Deepankar Basu - The Logic of Capital Contents Acknowledgements 1 Introduction 1.1 Motivation 1.2 Organization of the Book 1.2.1 Part I of the Book 1.2.2 Part II of the Book 1.3 What Is Different in This Book 1.4 How to Use This Book Part I Foundations 2 Some Methodological Issues 2.1 Marx’s Route to Political Economy 2.1.1 First Phase of Studies 2.1.2 Dialectical Method The Dialectic in Hegel The Dialectic in Marx 2.1.3 Materialist Conception of History Defning Terms Claims about Structure Claims about Large-Scale Social Change What about Class Struggle? Summing Up 2.1.4 Interruption of Studies 2.1.5 Second Phase of Studies Further Readings 2.2 The Structure of /Capital/ Further Readings 3 The Generation and Accumulation of Surplus Value 3.1 The Commodity 3.1.1 Use Value, Exchange Value and Value 3.1.2 Qualitative Aspects of Value Abstract Labour 3.1.3 Quantitative Aspects of Value Complex Labour Socially Necessary Labour Social Labour Productivity of Labour Intensity of Labour 3.1.4 Labour Teory of Value: Summary and Implementation 3.1.5 A Simple Model of Production Complex Labour Productivity of Labour Intensity of Labour 3.1.6 Comparing Value over Time and across Countries Further Readings 3.2 Money-Form of Value 3.2.1 Money as Universal Equivalent 3.2.2 Functions of Money Measure of Values Medium of Circulation Means of Payment 3.2.3 Forms of Money Commodity Money Inconvertible Paper Money Credit Money 3.2.4 Monetary Expression of Value Definition and Measurement An Example 3.2.5 Price–Value Deviation 3.2.6 Comparing Monetary Magnitudes over Time and across Countries 3.2.7 A Marxian Exchange Rate for International Exchange 3.2.8 Commodity Fetishism 3.2.9 Long-period Method of Analysis Distribution of Labour and Exchange Value An Example Further Readings 3.3 Capital, or Self-Valorizing Value 3.3.1 Two Forms of Circulation 3.3.2 Surplus Value The Circuit of Capital Labour Process Valorization Process 3.3.3 Labour-Power as a Commodity How Is Labour-Power Reproduced? Which Labour to Count in Valuation? Two Definitions of the Value of Labour-Power Surplus Value and Exploitation 3.3.4 Some Terminology and Three Ratios 3.3.5 Estimates for India’s Organized Manufacturing Sector Further Readings 3.4 Production under Capitalism 3.4.1 Absolute and Relative Surplus Value Length of Working Day Productivity of Labour Intensity of Labour Examples 3.4.2 Evolution of Production 3.4.3 Formal and Real Subsumption Further Readings 3.5 Accumulation of Capital Further Readings 3.5.1 Reserve Army of Labour The Theoretical Question Ricardo’s Answer Marx’s Answer Fluctuations in the Reserve Army of Labour Components of the Reserve Army of Labour 3.5.2 Reserve Army of Labour in the US Economy Data Alternative Measures Trends and Patterns Further Readings 3.6 The Primary Accumulation of Capital Further Readings 3.7 Conclusion 3.A Appendix A: Reduction of Complex to Simple Labour 3.A.1 The Intuition 3.A.2 Simple Model 3.A.3 General Model Commodity Production Skill Production Solving for Values and Reduction Coefcients 3.A.4 Implications about Income and Wage 3.B Appendix B: Comparison of MEV over Time and Space 3.C Appendix C: Labour as the Substance of Value 3.C.1 The Negative Argument 3.C.2 Neoclassical Critique and Response 3.C.3 Sraffian Critique and Response 3.C.4 Analytical Marxist Critique and Response 3.C.5 The Positive Argument Class Power and Labour Capitalist-Class Power and Value 4 Realization of Surplus Value 4.1 Circulation of Capital 4.1.1 The Circuit of Industrial Capital 4.1.2 Production versus Circulation 4.1.3 Circular Movement of Forms of Value 4.1.4 Flows and Stocks of Value 4.1.5 The Turnover of Capital 4.1.6 Fixed and Circulating Capital 4.1.7 The Process of Economic Growth in Capitalism 4.1.8 Formalization of the Circuit of Capital Model Further Readings 4.2 The Problem of Aggregate Demand Readings 4.3 Use-Value Basis of the Reproduction of Capital 4.3.1 Simple Reproduction 4.3.2 Expanded Reproduction Intuition and Marx’s First Example An Algebraic Treatment Completing Marx’s First Example Allowing for Capital Mobility Readings 4.4 Conclusion 5 Distribution of Surplus Value 5.1 Emergence of Prices of Production 5.1.1 Two Implications Example Further Readings 5.2 Detour: Technical Change 5.2.1 Technical Change, Use-values and Value 5.2.2 Process of Technical Change 5.2.3 Technical Change and the Average Rate of profit 5.2.4 Marx or Okishio? Readings 5.3 Commercial profit Example Readings 5.4 Productive and Unproductive Labour 5.4.1 Basic Activities of Social Reproduction 5.4.2 Unproductive Labour in Capitalism 5.4.3 Are Unproductive Workers Exploited? 5.4.4 Are Services Unproductive? Readings 5.5 Interest and Fictitious Capital 5.5.1 Interest-Bearing Capital and Interest 5.5.2 Interest Rate 5.5.3 Fictitious Capital Public Debt Shares of Capitalist Enterprises Land A Common Misunderstanding Readings 5.6 Ground-Rent 5.6.1 The Logic of Ground-Rent 5.6.2 A Model of Agricultural Production The Set-Up Technology of Production Ordering Plots by Quality 5.6.3 Ground-Rent with Exogenous Capital Outlays Total Ground-Rent Components of Ground-Rent Worst Plot of Land 5.6.4 Ground-Rent with Endogenous Capital Outlays 5.6.5 Price of Corn Further Readings 5.7 Estimates of Surplus Value and Its Components 5.8 Conclusion Part II Further Explorations in Political Economy 6 Capitalism and Technical Change 6.1 Technical Change 6.1.1 Basic Set-Up 6.1.2 Productiveness 6.1.3 Progressiveness 6.1.4 Capitalist Viability 6.1.5 Types of Technical Change 6.2 Progressive Technical Change and Capitalism 6.3 Technical Change and the Rate of profit 6.4 A Marx-Okishio Treshold 6.4.1 Marx-Okishio Treshold for Diferent Types of Technical Change 6.5 Constant Rate of Exploitation 6.6 Conclusion Further Readings 7 The Transformation Problem 7.1 Ricardo, Marx and Bortkiewicz 7.1.1 Getting Units Right 7.1.2 Marx’s Errors 7.1.3 The First Question and Its Answer 7.2 The Standard Interpretation 7.2.1 An Example of a Tree-Sector Economy Technology and Real Wage Bundle Gross and Net Output The Price System Maximal Rate of profit Actual Rate of profit 7.2.2 Closing the System with a Numeraire 7.2.3 Closing the System with Invariance Principles Invariance Principle 1 Invariance Principle 2 Invariance Principle 3 Invariance Principle 4 7.2.4 A Solution Algorithm 7.2.5 Numeraire versus Invariance Principles 7.2.6 Which Invariance Principle to Use? 7.3 Sraffa-Based Critique 7.4 Marxist Responses to the Sraffa-Based Critique 7.5 The New Interpretation 7.5.1 Value of Money 7.5.2 Value of Labour-Power The Conventional Definition The NI Definition 7.5.3 Answering the Two Questions 7.5.4 Incompleteness 7.6 Three Less Appealing Approaches 7.6.1 Macro-Monetary Interpretation 7.6.2 Temporal Single System Interpretation 7.6.3 Simultaneous Single System Interpretation 7.7 Conclusion Further Readings 7.A Appendix A: General Treatment 7.A.1 Technology 7A.2 The Value System 7A.3 Standard Interpretation Rate of Exploitation Relative Prices Fundamental Marxian Teorem Real Wage Rate-profit Rate Frontier Absolute Prices 7.A.4 New Interpretation with Homogeneous Labour Closing the System Fundamental Marxian Teorem A Solution Algorithm An Example 7.A.5 New Interpretation with Heterogenous Labour Technology and Value Average Nominal Wage Rate Prices of Production Monetary Expression of Value Existence of Solution and FMT 7A.6 Unequal Rates of Surplus Value 7.B Appendix B: R Code for Examples Discussed in Text 7.B.1 Standard Interpretation 8 Exploitation and Oppression 8.1 Theories of Exploitation 8.1.1 Qualitative Issues Forms of Oppression Centrality of Exclusion Market Power Is Not Essential 8.1.2 Quantitative Issues Standard Interpretation The Axiomatic Approach Generalizing the New Interpretation Superiority of the New Interpretation 8.2 A Critique of the Commodity Exploitation Teorem 8.2.1 Summary of AM Argument 8.2.2 A Critique of Proposition 1 8.2.3 A Critique of the CET Labour Values: Definition and Two Intuitions Food Values: First Intuition Food Values: Second Intuition 8.2.4 Commodity Exploitation: Conceptual Problem 8.3 Manifold Exploitations? 8.4 Exploitation and Distributive Justice 8.5 Conclusion Further Readings Bibliography Index