Chapter 12: Supplementary Remarks
I. The Causes of a Change in the Price of Production
II. The Production Price of Commodities of Average Composition
In this section Marx discusses the deviation of production prices of those commodities which are produced by capitals of medium composition. The claim is that these prices are not values but that it makes no difference. This claim is confusing since we learned in Chapter 9, that the value of commodities is $k + s$, i.e. cost price + surplus-value. In the case of a capital of medium composition this coincides with $k + p$.
The only interpretation which makes sense here is that Marx compares two “worlds”. On the one hand, a hypothetical world in which everything is exchanged for value and, on the other hand, the real world where commodities are exchanged for prices of production. The result of this section would then be that the commodities produced by capitals of medium composition also do not exchange for prices which correspond to the values of the hypothetical value-exchanging world.
308:5 We have already seen that the divergence of price of production from value arises for the following reasons:
308:6 (1) because the average profit is added to the cost price of a commodity, rather than the surplus-value contained in it;
The first reason for a deviation is that we can have $k+p ≠ k+s$. Average profit can deviate from produced surplus-value and hence the production price can deviate from value. This result is known from Chapter 9.
309:1 (2) because the price of production of a commodity that diverges in this way from its value enters as an element into the cost price of other commodities, which means that a divergence from the value of the means of production consumed may already be contained in the cost price, quite apart from the divergence that may arise for the commodity itself from the difference between average profit and surplus-value.
Let us deal with what is being said here on its own before we relate it back to the claim in 308:5. The means of production that capitalists buy on the market and the means of subsistence that workers buy on the market are sold for production prices not at values. Hence, the production price enters the cost price and not the value of the means of production of the means of subsistence. There is a difference between what capital pays for $c$ and $v$ and what $c$ and $v$ are as values. In the latter case, we talk about the values of machines and means of subsistence. In the former case, we talk about parts of the advance or parts of capital in general. This is palpable when we consider the cost price. If the value of a commodity is $k+s$ then it is clear that the social costs for capital enter, as the name already expresses. The point is how much $c+v$ cost for capital, how much socially necessary labour is necessary to turn them into parts of capital.
Now, since (1) and (2) ought to serve as arguments that value and price diverge, it seems that Marx is claiming that prices of production deviate from value, because cost price ≠ values of commodities which enter into $c+v$. So he either takes a step backwards from value equals $k+s$ or he is comparing hypothetical values in a world where things are exchanged at value and the real capitalist world where commodities are thrown on the market by capital to realise profit. In this case, he would simply observe that the two worlds are more different than implied by (1) alone.
Because the claim that values can deviate from $k+s$ would lead to contradictions in Chapter 9 (the laws derived there could not all hold simultaneously because they would contradict each other) and because this is the crux of the so-called “transformation problem” (which only exists if values are different from $k+s$) it is worthwhile to spend a bit more time on this issue. Theories on Surplus-Value has a quite similar passage, where Marx discusses the question as he discusses here, but without the claim that the value of a commodity deviates from $k+s$. On the contrary:
MECW 32, 351:7 It is clear that the conversion of value into cost price works in two ways. First, the profit which is added to the capital advanced may be either above or below the surplus value which is contained in the commodity itself, that is, it may represent more or less unpaid labour than the commodity itself contains.
This is the same point as (1) above.
This applies to the variable part of capital and its reproduction in the commodity.
Marx here draws out a distinction between variable and constant capital. Since the advance in variable capital is reproduced in the value of the product anyway, it is clear that the point is not the value of means of subsistence, but their production price, i.e. what it costs to put living labour into motion. Workers must produce enough value so that they can afford the means of subsistence (+ a surplus) and thus the price of production of the means of subsistence enters as value component $v$ into the newly produced commodity.
But apart from this, the cost price of constant capital — or of the commodities which enter into the value of the newly produced commodity as raw materials, matières instrumentalesa and instruments and conditions of – may likewise be either above or below its value. Thus the commodity comprises a portion of the price which differs from value, and this portion is independent of the quantity of labour newly added, or of the labour whereby these conditions of production with given cost prices are transformed into a new product.
The cost price, which might differ from the value of the means of production, enters into the value of the newly composed commodity. Fiddlesticks, deviation of value from $k+s$.
It is clear that what applies to the difference between the cost price and the value of the commodity as such as a result of the production process — likewise applies to the commodity in so far as, in the form of constant capital, it becomes an ingredient, a precondition, of the production process. Variable capital, whatever difference between value and cost price it may contain, is replaced by a certain quantity of labour which forms a constituent part of the value of the new commodity, irrespective of whether its price expresses its value correctly or stands above or below the value. On the other hand, thé différence between cost price and value, in so far as it enters into the price of the new commodity independently of its own production process, is incorporated into the value of the new commodity as a presupposed element.
In summary, regardless of if variable or constant capital, what enters into the value of a commodity is the production price of $c$ and $v$ not the value of the means of production and of the means of subsistence. The value of $v$ is reproduced anyway and the amount that needs to be created must be enough to buy means of subsistence. The prices of production of those commodities which constitute constant capital enter as preconditions into the value creation process of the newly produced commodity.
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309:2 It is quite possible, accordingly, for the cost price to diverge from the value sum of the elements of which this component of the price of production is composed, even in the case of commodities that are produced by capitals of average composition.
This sentence is correct: the elements which are bought have different values from what it costs capital to buy them.
Let us assume that the average composition is $80c + 20v$. It is possible now that, for the actual individual capitals that are composed in this way, the $80c$ may be greater or less than the value of $c$, the constant capital, since this c is composed of commodities whose prices of production are different from their values.
How should we understand “$80c$ may be greater or less than the value of $c$”? 80c is the magnitude of value expended on constant capital. It makes sense to say that $80c$ are bigger or smaller than the value of commodities which enter into constant capital, if we take seriously the distinction between constant capital and the commodities which constitute it. But this is not what Marx is saying here. Instead, he is saying that $80c ≠$ value of constant capital, i.e. cost price ≠ “cost value”.
The $20v$ can similarly diverge from its value, if the spending of wages on consumption involves commodities whose prices of production are different from their values.
Same thing. What does it mean to say that $20v$ diverges from its value? To what is “its value” a reference? The second part is correct: means of subsistence are bought at prices of production and hence the advance for $v$ must suffice for these prices of production, otherwise the working class cannot do its deed for capital.
The workers must work for a greater or lesser amount of time in order to buy back these commodities (to replace them) and must therefore perform more or less necessary labour than would be needed if the prices of production of their necessary means of subsistence did coincide with their values.
How much necessary labour (in value: $v$) must be expended to buy the means of subsistence. The value of labour-power is how much labour is needed to buy the means of subsistence, not how much it takes to produce them.
310:2 Yet this possibility in no way affects the correctness of the principles put forward for commodities of average composition. The quantity of profit that falls to the share of these commodities is equal to the quantity of surplus-value contained in them. For the above capital, with its composition of 80c + 20v, for example, the important thing as far as the determination of surplus-value is concerned is not whether these figures are the expression of actual values, but rather what their mutual relationship is; i.e. that v is one-fifth of the total capital and c is four-fifths.
What matters is how much additional value is produced over what is needed to reproduce $v$. From the standpoint of the production of surplus-value the magnitudes of $c$ and $v$ are given and it does not matter how they came about; “actual values” should then be read as: “if all exchanges were for value”.
As soon as this is the case, as assumed above, the surplus-value ν produces is equal to the average profit. On the other hand, because it is equal to the average profit, the price of production = cost price + profit = k + p = k + s, which is equal in practice to the commodity’s value.
That “in practice” it holds that price of production = value for capitals of average composition supposedly means that it makes no difference how we think about the issue at hand here. That is, whether we concern ourselves with “real” or “actual values” or actual values as they exist when capitals produce for profit. In particular, we have:
In other words, an increase or decrease in wages in this case leaves k + p unaffected, just as it would leave the commodity’s value unaffected, and simply brings about a corresponding converse movement, a decrease or increase, on the side of the profit rate. If an increase or decrease in wages did affect the price of commodities in this case, the profit rate in these spheres of average composition would come to stand below or above its level in the other spheres. It is only in so far as their prices remain unaltered that the spheres of average composition maintain the same level of profit as the others. The same thing thus takes place in practice as if the products of these spheres were sold at their actual values. For if commodities are sold at their actual values, it is clear that with other circumstances remaining the same, a rise or fall in wages provokes a corresponding fall or rise in profit but no change in the commodity’s value, and that in no circumstances can a rise or fall in wages ever affect the value of commodities, but only the size of the surplus-value.
A variation of the wage does not affect the value of a commodity which is produced by a capital of medium composition. Newly created value is merely distributed differently between capital and labour. It is the same for the production prices of these commodities.