does not suggest that the patterns can be "disclosed" through the historical-comparative descriptive method.

The opponents of the historical foundation of the law of value in simple commodity economy inevitably fall back to the views of B. Groce, Carl Dietzel and Bogdanov. They are forced to found the law, either by a "purely ethical postulate of equality", or "the requirement to create for the analysis an ideal scheme of exchange relations," or, finally, a biological principle to maintain in each individual economy an equal balance between "expended" and "received" physiological energy.

Let us shortly stay on the arguments of A. Bogdanov, which are repeated by all supporters of the "physiological version of abstract labour." Does the non-historical scheme of Bogdanov give an answer to the main, us interesting problem? Does it explain why the "energy balance of the expended and received" of the individual economy is realised in exchange-proportions? Does it found why the exchange proportions gravitate toward labour-value? No, it passes by this central question. This scheme does not give explanation of the social distinctness of the law of equilibrium of commodity economy. The law of value is derived a priori. Only historical analysis reveals, that the law of value is not an "axiom," which can not be proven by historically real factual reality.

Essays take up arms against the stated views. But their author does not want though to recognise, that only a historical foundation deals the blow to the revisionists, who turn the theory of value into an "axiom."

The historical understanding for Engels was the best "antidote" against the transformation of abstract analysis into a hypothesis, into a "methodological fiction," not reflecting the patterns of concrete reality. W. Sombart and C. Schmidt understood the law of value in a Kantian fashion. 'In Marx, – Sombart writes, – value is an aid of our thinking, not an empirical, but a conceptual fact.' 16 By what arguments Engels sharpens the criticism of the "Kantian students of Wolffian metaphysics"? Engels explains to them that the abstract course of analysis reflects concrete-historical generalisation.17

The opponents of the historical foundation of simple commodity production do not want to understand that only a concrete-historical study has the right to reveal, whether certain aspects, features of different historical structures correspond with each other. When can the point of view of Rubin be recognised as correct? In what case does the abstract analysis of the law of value in simple commodity economy not reflect real concrete relations? If the by Parvus and S. Frank defended position would be right, that historically 'in exchange among craftsmen the law of value did not occur in the presupposed sense of Engels.'18

Regarding the theory of value Essays gives a good rebuff to the revisionist swoops of S. Frank. But they did not found by concrete-historical proof, do not use the enormous research, collected by the German historical school, which upset the ideas of Frank and Parvus. With a certain approximate regime of relations the Medieval regional towns in Western Europe, especially Germany – are the classic example of the real existence of simple commodity structures.19

The best illustration of the historical veracity of the position of Engels: the numerous "statutes" of magistrates, regulating the relations of production of the craft of a city, and the economic doctrine of the canonists, summarising the real economic relations of their time. The teaching of St. Thomas Aquinas about "Justum pretium" (just price) is devoted to the proof of the need to maintain relations of equality of commodity producers. In legal and ethical form the doctrine of "Justum praecium" presented the commitment of exchange on the basis of equal equivalents and equality of the subjects of exchange.

The method of conducting a free craft economy W. Sombart called 'economy on the principles of expenditure: first is established the expenditure and on it already the income is defined. The size of consumption is established strictly objectively.' 'This principle of management has found its expression, – Sombart remarks, – in the idea of budgets, corresponding to this situation.'20

Historical analysis reveals the historical-real principle of different profitability, on the basis of which are connected the formally-independent commodity producers. Trade of equal value for equal labour time besides compensation for expenses on means of production should provide to each subject of exchange a historically prevailing "habitual level" of life, expressed in a determined sum of exchange values. This – is that volume of consumption that is necessary to compensate for the expended "socially-average" labour force, under typical social conditions of production, plus the maintenance of the "socially-average" composition of a family. The artisan, calculating the duration of his labour, conforming with the accepted norm of the budget according to the existing exchange-value, therewith expressed his expenditure in "social units" of labour, impersonal, homogeneous, uniform, abstracted from the concrete forms. The magnitude of the value would to have had been determined by the factual duration of the producer's individual production labour, but socially expressed in the form of expended on a given segment of time of one and the same, socially-average labour forces. This is historically real principle of equating labour also is connected with the gravitation of market prices toward labour values.

It is understood, that political economy is interested in the medieval city only to that extent that it helps to know the laws of simple commodity economy. The relation of simple exchange society here is isolated (выделяются) from the variety of economic structures of medieval economy, by abstraction from the relations, taking place between feudal lords and peasants, between merchants and feudal lords, from the influence, that was rendered on the regional medieval city by merchant capital and of the feudal estate.

Theoretical generalisation does not deprive study of its historical correctness, if it is true it reveals only the characteristics of the main features of reality, "selecting" those from it, that determine, formulate its specific distinctive identity, its typicalness.21

In "pure form" the relation of equivalent exchange according to labour value appeared in the structure of production relations inside the artisan city, among its artisans. These relations also are, first of all, in the form under the here studied law of value. This is not understood by Parvus, for whom 'the law of value could not have taken place' because the relations of the artisan city with the peasant districts were relations of exploitation: the urban artisan, his craft organisation dictated the price to the village consumer!

The relation of exploitation by the town of the village still did not eliminate the equivalent exchange between artisans. The entire city as a whole receives a portion of the surplus product of the peasant districts; in the exchange with the latter the entire urban commodity producers enjoyed the same, equal conditions of exploitation.22

II. The initial error in the study.

What conclusions should be drawn from the concrete study of the laws of simple commodity production? What are the laws of social equalisation of labour? Equality of labour in the process of exchange signifies equality of factual labour in the domain of direct production.

In the chapter of Essays, devoted to abstract labour, the bewildered reader learns that 'social equality of labour expenditures of various types (i.e. of different industries. V.D.) – does not in any way represent equality of the factually expended hours.'23 What are the consequential-logical conclusions from the outlined position? 'We would have to admit that the social equalization of labor in the process of exchange is carried out in isolation of dependence on quantitative aspects which characterize labor in the process of direct production (for example, the length, intensity, length of training for a given level of qualification, and so on).'24 The author of Essays explains such 'false conclusion' 'might arise by a misunderstanding,' misinterpretation of his thought. The admission of the author one can accept, only violating the elementary logic of deduction! By what ways, then, can market price gravitate toward labour value, if the "social magnitude of labour" is entirely unconnected with the factually expended labour on a given commodity!25

Essays, usually striking the reader a strong and consequential thought, in this place loses its usual prominent clarity! In the chapters of Essays, devoted to "socially-necessary" labour, the reader meets with completely different laws of equalising labour. Here – market values ​​are determined by the individual values, by the determined labour in the important enterprises of a given industry. Under equilibrium of social demand and supply, apart from other conditions, market prices correspond with market values, and the equality of the value of commodities reflects the factual equality of the on them produced individual labour expenditures.26

For Marx, the individual labour expenditure, expressed in "social" units of depersonalised labour, appears through the "immanent measure," the "immanent measure" of the magnitude of value. It is fully understandable why for Rubin 'this term cannot be treated as completely successful, since in a superficial reading it makes the reader think mainly about a measure of equalization rather than of causal analysis of quantitative changes of events' (pp. 126–27). In what sense is Rubin prepared to consider labour the "immanent measure" of value? 'Only in that sense that the quantitative changes of labour, necessary for the production of the product, cause quantitative changes in the value of the product.'27 For Rubin "this term" expresses only a relation of dependency. But for relations of dependence it is in fact not eligible. This term perfectly conveys the idea of ​​the author of Capital; the proportion of exchange value reflects the ratio of the factual magnitude ​​of duration of individual labour expenditure in various industries. For Rubin the magnitude of value only changes from changes in labour productivity, but labour expenditure in its factual determination, evidently, does not find itself reflected in the magnitude of value. 28 This error affected also the (Rubin's) presentation of the category of abstract labour in Marx's system. Essays brilliantly founded the historical and social definiteness of the concept of abstract labour, but mistakenly excluded individual labour expenditure from the very content of this category.29

The by us outlined mistake affected also the definition by Essays of the object of study. They do not depart from the Marxist tradition, when the subject matter of political economy is defined as 'production relations specific to the capitalist economy as they interact with the productive forces of society.'30 Entirely correct, productive forces, as such, are considered to be the object of technical sciences. But one must not forget that there is a purely-technical existence of the productive forces only within single company cells. Their unification in a system is inconceivable outside the social process of distribution of commodity values, the numerous series of purely-social acts of buying-selling of labour forces, regrouping of capitals, etc.!

Social-objective patterns do not express anything else, than the laws of the process of social bonding among themselves of individual economic cells. This process also constitutes the material content of these relations of production. The laws of social ties display the particularity of this process of combining the productive forces of individual businesses in a unity, based on social division of labour.31

The error of Essays is that they study the relations of production, outside the manifestation of them in the process of the social arrangement of productive forces. Under this understanding of the subject of study the particularity of the social structure will not find an explanation in the sphere of direct production.

When can the law of equality of commodity producers in the sphere of circulation be scientifically understood? If one studies the particularity of the process of distribution of the labour forces in simple commodity production, which takes place on the basis of account in a particular social form of the factual duration of labour operations.

In polemic against S. Frank Essays reveals the inner fabric of the law of equality of commodity producers.32 But this whole criticism hangs in the air, if the 'equality of socially-average labour does not reflect the equality of labour in the sphere of direct production.'

The initial error of Essays is all the more unacceptable since Rubin repeatedly expressed a correct understanding of the relationship between the sphere of circulation and direct production, as "differences within unity."33

III. Formulation of the problem in Essays.

For Parvus and Frank the problem of the historical reality of the law of value in simple commodity economy has not any relation to the study of it under capitalism. Essays of Rubin is a visual illustration of the falseness of such views.

In the exposition of the law of production price Rubin "distracts" from the basic conditions, under which the law of value can be realised in commodity society. He is silent on the central question: whether under capitalism, in one form or another, the very principle of the gravitation of the market price to labour value is preserved. Meanwhile, under what condition is the theory of value confirmed also for the capitalist society? When the study finds: the price of production – is modified labour value, variously fluctuating individual rates of profits represent a quantity of redistributed mass of labour value. Only then the law of production price will be that mechanism, through which the law of value exerts its action.

The reality of the latter under capitalism is confirmed for Rubin, evidently, by the one fact of the existing dependence of price changes, production prices – on changes of the level of labour productivity.34 But this dependence is manifested in the sphere of circulation. Its "empirical reality" is not denied by any representative of bourgeois economy, for whom, however, there exists no real trend of price movements toward labour value.

What does the noted dependence express by itself, if prices do not tend toward labour value? An exclusively functional dependence: labour productivity is considered as one of the factors of price formation, similar like the relation of demand and supply, "marginal utility," etc. If prices do not gravitate toward labour value, then the "basis" of the relation of demand and supply is not disclosed in the sphere of direct production.35

Simple commodity and capitalist economy are studied entirely independently, isolated from each other. Where is the source of this error? To what conclusions does the viewpoint lead, developed by Marx: simple commodity economy – is the historically real prius of capitalist economy? The conditions of realisation here of the law of value – are historically concretely defined. Under capitalism, commodity relations persist. That is, if the law of value takes place here, then must be preserved also the concrete-determination of the conditions of its realisation in the simple exchange society in the form of gravitation of price toward labour value.

Denial of the historical foundation affected also on another error of Essays. It denotes only the great "complexity" in the manifestation of the law of value under capitalism. Before the readers is not jutted with all the sharpness of dialectics the "self-denial" here of the law of value, realised in simple exchange society. Only under historical understanding one must not ignore the historical specificity of each stage of analysis. The above outlined phase of study already does not appear, as different stages of "complexity" and "simplicity" of the law of value. With all the sharpness is exposed the entire inadmissibility of the mechanical reduction of a socially different economic structure, which capitalism is, to a "less complex", "simple" commodity form of society.

For Rubin the formula of equilisation of labour in capitalist conditions comes out merely more complexly, than in simple commodity economy, namely, as derivative of the formula of equilisation of capitals.36 Equilisation in social production in the first case is set in accordance with the exchange proportions of the labour value of each industry. Equilibrium in the allocation of capital, – remarks also Rubin, – is reached under equilibrium of price by the prices of production, ie, under quantitatively inequal exchange proportions by market values, as they are driven by different organic compositions of capitals in equal-sized units in different industries. Under capitalism, therefore, the law takes a qualitatively different form of manifestation: prices tend toward prices of production, which correspond to an unequal market value.

Historical foundation does not obscure, but, on the contrary, highlights the contradiction between the conditions of the realisation of the law of value in simple exchange society and its manifestation under capitalism.37 It poses before study the problem: to trace, by what ways in historically different economic structures "is preserved" the law, regulating the relations of proportionality of the "society of equal commodity producers."

The formulation of the problem gives a direction of study. Essays could not put like this the study: for it, we repeat, under capitalism we are dealing not with a different form of manifestation of the law, but only with its complication.3838

The analysis of Essays did not point to the fundamental question: in what ways under capitalism does value fulfill its function of social regulator of the distribution of social labour, if 'with the transformation of values into prices of production, the very basis for determining value is removed from view,' 'profit appears as something standing outside the immanent value of the commodity.'39

The solution to this problem is impossible without a study of the genesis of the average rate of profit. Errors in the formulation of the problem affect also the methods of its solution. The author of Essays does not point the research at the study of the character of the very process of the transformation of market values in different industries in specifically neat (отличные) prices of production.

What tasks does analysis face, apart from the obligatory quantitative determination of the law of value, if it directly can be derived from the mere fact of the dependence between changes of the labour productivity level and price movements? The entire study boils down, to trace: through what further additional links is established the above-noted dependence under capitalism, in comparison with simple commodity economy, what "complication" does the capitalist structure bring in the chain of these dependencies.

The entire problem is solved by the fact that a simple commodity economy has 'four-term model of causal connection between the individual categories,' whereas in the capitalist economy – a six-term model, that 'the central links of the theory of the capitalist economy (price of production, distribution of capital. V.D.) do not rule out the above mentioned links of the theory of value, but, on the contrary, under further analysis will inevitably lead to them, and together with them is included in a general theory of equilibrium of capitalist economy.40

For Rubin it is entirely enough, that 'production price can only be explained by changes in productivity of labour or in the labour value of products.'41 The task of study for Marx is to prove, – that the price of production as such (an und für sich), represents a quantitative redistribution of labour value, that the basis of the origin of the average rate of profit – is the direct process of production of value.

IV. The average rate of profit – the average weighted individual value rate.42

How was the solution of the problem impacted by the defect of its formulation? In Essays is not displayed the very process of the formation of the average rate of profit. Whence also the mistake in commentary of the study of Marx.

'In our presentation of Marx's theory, – Rubin writes, – different rates of profit in different spheres do not serve as a necessary intermediate link for a theory of the average rate of profit.' 'We assume, – Rubin continues, – that in Marx's system the magnitude of the average rate of profit is derived from the mass of total surplus value and not from the different profit rates, as it may seem from a first reading of Marx's work.'43

Rubin is not alone; a similar interpretation of the law of production price is very widespread. 'This place represents non-Marxism in Marx himself,' wrote Bulgakov in the days of his Marxist youth.44

How expresses in this regard the author of Capital? Marx derived the average rate of profit from the individual value rates. 'As a result of the differing organic composition of capitals, – Marx wrote, – profit rates prevailing in different production are originally very different. These different rates of profit are balanced out by competition to give a general rate of profit, which is the average of all these different rates.'

'These particular rates of profit in each sphere of ​​production, – Marx strongly emphasises, – are to be developed from the value of the commodity. In the absence of such a development, the general rate of profit (and hence also the production price of the commodity) remains a meaningless and irrational conception.'45 'Here, of course, in Marx, – correctly observes M. Smit, – it is not about a simple average of group averages, but about what in algebra is called the "general average," and in statistics is termed the "weighted average."46 The average rate of profit, for Marx, – is the weighted average of individual rates of profit, as they are given by the different organic (technical) composition of capitals. The role of weight plays 'that relative share of the total social capital swallowed up by each particular sphere of production.'47

The opposition, conducted by Rubin, is artificial and far-fetched! In the process of circulation only is redistributed the already produced mass of surplus value. The average rate of profit, "weighted" from the value rate, 'can not be anything other than the total mass of surplus-value, distributed between the masses of capital in each sphere of production in proportion to their size.'48

Of what consists the principle of the weighing? In the summation of the weighted quantities by their specific weight. To what is the average "weighted" rate of profit equal? Let us answer directly – for Rubin: – 'the quantity of surplus labor which belongs to each 100 units of capital in each sphere, multiplied by the size (ie the number of hundreds) of capital invested in the given sphere.' 49 Weighing, set out here, as a simple arithmetic account, by itself, represents a very complex process, in which to "weight" belongs the role only of a "regulatory amount."

V. Mechanical opposition of sphere of circulation – sphere of direct production.

'The specific character of Marx's theory of production price, – writes Rubin, – consists precisely of the fact that the entire question of mutual relations between surplus value and profit is transferred from individual capitals to the total social capital.'50 The law of production price, social-objective patterns in general are realised in the sphere of circulation. In the sphere of production, in different industries – (there are) different organic compositions of equal-sized capitals. Only by mechanical cleavage of these fields of the economy, in the study of the law production price can be "distracted" from the individual value rates of profit. For the dialectics of Marx social-objectively analysis of the "universal" must disclose the main, typical patterns of the "individual." 51 The patterns of social capital, for Marx, express the typical patterns of processes connecting, uniting individual capitals between industries and within each.52

Rubin unacceptably opposes the formation of the average rate of profit, as a magnitude derivative of the mass of total surplus value, – to its formation from different rates of profit. The author of Capital did not resolve the question as Rubin proposes to solve it. Marx did not ignore, but studied the problem of the relation between surplus value and the rate of profit of capitals of different industries of production. For Marx the law of the formation of average rate of profit expresses the patterns of these relations, the tendency of individual rates of profit toward the average rate.

Still during the life of Engels C. Schmidt and Fireman tried to "resolve the contradiction" of market value and price of production on the grounds that the prices of commodities equal the sum of labour value, and, therefore, the average profit amount is derivative of the total mass of surplus value. How Engels related to such theories, the pages of his preface to the third volume of Capital reveal well enough. 'Fireman has indeed placed his finger on the salient point, – wrote Engels, – But the undeservedly cool reception of his able article shows how many interconnecting links would still be needed even after this discovery to enable Fireman to work out a full and comprehensive solution. And this is explained, – Engels emphasised, – not only by the incomplete form in which Fireman left his discovery, but also by the undeniable faultiness of both his conception of the Marxian analysis and of his own general critique of the latter, based as it was on his misconception.53

Only the theorists of the "social school of distribution without values" deal in analysis – exclusively with the "social capital," "only" with the social aggregate product of labour, "only" with the results of processes in the sphere of competition.54 But Rubin, as is known, exposed the idea of ​​"modern economists in the West," to a sharp, correct critique.

What can explain his mistake in such formulation of the problem? The presentation of the law of production price clearly evinced errors in the definition of the subject of study. Essays goes past the manifestation in social relations between individual capitalists of the process of the combination of the productive forces of individual businesses into a system of social production. That is why it also does not trace, how is reflected in the very law of production price the internal-contradictory process of combining individual capitalists into a single class.55

Marx specially dwells on the fact that the organic composition of equal-sized capital here reflects the technical composition ('the conjunction of a certain number of workers to a certain amount of means of production'). The law of production price displays the law of motion of individual capitals in the direction of such a combination of the productive forces at equal-sized units, which creates an objective equal condition of exploitation (the rate of exploitation is everywhere the same). This pattern establishes objective intimate interdependence between individual capitalists, unites them in 'a veritable masonic fraternity in the struggle against the working-class, as a whole.'56

VI. The price of production in the sphere of circulation and of direct production.57

Prices of production coincide with individual market values only under conditions of the same organic composition of capital in all industries. Technological progress is linked to the constant changes in the different industries of the technical composition of capital, with the "pulling (подтягиванием)" of the organic composition of backward industries – to the level of industries of high composition. The uneven technical development of individual branches under capitalism does not establish a single-type, organic composition of capital. Patterns of change of technical, consequently, organic composition of capital in different branches can not be understood without examining the processes of the transfer of capital. In which periods is there a technical upgrade, massive re-equipment? When the long-term reduced demand for commodities of a given industry is not eliminated by a simple reduction in the production scale through outflow of capital into other sectors.

In its turn, the direction of capital transfers is incomprehensible, if one distracts from the processes of the moves (/advances, передвижки) of commodity values ​​from one industry to another. Capitals rushes only into those industries, that are realising high conjuncture rates of profit. The movement of flows of commodity values reflects the process of the reallocation of the mass of labour from one industry of production to another. The realising individual rates of profit are determined by the conjuncture of the market, the ratio of social demand and supply for products in the given industry. The conjuncture rates of profit, of course, do not correspond with those rates that are given organic compositions of capital in different industries. Industries of high conjuncture realise not only the produced value rate of profit, but also attract to themselves the surplus value of other industries. The capitalists of other industries are forced to buy at the high market conjuncture prices. How does this circumstance affect the realised by them at themselves profits? The latter will decrease if the volume of demand for the given commodities remains unchanged, or does not proportionally increase.

The changed relation of demand and supply creates a relatively more favourable conjuncture once for one, then for another industry! It is easy to grasp the laws of the alternating fluctuations in the moves of social labour from one industry to another. Here occurs a steady trend towards the uniform distribution of realised surplus value per unit of capital. 'The general rate of profit only ever exists, – Marx emphasised, – as a tendency, as a movement of equalization between particular rates of profit' (1981, p. 488). The price of production in the sphere of circulation acts, as a prominent tendency in the process of the distribution of the mass of social labour, the redistribution of social total mass of surplus value.

The average rate of profit in the sphere of the market can not be anything else than the average-weighted level of profit, formed from a variety of value rates. Why? The general rate of profit in the sphere of the market 'is only a late result of a long series of fluctuations, spanning a very lengthy period.' The individual links of the process are affected by the action of demand and supply, deflecting realised profits from their value sizes. But the price of production is realised, in fact, under equilibrium of social demand and supply, under which the impact of competition is decreased, eliminated, paralysed and, therefore, can not determine and account for the absolute level of the average rate of profit in the sphere of circulation.

Insofar as the price of production is established irrespective of the influences of demand and supply, the source of the average profit must be found not in the market, but in the conditions of direct production of value. Pressure of competition deflects realised profits from their value rate. It also brings closer the market price to the price of production, the conjuncture profit to the average level, weighted from the various value rates.58

Rubin limits the process of the formation of the average rate of profit only to the movement of capitals. However, the latter process is only a consequence of the processes of redistribution of commodity values. Capitals move into industries of high conjuncture after, as a result of a long series of acts of sale of commodities, the process of distribution of surplus value ensures there the realisation of more profit per unit of capital.

Rubin is looking for a unified response, essentially, on two different questions: 1) how is carried out the tendency to an equal rate of profit, and 2) in which form the process occurs of the redistribution of the mass of surplus value.

The first process takes place continuously by means of the regrouping of capitals. Without this process, the tendency towards an equal rate of profit would have been replaced by permanently fixed differential levels of profit in different industries.

The process of redistribution of the total mass of surplus value can occur only through the realisation of commodities on the market, simultanously with the movement of flows of commodity values​.59 In what ways can this process pass through the regrouping of capitals? Because the redistribution of already produced mass of surplus value, i.e. under the already determined way of the redistributed capitals.

These places in Essays become, verily, a "Sphinx's riddle!" 'But if the relationship between the profits of two capitals engaged in different spheres of production does not correspond to the relationship between the living labors engaged by these capitals, – writes Rubin, – it does not follow that a part of surplus labor or surplus value "is transferred," "overflows," from one sphere of production to another!'60

How does Rubin justify his commentary, refuting 'the representation, based on the literal interpretation of some expressions of Marx'? Let us give the word to Rubin himself: 'However, if value is not a substance which flows from one man to another, but a social relation among people, fixed, "expressed," "represented" in things, then the conception of the overflow of value from one sphere of production to another does not result from Marx's theory of value but basically contradicts Marx's theory of value as a social phenomenon.'61

Here graphically, clearly the error in the definition of the object of studies affected, the detachment of social equalisation of labour in the sphere of circulation from direct production. Does the movement of value not reflect the movement of a determined mass of labour? Must not the moves of the material products of labour with the stamp of commodity values be accompanied by processes of redistribution of the mass of surplus value from one branch to another? Are not all these processes manifested in the social relations of capitalists with each other? Do the real processes of redistribution of the mass of social labour through commodity values ​​have anything in common with the absurd, caricatural representation of S. Frank of value, 'as some material substance, having the property of a liquid'? All this is very elementarily. The reader may rightly wonder why these real processes of redistribution of surplus value, such a major researcher-Marxist, as Rubin is, considers to be a contradiction to 'Marx's theory of value as a social phenomenon.' This is to what "successive insistence" on a mistakenly adopted commentary leads.

Only the "social school of distribution without value" takes up the study of social structures, abstracting from reality the through the movement of realised commodities occurring redistribution of the mass of surplus value.62 To it is cut off the path to understanding the process of establishing the unity of externally-independent from each other categories of distribution (rent, interest, commercial profit, business income, etc.), as parts, of the total mass of surplus value.

Rubin himself gave a scathing critique of the ideas of this school for turning back to Adam Smith's dogma on the formation of prices from the indepedent, earlier given sources of rent, wages, profit!

The erroneous commentary of the law production price is overturned by the same Essays in those chapters where Rubin unfolds with great force the exposition of the problem of socially-necessary labour. Here is brightly, clearly shown the role of market value, as the "basis," on which rests the very relation of demand and supply, which explains the market oscillations of profit, as processes of the moves of the mass of social labour.

What determines according to Rubin the quantity of the "actually payed social need"? It consists of nothing more than a 'product of the unit value determined by the technical conditions of production, the number of units currently located at the given value.'63 This mass of value reflects the amount of labour, realised under proportionality in social production. Obviously, under an increase in the market price above market value, the given industry realises more labour than it actually employed. Obviously, these masses of "foreign" labour must have been taken from other industries. Obviously, there must occur a shifting of the mass of labour, and consequently, also surplus value. Again, the chapters of Essays itself overturn the original erroneous commentary of the law of production price.

Abstracting from market value, as "intermediate link" of the process, we are not in a position to understand the internal pattern of direction in the moves of capitals, under which value conditions is stimulated the contraction of capital in one or another industry.

The solution to the problem of socially-necessary labour, which is given in Essays, reveals to us market value, as "intermediate link" of the process of the formation of the average rate of profit. The scheme of this process can be expressed in such basic links: processes of change of the technical composition of capital – the tendency of different organic compositions of equal-sized capitals toward a "socially-average" structure – a reflection of the change in the organic composition of capital per the largest market value – processes of the redistribution of the mass of produced surplus value through the movement flows of commodity values – as a result of these processes, rearrangement of capital from one industry of production into another – the price of production in the sphere of the market.

The market value in each industry plays the role here of a peculiar "transmission apparatus." Through the change in the market value, changes in the organic composition of capital affect the redistribution of mass of labour, and consequently, also the total mass of surplus value.64 The changes of the organic composition of capitals under an everywhere equal rate of exploitation, cause changes of the magnitude of the market value ​​in each industry.

For each industry the magnitude of "actually, socially payed needs" is changed. Is not all this reflected in the magnitudes ​​of the redistributed mass of labour, does not the magnitude of the price of production itself change as a derivative of the new level of the value rate of profit? A different corelation must be established between the organic composition of different industries, that affects the regrouping of capitals.

The price of production in circulation, reflecting the laws of the redistribution of the mass of labour, thereby reflects the processes bringing closer the organic composition of capitals toward the socially-average level. Price of production should coincide with market value in industries of socially-average organic composition of equal-sized capitals, inasmuch as the tendency in technical progress under free competition constantly operates for a convergence of the individual composition of capital with the socially-average level.

Here the sphere of the market and direct production do not match, but "mutually-penetrate" into each other, their unity acts as a "unity of differences." The author of Essays knows that Marx attached great significance to the problem of the links between the distribution of capital and the distribution of labour.65 Without a proper understanding of this problem one can not study the internal laws of the curve of capitalist development. Is not the direct, topical task of Marx's followers in the theory of value to be occupied with the study of this problem? The commentary of Essays cuts off for us the path to the study of this problem.

VII. The dialectics of the process of the formation of the average profit in the Essays of Rubin.

What mistakes contributed to the by Rubin defended position in his commentary of Marx's study of the law of production price?

For the author of Essays in the ninth chapter of the third volume of Capital is given 'a hypothetical, embryonic, capitalist economy.' In the tables Marx has a column with different value rates of profit in different industries. On this basis, evidently, Rubin also comes to the conclusion that 'here is assumed a state of monopoly, but not free competition.66

What caused such a conclusion? In the tables the average level of profit results as an average from the individual value rates. Under which conditions, according to Rubin, would that have been possible? Only on one condition: if the individual value rates are realised in the selling price of commodities of a given industry.67

But under which conditions can the value rates of profit be realised? Rubin understands: under free competition, anarchic fragmentation (разорванности) of demand and supply, they can not be realised in commodity prices. Evidently, – says the author of Essays, – here is supposed a condition of monopoly.68

But in the tables there is a column for the sale of commodities at production prices. That formulation of the question, which Essays gave, drives study in an insoluble contradiction. If individual value rates are realised, then in what way can commodities be sold at prices of production? Obviously, in the presence of these two columns, for Rubin, lies a logical inconsistency of the construction of the table in the scheme of the law of production price of Marx.

The relation of free competition between capitalists, for Rubin, is incompatible with different value rates of profit in different spheres of production. The presence of competition, obviously, mechanically should ordain a permanent equality of individual value rates of profit to its social average rate.

Thus seems to us the logical chain of reasoning of Rubin. Its final link is a consequence of a mistakenly developed "starting position": if the average level of profit is derived from value rates, then the latter must be realised in selling prices. Drop the initial link and the whole chain is smashed!

For Marx – directly in the sphere of the market the individual value rates of profit, are not realised, the market price can not be identified with the price of production. The average level of profit in the sphere of the market corresponds with individual value rates only as the result of a complex process. The law of production price consists of nothing else than in the display of the patterns of the dialectics of this process.69

The great scientific merit of the author of Essays – is the constant emphasis, that 'fundamental in the study of Marx is the steadfast attention to the social particularity of the structure.' In the analysis of the tables of the ninth chapter of the third volume of Capital Rubin forgets about this!70 The numerical patterns of the table of the third volume of Capital express determined economic patterns. The conditions of the numerical example of the tables of the ninth chapter reflect all the distinctness of "the forming principle" of the capitalist structure. The tables reflect the dialectics of the process of the formation of the average rate of profit, the process of converting value in a "newly determined form," in production price. The tables do not only not exclude, but presuppose the relation of free competition. The price of production displays the direction of the process of the moves of the mass of social labour, market value operates (as) "regulatory magnitude" of that amount of labour, that comes to the given sphere, an amount, which in capitalist society by no one is established.'71 These categories – are different moments of the internal-contradictory process of the redistribution of social labour. Rubin mechanically separates different columns of the tables, ignoring the "linking of their movement."

For Marx, according to Rubin, deducing the average level of profit from the value rate – is "only a way, a special device of presentation" from the contrary. The reader of Capital knows that the statement of Marx on this point is not at all supposable, (but) fully determined, allows not any other interpretation. And yes why would Marx resort to a form of presentation from the contrary? Essays did not show which "column" from the by Marx shown tables 'is overturned,' 'if you makes from it all logical deductions until the end.' After all, Marx did not assume the realisation in commodity prices of the value rates of profit. The last column represents only a "starting point" of the process in the phase of direct production. This column "does not overturn" the tendency of prices toward prices of production from all the logical conclusions to their end.'72

VIII. Historical lessons and Essays of Rubin.

What are the "automatic" consequences of the metaphysical formulation of the question, outlined above? An instructive example is the work of Ricardo. Under what conditions for the finisher of classicism is the basis of average profit – the sphere of production? If labour value, the value rate of profit – is realised in the prices of commodities of a given industry.

The great metaphysician represented capitalist economy in a situation of permanent harmony. Insofar as between all industries there is proportionality, the value rate of profit for each industry according to Ricardo coincides with the average general rate of profit.73 'Ricardo identifies production price with value from the very outset, – Marx writes, – and does not see that this assumption is a prima facie contradiction of the law of value. Instead of solution he starts to forcibly derive the law from the contradictory phenomena of reality.74

Scientific intuition tells Ricardo that the technical composition in different industries is different. But then also the value rate of profit in different industries is different.75 The metaphysical formulation of the question drives all study in a false, vicious, hopeless circle. Over which questions does the finisher of ​​classicism grievously rack his brain?

How to solve the great antinomy:

1) different individual value rates of profit constantly are realised in the selling prices;
2) in the selling prices is realised a constantly equal-for-all-capitals rate of profit?

By what ways can these individual value rates of profit coincide with the constantly realised in prices average profit? For metaphysics commodities are sold either at production prices, or at market values; commodities of equal-sized capitals are not exchanged at labour values, since the technical compositions of them differs, – in this form of an unresolved antinomy Ricardo left stand the labour theory of value.

The period from 1820 to 1830 was designated by Marx as the metaphysical period in the history of economic thought. With the teacher a new and important development on a soil, soaked by contradictions; with the students the formal-logical sequence leads to the disintegration of the Ricardian school.76 Only the great dialectic brought the theory of value from its metaphysical impasse, destroying the gap between the price of production and market value.

'Ricardo, – remarks Rubin, – could not put the problem in all its breadth because of the very method of his study, consisting in the direct comparison of the various categories and ignored the "intermediate links" between them.'77 A neat, correct characterisation of the mistake! Marx condemns Ricardo not for the attempt to derive the average rate of profit from individual value rates, but for the identification of these categories. He pounds on Ricardo because the great metaphysician does not understand that the unity of average profit in circulation is carried out by value rates, as a process, in which the latter operate only as necessary "intermediate links" of the process.

But, wait, the reader interrupts us: – by itself the metaphysical formulation of the question did not play such a role in the origin of the antinomy of Ricardo: the latter did not overcome the fetishistic representations; with this also is explaind the famous insoluble contradiction!

We are forced to make some methodological remarks. It is understood, 'the whole blunder of Ricardo's and the consequent erroneous exposition, results because Ricardo's, just as that of the other economists, treatment of definitions of form is crude and uncomprehending.'78 Ultimately, the finisher of classicism did not overcome the fetishistic representations; but in the author of Principles there was an attempt to understand the internal patters of the capitalist system.79

One can not agree with Rubin, that Marx was 'more inclined to overestimate, than to underestimate the great services of the classics.' Marx studied Ricardo dialectically; not being confined to general formal characterisation, Marx traced not only the conclusions, the results of the study of Ricardo, but also the intentions, "starting points," the separate steps of the great analyst. Only the study of the process of the works of Ricardo can pick out the initial causes of the errors of his theory.

Contradictory forms of the manifestation and internal nature of the law arises in Ricardo at that stage of study, when the author of Principles gave up the fetishistic understanding of economic processes. At that stage of the study one also needs to analyse his mistakes. The contemporaries of Principles saw in the work of Ricardo that, which our gifted commentator refuses to acknowledge to him – an attempt to overcome the fetishistic understanding of bourgeois economy.80

IX. Conclusions.

Why did the metaphysical formulation of the question, in a certain sense near to Ricardo, not have in the study of Rubin such sad consequences? The reader knows that the critic of the methodology of the classical school, is completely alien to the metaphysical understanding of bourgeois economy, which leads to insoluble contradictions of the Ricardians. The stated errors have in Essays quite different roots, which we have tried to show in the first headings of the article.

We have engaged the Principles of Ricardo, in order to show, to what effects leads such formulation of the question, which is present in the Essays. This error is not deployed in the Essays to its logical limits.

Breaking the logical harmony of analysis, Rubin nevertheless does not leave the Marxist position. But the desire at all costs to save the erroneous initial commentary leads inevitably to a series of contradictions.

What is the logical consequential conclusion of the original position: the value rates of profit do "not serve as intermediate links" of the process of the formation of the average level? Study need not be interested about the organic composition of equal-sized capitals.

However Rubin, following Marx,81 gives decisively important significance in analysis to differentiation in the composition of capitals c and v, which reveals the secrets of the origin of surplus value. In this way, 'the distribution of capital, through the organic composition of capital,. – correctly notes Rubin, –​ bridges to the distribution of social labor.'82 In this way, 'by a visible process of emigration of capital is revealed the invisible process of the redistribution of the mass of social labour.'83

But Rubin, obviously, is aware of his logical inconsistency. How can one "enter" in analysis of the organic composition of capitals and ignore therewith the by them caused value rates of profit? 'It is obvious – Rubin notes, – that different rates of profit in individual spheres are used by Marx only as numerical expressions, indicators of the organic composition of capital.'84

The artificiality of the argument strikes the eye! Why can it not be also the reverse situation? Indeed only because then it is necessary to reject the initially presupposed commentary of the problem! Why under an everywhere equal rate of exploitation and other conditions being equal, can not the different organic compositions of capitals, on the contrary, serve as indicators of the rate of profit, produced in the given industry?

'The average rate of profit, – Rubin notes in one place, – is the result of the "redistributed between capitalists erstwhile total mass of surplus value.' But then, obviously, individual value rates of profit – are a "link" of the process.

The reader has the right to demand from a researcher-Marxist, as the author of Essays is, a logical harmony in the presentation of the "qualitative" and "quantitative" aspects of the law of value, in the presentation of abstract labour, the price of production and the chapter, devoted to socially-necessary labour.

Original title: Закон трудовой стоимости при капитализме в „Очерках" И. Рубин. – Дунаевский, Вл.

  • 1. Printed in the order of the discussion. Ed.
  • 2. This article represents a slightly amended speech, delivered in the economic section of Leninisk. scientific-research Institute of Marxism in February 1928.
  • 3. Theories of Surplus Value MECW 32, p. 263.
  • 4. Capital vol.3 1981, p. 277.
  • 5. 'The logical method of approach, – Engels writes, – is indeed nothing but the historical method, only stripped of the historical form and diverting chance occurrences.' (Engels: Marx's Critique of Political Economy).
  • 6. Rubin, Essays, (3rd edition 1928) 1973, p. 255 of English translation (page references to English translation). (Only a couple of times I give Dunaevsky's page numbers to the Russian 3rd edition, when I was too lazy to find the quotes in English. The page references of the Russian 3rd edition are between 10 to 20 pages in advance of those of the English translation. The 1929 Russian 4th edition is online, but its paging differs from the 3rd, despite no changes being made, except for the addition of a reply to Bessonov in the appendix. – Noa Rodman)
  • 7. Ibid.
  • 8. Theories of Surplus Value MECW 32, pp. 264–65.
  • 9. Rubin, Essays, p. 257. We emphasise the methodology of Karl Bücher: the historical views of Rubin have nothing in common with the ideas of K. Bücher.
  • 10. Capital, Vol. 1 1976, p. 492. Following Rodbertus, K. Bücher defines the first stage of history of social forms 'as production for own consumption in its pure form.' The whole cycle from production to consumption here, for Bücher, takes place in the closed circle of relatives, kin. Such was for Bücher the economy of the Greeks, the Carthaginians, the Romans; the same traits reveal also the economy of Romance, Germanic peoples in the early Middle Ages. 'Trade is a completely alien element to the closed household economy (K. Bücher, Die Entstehung der Volkswirtschaft, pp.92–116).

    Bücher's ideas have undergone a large fierce criticism. We mention the works of Eduard Meyer (Die wirtschaftliche Entwicklung des Altertums), Salvioli. For the latter, 'already the primitive associations of families, from which followed the Roman state, while maintaining complete independence within the city walls, connected with each other through exchange relations.' 'Starting with the Babylonian monuments, – Salvioli writes, – through to Hammurabi's Law, up to the monuments of the East and the whole Hellenic era we find the most obvious proof of the preponderance of family economy that produces and works over everything that does not require special skills or instruments, and of the existence of a class of artisans gathered in cities, that labour on order or for the market' (Salvioli, Capitalism in the Ancient World, pp. 21, 270, 310). (Page refs to French version:

  • 11. Lenin, Karl Marx
  • 12. Engels, Law of Value and Rate of Profit. (Novoe Slovo, 1897. "способ общения" seems to be a phrase from this early Russian translation)
  • 13. It is understood, that inside a human group of forty to fifty people, or kinship community, of course there was no exchange. But according to the comprehensive investigations of Morgan and Maurer 'the development of products into commodities arises through exchange between different communities, and not between the members of one and the same community.' (Capital vol. 3 1981 p.278).
  • 14. Vestnik Kom. Akademii nr. 11, 1925, p. 287. 'The main abstraction for the study of capitalist economy, – writes Bogdanov, – comes out through the comparison of the historical given complexes. So they were obtained in Capital. The disappearance of fetishism and its disclosure was reached through transition to other forms of production' (VKA, p. 304).
  • 15. Historical excursion allows us to trace the social content of separate, simple economic categories. But we must not forget that 'they are contained in other social formations in impaled, always substantially-changed form' (Marx).

    In the capitalist system, all these "simple" categories take new, concrete determination. Therefore, simple categories do not give an understanding of the present system in its "cohesion" (Letter of Marx to Annenkov).

    The "formative principle" of the capitalist system creates a qualitatively different combination, "cohesion" of all these simple categories. Medieval corvée does not open to us the secrets of capitalist exploitation, annuity products do not give anything for the understanding of the sources of absolute and differential rent, usury is not able to disclose to us the relations of finance capital.

    In Critique and Capital Marx gave an exhaustive critique of the pseudo-historical school in political economy, for which 'this historical material serves to procure through inductive paths new truths' (G. Schmoller, Die Volkswirtschaft, die Volkswirtschaftslehre und ihre Methode, p. ... Emphasis added).

  • 16. For W. Sombart 'value does not indicate even the approximate borders, in the limits of which market price fluctuates' (Zur Kritik des ökonomischen Systems von Karl Marx).
  • 17. Engels, Law of Value and Rate of Profit. 'At the moment when labour value can claim acceptance only as a speculative formula or scientific hypothesis, – E. Bernstein nicely captures the "zest" of the idea of Sombart , – surplus value would all the more become a pure formula, a formula which rests on an hypothesis' (Bernstein,
  • 18. Parvus, Der Weltmarkt und die Agrarkrisis (The World Market and the Agricultural Crisis).
  • 19. We have in mind not the city, connected with exports, but the so-called type of "regional" city, united with peasant districts in a relatively self-sufficient unit, with a relatively small volume of external-trade relations, which are served by the merchant.

    By itself the volume of these connections still can not be considered a final clarification. The well-known expert on the Middle Ages Below convincingly criticises the scheme of Schönberg–Bücher about the limited inter-city trade of five objects of trade.

    But also Below, and D. Petrushevsky for who 'capitalism is a perennial category,' agrees with Sombart and Bücher about the 'self-sufficiency and isolation of the medieval city of the regional type' (D. Petrushevsky, Очерки из экономической истории средневековой Европы, 1928 (Essays from the economic history of medieval Europe). (A critique of this work is in PZM nr. 2 1928: "Two steps back" by Fridljand)

    'The capitalist era for Marx dates from the sixteenth century. Wherever it appears, the abolition of serfdom has long since been completed, and the most brilliant achievement of the Middle Ages, the existence of independent city-states, has already been on the wane for a considerable length of time.' (Capital vol.I 1976, p. 876).

  • 20. 'The concept of budget is the scientific foundation for the system of Aquinas (W. Sombart, Modern Capitalism, pp. 19, 113, 118, vol. 1, refs to Russian ed. 1924).

    Justum pretium – 'this is that price which corresponds to the expenses of the seller with the addition befitting his income situation' (Kulisher, Лекции по истории экономического быта (History of economic life), p. 232). Finally, for the well-known researcher Below 'this theory is connected to the general ideas and principles, dominant in the cities (Below, Das Ältere deutsche Städtewesen und Bürgertum).

  • 21. In the medieval regional town and its rural surroundings (there is) a very great specific mass of natural relations, which slightly deviates the exchange proportion from strict compliance with labour value. Universal relation of exchange under capitalism gives direction also to the theoretical study of the system of the regional town. The law of value here is studied, starting from the assumption about the universality of the commodity form of social connections, distracting from modifications, made to the manifestation of the law by the natural modes of life.
  • 22. According to Parvus the farmer was unable to calculate the labour value of the products of their household. Parvus does not consider the fact that the exchange proportions for agricultural commodities are affected by the power of tradition. The quantitative relations had to ensure to the peasant household the maintained size of his production (crop, maintenance of livestock) and personal consumption in the historically prevailing conditions. These traditions though are formed under the influence of the regulatory impact of labour expenditure for a large historical period.
  • 23. Essays, (p. 169 in Russian 3rd edition). Emphasis added. ("общественное равенство трудовых затрат различных видов отнюдь не представляет равен­ства фактически проработанных часов" This sentence should be a couple of pages before p. 154 of the English translation, but I don't find it.)
  • 24. Ibid, p. 154.
  • 25. Of course, from nowhere does it follow, that the equality of factual labour should mean the equality of the sum of expended psycho-physiological energy. Any physiologist confirms: equal-in-duration heterogeneous labour of differently qualified "socially-average" labour forces corresponds to differently expended psycho-physiological energy.

    Identification of equality of heterogeneous labour in the sphere of direct production and exchange does not mean equality of expended psycho-physiological energy under comparison of the labour of different industries.

    Physiological expenditure, as such, is not a principle of comparing commodity values. It acts here only in connection with a determined level of labour productivity, which expresses the relation of a determined amount of products to a determined duration of work.

  • 26. The author of Essays does not explain such a strange contradiction in the exposition of "qualitative" and "quantitative" aspects of value! Does the social form of manifestation not express the social particularity of the quantitative processes of equalising labour? Why in the "qualitative" characteristic of value are given completely different quantitative patterns (/laws) of one and the same process? After all for Rubin himself 'the transformation of individual labour into social labour necessarily transforms private and concrete labour into social and abstract labour' (Essays, p. 175).
  • 27. Essays, p. 126.
  • 28. 'There is in actual fact, – emphasises Marx, – a very significant difference between "measure" in the sense of money (in the sense of practical measurement. V.D.) and cause of value.' But, at the same time, for Marx the ground of study of exchange value is only possible because in value is found reflected its immanent measure – the labour-time of production.

    'Bailey thinks, – writes Marx, – that there is some sort of difference between labour as cause and labour as measure, and in general between cause and measure of value.' – The cause of value, – Marx explains to Bailey, who rejected absolute value, the equivalent form of value, – this is the substance of value and hence also its immanent measure' (Theories of Surplus Value MECW 32, p. 348.)

  • 29. Essays brilliantly developed one of the central ideas of Marx: 'The existence of value has a purely-social character' and 'does not contain a single atom of a natural substance.' Of course, the labour of individual expenditure is reflected in the substance of value not naturalistically, but in a "removed (снятом)" dialectical form: not as a "brains, nerves, muscles," but in a certain social refraction, in a determined amount of factual hours of uniform, impersonal labour, expended on the production of the given commodity. The immediateness of this expenditure is manifested in the "social relation" of exchange value.

    How does Essays resolve this question? 'Physiological labour is the presupposition of abstract labour in the sense, – Rubin writes, – that one cannot speak of abstract labour if there is no expenditure of physiological energy on the part of people' (Essays, p. 136.). Essays garnishes a truism, instead of a clear and definite answer to the problem posed: whether labour expenditure, in the sense of which we spoke above, constitutes the content of the very substance of value.

  • 30. Essays, pp. 1–2.
  • 31. 'It is truly absurd to make machinery an economic category alongside the division of labour, competition, credit, etc.,' – Marx wrote to Engels. – Machinery is no more an economic category than the ox who draws the plough.

    But did Marx not thereby convey, that the unification of the productive forces in a system – is a social process? 'The present use of machinery is one of the relations of our present economic system, but the way in which machinery is exploited is quite distinct from the machinery itself,' Marx emphasised. (This letter was actually to Annenkov, 1846 12 28).

  • 32. Rubin, Essays, p. 102.
  • 33. Rubin sharply dissociates from the to him ascribed by critics, not sharing his position: that in the sphere of the market private, concrete labour would be socially-determined, whereas in the sphere of direct production – there is full domination of free individualism, autonomy and independent labour of the independent commodity producers.

    But then in what sense in Essays in the directly producing labour of commodity producers does the directly private, but only afterwards, indirectly, "potentially," ideal-social labour act? And for Rubin, consequently, already here the labour of commodity producers is socially caused/driven. In the sphere of circulation only is reflected the internal contradictory spontaneous process of adjustment of formally-independent producers to the system of social division of labour.

    The social need of the size of labour expenditure of commodity producers is manifested as a process of endless fluctuations.

  • 34. 'Our task is complete if we can only establish the laws of this dependence,' – writes Rubin. What dependence has the author here in mind? 'Changes in labour-value which are caused by changes in the productivity of labour bring about changes in costs of production and thus in production prices. This is precisely what had to be proved' (Essays, p. 236–37. Emphasis added).
  • 35. Fluctuations of demand deflect price from labour value. Under what condition do the deviations of demand have the tendency to mutually cancel out? When there is a real trend in prices to gravititate towards labour value. Under an equilibrium of demand and supply the "equilibrium price" (market value, price of production) is determined independently of the relation of demand and supply – by the conditions of production.

    The quantitative determination of the relation of demand and supply is fixed only under a determined level of price, and under their equilibrium – by a determined level of the "equilibrium price." But the absolute level of the "equilibrium price" is revealed only in the sphere of direct production.

    In this way is revealed the "basis" of the relation between demand and supply. Their equilibrium means nothing else than the proportional division of the mass of social labour, quantitatively determined, as well as derivative from the magnitude of the labour expenditure per unit of product in the prevailing conditions of technology for a given industry.

    In the tenth chapter of the first part of the third volume of Capital is contained the classical criticism of the "basic pillars" of the mathematical school with its understanding of demand, as an independent, external source of the "equilibrium price."

  • 36. Essays, p. 242 (Russian 3rd edition).
  • 37. The condition of the realisation of the law of value does not at all consist in the equality of price and labour value. 'The possibility of a quantitative incongruity between price and magnitude of value is inherent in the price-form itself' (Capital vol. 1 1976, p. 196). The condition of realisation of the law can not be expressed either in the equality of price of production with market value. In what is expressed under capitalism this gravitation of price toward value? In the tendency – toward a special way of the redistribution of value – the price of production, in tendency matching with the market value in sectors of socially-average organic composition of capital.
  • 38. The denial of the historical foundation leads Essays to a logically contradictory formulation of the problem. How can one reject in the study of capitalism the basic condition of the realisation of the law of value, if here it merely is complexified?
  • 39. Capital vol.3 1981, p. 268.
  • 40. Essays, p. 251 (Russian 3rd edition).
  • 41. Ibid., p. 253.
  • 42. In order to avoid such long wording, we call the rates of profit, as they are given by different organic compositions of capital at equal-sized units, simply the "value" rates of profit .
  • 43. Essays, p. 246–47.
  • 44. Bulgakov, On some fundamental concepts of political economy (О некоторых основных понятиях политической экономии), "Научное Обозрение" 1898, Vol. 10, p. 1.647).

    'The proposed by Marx process of alignment of originally different rates of profit due to the different composition of capital was invented by Marx ad hoc and does not in the slightest way correspond to reality' (Tugan-Baranovsky, Theoretical Foundations of Marxism (Теоретические основы марксизма), 1917 ed., p. 163).

    'Here it may seem, – writes Sombart about the tables of the third volume, – as if by such ways factually, due to the different proportions of C and V in capitals, according to the rule, initially there arises unequal profit, and then afterwards they are aligned to the average profit, due to the rise and fall of prices.' (Nauchnoe Slovo 1898, nr.4, p. 699).

  • 45. Capital vol. 3 1981, p. 257. Emphasis added.
  • 46. M. Smit, Economic bases of calculation (Экономические основы калькуляции), 1926, p. 141 'But average magnitude, – Marx emphasised, – exists always just as the average of different parties of one and the same kind' (Capital vol. I, p. ..).
  • 47. Capital vol. 3 1981, p. 263.
  • 48. Capital vol.3 1981, p. 274. Rubin illustrates his position by the following example: 'If the entire social capital is 1000, and the mass of total surplus value is 100, then the general average profit rate will be 10%. Inversely, if the total mass of surplus value increases to 150, and the total capital remains the same (1000), then the general average profit rate rises from 10 to 15%, even though the profit rates would remain unchanged in the individual branches of production' (Emphasis added).

    The example reveals the whole hollowness of the by Rubin conducted opposition. The mass of total surplus value can not increase without an increase of the mass of surplus value in one or other industries, that is, without corresponding changes in the latter's value rates of profit!

    The increase M/V for the entire social capital is unthinkable, without increase of the rate M/V in separate spheres.

    An increase of the level of labour productivity, changes of the organic composition over the whole social capital, is impossible without a corresponding change of it in separate spheres.

    I.e., the change of all the conditions, which determine the total mass of surplus value, is unthinkable without the change of individual value rates of profit.

  • 49. See Essays, p. 247.
  • 50. Ibid, p. 247. In his time Struve also claimed, that 'it is as if the contradiction Marx in the third volume of Capital solved thereby, that the law of value of individual exchange-acts and individual commodities is transferred to the whole social product' (Zhizn, 1899 , Feb., p. 297).
  • 51. The relationship between the "universal" and "individual" was classically formulated by Lenin. 'Every individual is a form of the manifestation of the universal. Consequently, the opposites (the individual is opposed to the universal) are identical: the individual exists only in the connection that leads to the universal. The universal exists only in the individual and through the individual. (Lenin, Dialectics
  • 52. 'Movement, considered, as the movement of a single individual capital, may present other phenomena, – writes Marx, – than the same movement does when considered from the point of view of a part of the aggregate movement of social capital' (Capital vol. 2, ch.3).

    But the latter type of movement expresses conflicting social-objective patterns of the first type.

  • 53. Capital vol. 3 preface. 'In Marx, – Finn-Enotaevky notes, – the position, that the sum of prices is equal to the sum of values, ​​is a natural conclusion of his understanding of value and price and does not at all serve as special "proof" of the correctness of the labour theory of value, as Tugan, Ach. Loria assume. The sum of price – is the money form of the sum of value; if it is more than the sum of values ​​before their entry into circulation – then the conclusion is inevitable: new value is created in exchange, in circulation' ("Научное обозрение", 1903, nr. 5, The labour theory of value and its latest Russian critics (Трудовая теория ценности и ее новейшие русские критики)).
  • 54. The metaphysical separation of the "universal" and "individual" in A. Ammon is philosophically justified by the Kantian 'principled opposition of the object of knowledge and object of observation.' 'Science constructs, for Ammon, not the real connections of the thing, but conceptual connections of the problem" (Objekt und Grundbegriffe der theoretischen Nationalökonomie).
  • 55. It should be noted that for Rubin price of production is not an intra-class category. He notes correctly that 'the theory of production price assumes the existence of all three basic types of production relations among people in the capitalist society (relations among commodity producers, relations among capitalists and workers, relations among individual groups of industrial capitalists) (Essays, p. 224.).
  • 56. (Marx 1981, p. 300.) The patterns of the process binding capitalists with one another reflects the social particularity of the inter-relation between the industries of social production. Without the study of this process one can not study the curve of capitalist development (see our article: Questions of the theory of reproduction (Вопросы теории воспроизводства), – Sotsialisticheskoe chozjajstvo 1928, nr. 3.).
  • 57. Here the price of production is not studied in all its diversity, as it is found on the surface of competition. At this stage of the study is assumed: full conditions of free competition, abstraction from "third persons," from fluctuations of commodity prices, lying on the side of money; here is not studied the law of distribution, associated with the decomposition of profit into interest, profit of entreprise, etc.

    The relation of demand and supply here is taken as the determined production relation between the first and second departments of capitalist production in specific capitalist form. 'For the understanding of those demands and supplies, that together create production, as such – Marx notes, – it is necessary to explain to oneself the entire system of capitalist process of production as a whole" (Capital vol. 3 1981, p. ..). The schemes of the second volume of Capital provide an excellent illustration of the particularity of this relation.

  • 58. Processes of movement of capitals can not get rid of a certain dependence on material-technical logistics, as Bukharin likes to put it, the distribution of productive forces. 'The movement of capital, – Marx notes, – is not only a replacement of values, but a replacement of materials, and is therefore conditioned not just by the mutual relations of the value components of the social product but equally by their use-values, their material shape' (Capital vol. 2 1978, p. 470).

    If in the given industry the scale of production is not proportional to the socially-necessary level – in the sphere of circulation inevitably "overproduction of commodities" shows up. The inevitable fall of the rate of conjunctural profit causes an outflow of capital from these industries. Fluctuations of demand and supply, a determined conjuncture rate of profit, in this way, have the tendency to mutually cancel, neutralise.

  • 59. Bourgeois criticism ascribes to Marx its own vulgar, caricatural image of the process: surplus value is distributed by itself, similar to a liquid, independently of the movement of commodity values.

    Rubin (p. 239) quotes Badge, who denies the possibility of redistribution of the mass of surplus value, 'since the latter originally does not represent a money price, but only crystalised labour time.'

    Bourgeois criticism does not want to understand an elementary fact: in this stage of analysis is traced the hidden, internal processes of competition: the movement of commodity values ​​here directly reflects the redistribution of social labour.

  • 60. Essays on p. 239.
  • 61. Ibid. Only this process reveals the mystery of the sources of the "trinity formula of distribution." The movement of commodity value streams from agriculture to the industrial city is accompanied by a redistribution of part of surplus value in favour of the monopoly of the land ownership. Selling agriculatural commodities at market value, determined by the value of worst areas, agriculture realises labour more, than factually is engaged in it.

    This surplus (so-called social-false value) is taken from the mass of surplus-value of industry and forms a common source of agricultural differential rents.

    With the transfer of commodity values ​​from the factory to the consumer, performed by merchant capital, part of the surplus value is appropriated by the latter. And so on.

    For the "social school of distribution without values" the relation of distribution is determined only by "the social powers of the class."

    Therefore, they are not subject to patterned process of redistribution of the mass of surplus value and are not and causally-driven. This opens wide a field for all sorts of theories about the price formation process 'imputing each class its share in the social product' by ethical norm, established by Tugan-Baranovsky and Stoltzmann.

  • 62. Essays, p. 159 (Russian 3rd edition).
  • 63. Essays, p. 216 (Russian 3rd edition). One must always bear in mind that the market value is determined by the "hidden" relation of the mass of labour in the sphere of direct production. Insofar as price of production is at odds with market value, the equilibrium of capitals is established under different proportions in the distribution of social labour. "The closing link" of the process does not coincide with its "starting moment."

    But here rules the dialectical unity of negative and positive!

    Only the constant rearrangement of capitals from one industry to another causes the alternating fluctuations of market price around a determined centre – the average for the given industry selling-, production prices, approaching toward market value, as toward its "regulatory limit." The latter serves as a regulating magnitude of costs of production, insofar as they are determined by the in the given industry prevailing productivity level. Another part of the price – the average percentage of profits – represents the "final magnitude" of the process of adjustment of the value rate of profit, as part of the market value.

    In a special essay we will trace in detail the interaction between market value and price of production, as a by "magnitude regulated" process of the distribution of social labour. (I don't find the reference to this essay by Dunaevsky)

  • 64. Patterns of interaction between the production cost and market value we will try to give in a following essay. A most general scheme of the pattern of the formation of the average rate of profit, we have outlined in the article Questions of the theory of reproduction, – Sotsialisticheskoe chozjajstvo 1928, nr. 3.).
  • 65. Essays, p. 254 (Russian 3rd edition). Standing still at the question, 'whether the labour is proportionately distributed among the different spheres in keeping with these social needs, which are quantitatively circumscribed,' Marx to these words makes a note in brackets: 'this point should be introduced in connection with the distribution of capital between the various spheres of production' (Capital vol. 3 1981, p. 774).
  • 66. 'The tables in Chapter 9 of the third volume of Capital, which illustrate the formation of general average rates of profit from different rates of profit, depict a theoretical schema of phenomena, and not the historical development of the phenomena' (Rubin, Essays, p. 255). Supporters of historical foundation of abstract analysis also do not argue the opposite: here the patterns of the capitalist system are given, but not the process of transition of simple commodity production into capitalist production.
  • 67. 'Deriving the average rate of profit from different profit rates provokes objections based on the fact that the existence of different profit rates in different spheres is not logically or historically proved' (Essays, p. 246.)
  • 68. Let us assume, the tables reflect a situation of monopoly. But also in that case, the individual rate of profit can not be realised. Monopoly inside a particular industry does not eliminate competition between different industries. The pressure of competition also in this case will affect the deviation of monopoly price from the it determining value.
  • 69. 'In the exact sciences it is not customary to regard a predictable disturbance as a refutation of a law,' – wrote Engels (Capital vol.3 1981, p. 104. Engels is quoting Fireman).
  • 70. If the absence in the hypothetical capitalist economy, – Rubin wrote, – of competition among the capitalists of the different spheres, explains why commodities are not sold according to production prices, this absence of competition also makes it impossible to explain the sale of goods according to their labor values. But if there is no competition among capitals, if each capital is fixed in each sphere, then the state of monopoly results' (Rubin, Essays, p. 244.)
  • 71. cf. Essays p. 218. (Russian 3rd edition).
  • 72. Ibid. p. 248.
  • 73. Ricardo considers 'random, transient deviations of actual or market prices from their original (natural) values' (Principles of Political economy, pp. 47-92, 97 Russian transl.).
  • 74. Theories of Surplus Value, MECW 32, p. 261. (Вместо решения он начинает насиль­ственно выводить закон из противоречивых явлений действительности This last sentence seems to be Dunaevsky's paraphrase.)
  • 75. 'It is no accident that Ricardo identifies circulating capital with capital laid out in labour.' 'Ricardo has too much logical instinct, – Marx says, – in order not to see behind fixed and circulating capital the relation between living and dead labour. For this reason the part of the capital-value laid out in material of labour does not appear on either side in Ricardo. It disappears entirely' (Capital vol. 2, ch. 11). (Dunaevsky apparently is paraphrasing)

    But, of course, 'Ricardo has not accurately distinguished the two aspects of labour, and still less, therefore, analysed the part played by each of these aspects in the formation of value' (Capital vol. 1 1976, p. 313).

  • 76. Theories of Surplus Value.

    'Just having recognised the contradiction, Ricardo aims to reduce it to 6–7%.' 'It is expressed in him timidly, in the form of a single number' (Marx). (no exact reference)

  • 77. Rubin, Preface to Rozenberg's Theory of value in Ricardo and in Marx (Теория стоимости у Рикардо и у Маркса), 1924.
  • 78. Theories of Surplus Value MECW 31, p. 439. 'What Ricardo does not investigate is the specific form in which labour manifests itself as the common element of commodities' (Theories MECW 32, p. 325).
  • 79. 'The basis, the starting-point for the physiology of the bourgeois system—for the understanding of its internal organic coherence and life process— is the determination of value by labour time. Ricardo starts with this' (Theories MECW 31, p. 391).
  • 80. Otherwise becomes inexplicable that rabid attack, which vulgar economy exposed the Principles of Ricardo to. Why does Bailey devote a special work to the sharp polemic with Ricardo? For Bailey 'value is a property of things.' Why does Malthus so sharply pounce on the author of Principles, (who) distinguished price from value? Why did the "dirty besmicher (/inept writer, грязный пачкун)" McCulloch attack the theory of Ricardo? After all for Mac 'profit is born in the process of circulation.'

    The strong and precise strikes of Ricardo against Say forces Marx to give him the following characterisation: 'All these economists understand more or less clearly, but Ricardo more clearly than the others, that the exchange value of things is a mere expression, a specific social form, of the productive activity of men, something toto genere different from things and their use' (Theories MECW 32, p. 365).

  • 81. 'There you have the critique of Ricardo’s theory, – Marx wrote to Engels, – roughly, for the thing’s fairly complicated. This much you will admit, that by taking into account the organic composition of capital, one disposes of a mass of what have so far seemed to be contradictions and problems' (Marx's letter to Engels, 2 August 1862).
  • 82. Essays, p. 235.
  • 83. Ibid. p. 241. (Russian 3rd edition).
  • 84. Essays, p. 247. Emphasis added.


Noa Rodman
Mar 25 2016 23:40

Italics in the footnotes are messing the text up. I have now deleted them (mostly I just had some book-titles in italics). btw, this translation could still use a proofread.

Noa Rodman
Mar 30 2016 19:36

Thanks for the update. Here's an overview of the headings:

I. The problem of the historical foundation (/justification) of simple commodity production and Rubin's Essays.
II. The initial error in the study.
III. Formulation of the problem in Essays.
IV. The average rate of profit – average weighting of individual value rates.
V. Mechanical opposition of sphere of circulation – sphere of direct production.
VI. The price of production in the sphere of circulation and of direct production.
VII. The dialectics of the process of the formation of the average profit in the Essays of Rubin.
VIII. Historical lessons and Essays of Rubin.
IX. Conclusions.

Nov 17 2017 03:56

This looks really interesting. Thanks for sharing.

Noa Rodman
Nov 17 2017 07:44

In order to facilitate easier understanding of this difficult text (maybe due to the amateur quality of my translation) I selected what I thought were key passages: here.