Letter: Economic Questions. (1930)

Letter to the Editors from the September 1930 issue of the Socialist Standard

To the Editor of the Socialist Standard.

Is it, or is it not, correct to hold that Marx used the term “Capital” in the sense of “Money,” seeing that all commodities are only “Money” circulating in a different way?

That the “Price of Production” (of commodities) is not “determined” by the “quantity of labour embodied in them,” but is ultimately “determined” by monopoly“?

An adherent of the. S.P.G.B. informed me that a lecturer on economics at headquarters seriously discussed the question as to whether a “cart-horse” is “constant” or “variable” capital. If this is a fact (?) then I feel bound to remark that the lecturer must be considered a “doctrinaire,” and in no way propagating “Socialism in Our Time.”

I trust you will favour me with a reply, because it is important to clear up such current conceptions—or “misconceptions.”

I remain, Yours faithfully,

Robert Chapman,

Walworth.

Reply:

The replies to the points raised are given below.

(1) This matter is dealt with in “Capital,” Volume I, page 123 (Sonnenschein Edition), in the following’ passage :—

“As a matter of history, capital as opposed to landed property, invariably takes the form at first of money; it appears as moneyed wealth, as the capital of the merchant and of the usurer. But we have no need to refer to the origin of capital in order to discover that the first form of appearance of capital is money. We can see it daily under our very eyes. All new capital, to commence with, comes on the stage, that is, on the market, whether of commodities, labour, or money, even in our days, in the shape of money that by a definite process has to be transformed into capital.”

(2) The “Price of Production” is the cost price plus the average profit. This is, of course, affected if the manufacturer has to buy raw materials from sellers who have a monopoly, and on the other hand the manufacturer’s selling price will be affected if he has a monopoly. In other words, the theory of value in its simple form assumes competition. Monopoly (which in practice is, however, only an interference with competition, not a complete suspension of it) modifies the simple theory. Nevertheless, the labour theory of value is still the underlying explanation, even in a world where monopoly is strong.

It must not be forgotten that there are many forces at work tending to undermine monopoly. This subject is dealt with in “Capital,” Volume III, pages 186, 209 and 1003 (Kerr Edition).

(3) Your point here appears to be that a lecturer should keep to main issues, and not devote attention to minor academic points. Once granted, however, that it is worth while studying economics, the lecturer cannot avoid dealing with such points if raised by a student. To the student a clear view of such points may often be necessary in order that he may understand the general theory.

Editorial Committee.

Answer to correspondent. 

S. Gilbert. Your long letter referring to the article “Parliament or Soviet” rests upon a supposed quotation from the “Gotha Programme.” As, however, the article contains no such quotation, we fail to see what is the point of your letter.