I wouldn't read your contrast, Numbers, as a contradiction. It can very well be that people create systems together which are impersonal and have a bizarre logic that constrains them. A bureaucracy, any workplace culture, a conflict dynamic in a relationship. The bizarre powers that guide people's relationships. — fdrake

@Moliere I do not think, fdrake, that when you write ‘people create systems together,’ you imply one of the theories of the Social Contracts. They are precisely the ones that Marx criticized. Let’s return to the quote from ‘A preface.’ ‘Men inevitably enter into definite relations, which are independent of their will,’ which means he talks about conscious individuals with their intentions and goals. On the other hand, ‘the totality of these relations of production constitutes the real foundation, on which arises a legal and political superstructure and to which correspond definite forms of social consciousness.’ What is the relation between individual consciousness and ‘forms of social consciousness’? Marx pointed it out: “The epoch which produces this standpoint, that of the isolated individual, is also precisely that of the hitherto most developed social (from this standpoint, general) relations. The human being is in the most literal sense not merely a gregarious animal, but an animal which can individuate itself only in the midst of society” (Marx, Grundrisse, p 18). So, in ‘A preface,’ Marx starts with people who ‘create systems’, but means that social symbolic systems ultimately determine individual consciousness. Yet, there is neither a circular causality nor the Hegelian sublation of dialectical moments. Because ‘the definite relations of production’ has the ultimate priority as an intrinsic cause.

the specifically productive relationships that have conscious people "collide within them" are characterised by a bizarre alien, self sustaining logic that the process of production generates and sustains. — fdrake

In the Marxist tradition, articulating the relations of individual and larger social forces has always been one of the most challenging problems. Because masses or ordinary members of totalitarian or bureaucratic organizations too often have not recognized their inferiority. They do not feel like they are ruled by an alien, violent imposition. Ideology as the explanatory theoretical framework has ultimately failed. In ‘Fragments on the Machines,’ Marx briefly outlined how to evade a trap of ideological and essentialist conceptualizations.“The accumulation of knowledge and of skill, of the general productive forces of the social brain, is thus absorbed into capital, as opposed to labour, and hence appears as an attribute of capital. The transformation of the means of labour into machinery and of living labour into a mere living accessory of this machinery, as the means of its action, confronts living labour as a ruling power and as an active subsumption of the latter under itself, not only by appropriating it but in the real production process itself.” (Marx, Grundrisse, p 694) The infrastructure is not conceived here as an essence, having an ultimate literal sense; it is in the process of capital’s metamorphoses. On the other hand, the mechanical, cognitive, and social ‘organs’ of the social brain, the living labour, and the workers themselves constitute moments of the same process. All are subsumed under the overall automatic activity. Therefore, the social and individual domains no longer confront each other. Social subjection and individual agency have become indiscernible poles of the machinic
engagement.

Social subjection and individual agency have become indiscernible poles of the machinic engagement. — Number2018

Is the contrast you are bringing out between what @Moliere and I's shared position and what you're stating is that we're emphasising the poles of the "machinic engagement" rather than their reciprocity. As in, are you interpreting what we've both written as too focussed on individuals and societal processes as really independent entities, rather than ones which are conceptually distinct but mutually determining?

How does the social contract play into that? As a means by which individuals coordinated volitions become normatively binding?

Continuing from here:

“(4) PRODUCTION. MEANS OF PRODUCTION AND RELATIONS OF PRODUCTION. RELATIONS OF PRODUCTION AND RELATIONS OF CIRCULATION. FORMS OF THE STATE AND FORMS OF CONSCIOUSNESS IN RELATION TO RELATIONS OF PRODUCTION AND CIRCULATION. LEGAL RELATIONS. FAMILY RELATIONS.”

This subsection seems to be simultaneously a digression and an acknowledgement of loose ends from the rest of the discussion in this section. We've previously gone through production, consumption, exchange, circulation and distribution briefly - and shown these interdependent social processes are generated and sustained by the dynamics of production processes. Reference to "the state", the "population", international relations, nations and so on were also in the section, and these haven't been written about yet. There's some bullet points on some topics related to these.

Do you think this subsection is one of those digressions of profound insight Harvey spoke about, @Moliere? Or does it have a more central; or culminatory; role in the section?

The bullet points go as follows:
1 ) War precedes peace. War creates and demarcates societies, which can exist in peace afterwards. Put another way, the steadiness of bourgeoise society depends on past violence.
2 ) Historiography and anthropology are kinda bullshit unless they're also looking at economic functioning. Political economy needs to be included in any analysis of culture and states.
3 ) Lots of issues are derivative of the character of production in society. Cultural inheritance and politics can behave like organisational constraints to the productive process without changing the fundamental aspects of the circuit of capital.
4 ) Marx seems to feel the need to distinguish his concept of materialism from naturalistic materialism. It's difficult for me to tell if this is referencing physicalism in political economy, Marx's inheritance from Greek metaphysics. Or both of them. Or none of them.
5 ) How the means of production and relations of production (making stuff considered through what's made and how vs making stuff considered as a social organisation) relate to each other and their internal tensions (@Jamal - think this is the theme you highlighted in your recent post on Dialectic of Enlightenment.
6 ) Institutional development can decouple from productive development. See Roman private law and modern production.
7 ) How has the possibility of a global conception of history and production become possible in bourgeoise society? This relates to the theme of capitalist economy concentrating and maintaining its predecessors and the role they still play in the current developmental trajectory of capital.
8 ) I've no idea what this means. Something related to "population" as a fundamental category for analysis, but considered in an anthropological sense? Maybe Marx thinks he can do it better with his new way of analysing history.

There's then a digression on the development of art and the human imagination. A thoroughly wonderful pair of quotes within it:

All mythology overcomes and dominates and shapes the forces of nature in the imagination and by the imagination; it therefore vanishes with the advent of real mastery over them.

A man cannot become a child again, or he becomes childish. But does he not find joy in the child’s naïvité, and must he himself not strive to reproduce its truth at a higher stage? Does not the true character of each epoch come alive in the nature of its children? Why should not the historic childhood of humanity, its most beautiful unfolding, as a stage never to return, exercise an eternal charm? There are unruly children and precocious children. Many of the old peoples belong in this category. The Greeks were normal children. The charm of their art for us is not in contradiction to the undeveloped stage of society on which it grew. [It] is its result, rather, and is inextricably bound up, rather, with the fact that the unripe social conditions under which it arose, and could alone arise, can never return.

I think this is a simultaneous statement of a few things:
A) The old art is dead, we are no longer in the social form to create it.
B) We still imitate the old art, it's an aspirational goal.
C) This references the "uneven development" of social, aesthetic and economic processes.
D) We have a nostalgia for the old art.
E) But we've got the potential to create new art.

I can hear Adorno grumpily burning their approving gaze into the back of this passage's head.

think this is the theme you highlighted in your recent post on Dialectic of Enlightenment — fdrake

Possibly. I do recognize that my post in the Shoutbox describing the disappointment I experienced yesterday when eating a plum pie was a good example of the divergence of use value and exchange value.

By the way, when it comes to Marx’s political economy, I read Capital volume 1 many years ago but haven’t revisited it much since then and haven’t read the Grundrisse. I’m interested—I only wish I could get over my antipathy to anything in the vicinity of economics. Sublimated anxiety over money, probably.

Keep up the great work :up:

Is the contrast you are bringing out between what Moliere and I's shared position and what you're stating is that we're emphasising the poles of the "machinic engagement" rather than their reciprocity. As in, are you interpreting what we've both written as too focussed on individuals and societal processes as really independent entities, rather than ones which are conceptually distinct but mutually determining?

How does the social contract play into that? As a means by which individuals coordinated volitions become normatively binding? — fdrake

As far as I see, @Moliere admitted that his/her position is just a preliminary note of Harvey’s lecture.
I have yet to understand your position, likely because you quickly embraced Moliere's non-elaborated one. But, yes, it looks like both of you are talking about individuals and systems rather in terms of really independent entities than in terms of processes. For me, both individuals and systems are moments, and may be results of interdependent societal processes. They do not designate stable unities; instead, they are appearances of structured, complex, self-completing processes. Stating that 'people create systems' resembles a post factum fabulation that may be affiliated with the Social Contract theories. Under certain conditions, events in the making can appear as retaining their identity and even as 'individuals coordinated volitions.' Systems theorist Nicklas Luhmann noted: "' Homo economicus' is a social construct. What constitutes the unity of action and how the identity of an actor can be determined through the attribution of actions cannot be discovered by plumbing his internal mental life. For the continuation of its own operations, society, and its organizations, assume the unity of individual and person as an operational fiction." (Luhmann, 'Organization and decision' p 67) System's 'normatively binding' cannot merely be a result of 'individuals coordinated volitions', it is an autopoietic operational domain. What one experiences as rational choices and volitions most often emerges on the level hiding the imperatives of the encompassing machinic engagement. A spectrum of rational judgements is pre-given and pre-determined. The unconscious presuppositions implanted in the field make the unfolding event unrecognizable. Most often, systems secure possible chains of effects and outcomes independent of the will of individual.

The Chapter on Money

Like Harvey, I'm going to skip most of this chapter. The first bit is looking at a spreadsheet which a Proudhon-ist had (for Marx) misinterpreted. And the spreadsheet itself allegedly shows Proudhon's idea was wrong, or at least insufficiently justified. I don't know any Proudhoun, so I can't comment how successful the criticism was. I believe the criticism. broadly stated, is that Marx sees Darimon and Proudhon as construing credit as a form of money circulation. Which is bad. Maybe because they go in opposite directions around the circuit of capital. You pay for a thing (money circulation, passing money on), you ask someone else to give you a lend (taking on a debt, making a promise to pass money on later).

Marx construes the error highlighted in the spreadsheets as an instance of a more fundamental error - can you reform an individual institution in the circuit of capital to improve things? Yeah! But can you reform an institution in the circuit of capital to remove anything which is necessary to the functioning of capital? Hell no. So anything it partakes in which is necessary to the functioning of capital is not reformable without attacking more fundamental parts of the circuit of capital. Those non-reformable parts include every injustice and pathology so implied by the fundamental developmental mechanisms of capital. Like power dynamics between bosses and workers, landlords and workers, landlords and companies and so on.

The chapter then goes into how reforming the monetary system, in principle, would not work. Why? Anything which would work to make money flow around capital's circuit needs to imitate all of its functioning. So it wouldn't matter if money is gold or silver or a chit of paper. It would still need to do what it needs to do for capital. There's a bit on how money needs the commensuration of all types of labour and thus needs to work as a universal quantifier on value. Those ideas seem to be developed more thoroughly in Capital Vol 1.

There's a passage on depreciation of product values. Marx's brief account is that if 1/10 of the expected grain was produced over a season. Someone who buys the grain at 10 times the price would change all purchasing patterns in the economy. If the buyer values grain as 10 times the price it did before a crisis, then all other products require 10 times as much quantity as they did previously to be equal in value to a given amount of grain. So if X multiply in value by a factor of A, then all other things have their value divided by a factor of A. This represents "the decreased productivity of capital in all other forms".

“With or without metallic money, or money of any other kind, the nation would find itself in a crisis not confined to grain, but extending to all other branches of production, not only because their productivity would have positively diminished and the price of their production depreciated as compared to their value, which is determined by the normal cost of production, but also because all contracts, obligations etc. rest on the average prices of products. For example, x bushels of grain have to be supplied to service the state’s indebtedness, but the cost of producing these x bushels has increased by a given factor. Quite apart from the role of money the nation would thus find itself in a general crisis.”

Which is stressed that a crisis in the production of a commodity is not principally a monetary crisis - "where is all the gold going now lol? shit we don't have enough gold, it's a crisis" -, it's "our country is bleeding gold because we're spending it all on grain imports".

Marx expresses a germinal form of his labour theory of value - that the value of something is equated to its socially necessary labour time. Again that theory is detailed more in Capital Vol 1. But there is a cool quote showing that Marx saw there being a strong distinction between value and price!

“ Price therefore is distinguished from value not only as the nominal from the real; not only by way of the denomination in gold and silver, but because the latter appears as the law of the motions which the former runs through. But the two are constantly different and never balance out, or balance only coincidentally and exceptionally. The price of a commodity constantly stands above or below the value of the commodity, and the value of the commodity itself exists only in this up-and-down movement of commodity prices. Supply and demand constantly determine the prices of commodities; never balance, or only coincidentally; but the cost of production, for its part, determines the oscillations of supply and demand. ”

There is a very striking passage on the relationship of alienation and the production of exchange value:

“The reciprocal and all-sided dependence of individuals who are indifferent to one another forms their social connection. This social bond is expressed in exchange value, by means of which alone each individual’s own activity or his product becomes an activity and a product for him; he must produce a general product – exchange value, or, the latter isolated for itself and individualized, money. On the other side, the power which each individual exercises over the activity of others or over social wealth exists in him as the owner of exchange values, of money. The individual carries his social power, as well as his bond with society, in his pocket. Activity, regardless of its individual manifestation, and the product of activity, regardless of its particular make-up, are always exchange value, and exchange value is a generality, in which all individuality and peculiarity are negated and extinguished. This indeed is a condition very different from that in which the individual or the individual member of a family or clan (later, community) directly and naturally reproduces himself, or in which his productive activity and his share in production are bound to a specific form of labour and of product, which determine “his relation to others in just that specific way."

“The social character of activity, as well as the social form of the product, and the share of individuals in production here appear as something alien and objective, confronting the individuals, not as their relation to one another, but as their subordination to relations which subsist independently of them and which arise out of collisions between mutually indifferent individuals. The general exchange of activities and products, which has become a vital condition for each individual – their mutual interconnection – here appears as something alien to them, autonomous, as a thing.”

The concepts which later become alienation and commodity fetishism are rooted in the monetary system, in this analysis. I'm quoting it because it's an under-appreciated point made very precisely. Alienation and commodity fetishism aren't mental attitudes, they're social phenomena characteristic of exchange in capital's monetary system. Which, themselves, influence how people think and feel.

The very necessity of first transforming individual products or activities into exchange value, into money, so that they obtain and demonstrate their social power in this objective [sachlichen] form, proves two things: (1) That individuals now produce only for society and in society; (2) that production is not directly social, is not ‘the offspring of association’, which distributes labour internally. Individuals are subsumed under social production; social production exists outside them as their fate; but social production is not subsumed under individuals, manageable by them as their common wealth. There can therefore be nothing more erroneous and absurd than to postulate the control by the united individuals of their total production, on the basis of exchange value, of money, as was done above in the case of the time-chit bank.

I think this is related to what @Number2018 was writing about earlier. That construing the circuit of capital as a collective exercise of agency, of agents coming together and binding their wills to reproduce a system, misses the phenomenon. This is because the social medium in which agents come together is distinct from the social mediums by which agents assemble to produce institutions. In essence, the institutions of capital are an entire separate social sphere, an entire separate social process, which acts parasitically upon the collective agency of its agents. Parasitically and constrainingly. This goes hand in hand with labourers producing, principally, exchange value detailed in the previous passage.

I think there's a lot of value (lol) in Chapter 2, it's providing very condensed and quite pithy statements of arguments which are more laboriously made elsewhere.

Another thing which interests me is that this chapter provides a good example of Marx's method. We started off with money, Now we've seen a lot of concepts unfold from its analysis - social and productive preconditions and interdependencies. With exchange. With production. With value. Marx also located criticisms of other economists within this unravelling of fundamental assumptions. This allows him to contextualise the work of others within his own "working out" of the behaviour of capital. And thus reveal whatever misapprehensions (bad inferences, bad starting points) he believes they have.

“It is because the commodity is exchange value that it is exchangeable for money, is posited = to money. The proportion of its equivalence with money, i.e. the specificity of its exchange value, is presupposed before its transposition into money. The proportion in which a particular commodity is exchanged for money, i.e. the quantity of money into which a given quantity of a commodity is transposable, is determined by the amount of labour time objectified in the commodity. The commodity is an exchange value because it is the realization of a specific amount of labour time; money not only measures the amount of labour time which the commodity represents, but also contains its general, conceptually adequate, exchangeable form. ”

This one is also really interesting to me, a point I've really not understood before. The distinction and dependence between value and price, use and exchange etc - these codependent dyads - isn't just a conceptual distinction. It's also seen as internal to the account as an active process. A "real contradiction" Why? I think it's clearest to see with value and price. Price deviates from value through supply, demand and asymmetries in production. The deviation isn't a statement or defect, the deviation is productive and indeed generative of a dynamic in capital - the untethering of money from labour, entailed by and suggestive of the untethering of use from exchange. It isn't just a conceptual bifurcation of dependent opposites, it's two contrary social processes being in tension within one greater movement. The distinction itself is part of the model, an active part, as well as the two differentiated terms.

Value is at the same time the exponent of the relation in which the commodity is exchanged with other commodities, as well as the exponent of the relation in which it has already been exchanged with other commodities (materialized labour time) in production; — Moliere

I read this as exponent in the sense of "person who expresses a view or represents it" - so value represents the relation in which a commodity is exchanged with other commodities (X is worth Y) and also represents the relation in which it has already been exchanged with other commodities (X had SNLT equal to the SNLT of Y).

(SNLT = socially necessary labour time)

In terms of phrasing, I think "exponent" imbues something agential to value - it's kinda personalising and developmental. Rather than static, like a price, or a quantification of labour time. More like the means of quantification of labour, and the articulation of the means of quantification of labour.

Still trying to figure out my schedule. I'm catching up with reading today, like last week. I like your expositions @fdrake. They are helping me see some of the structure that I wasn't seeing, and are very lucid.

For next week, just fyi, the final reading for online is on this page on the following paragraph:

An interest of 24 on a capital of 40 is too much; but 24 = 3/5 of 40 (3 × 8 = 24); i.e. in addition to the capital, only 2/5 of the capital grew by 100%; the whole capital therefore by only 2/5, i.e. 16%. [67] The interest computation on 40 is 24% too high (by 100% on 3/5 of the capital); 24 on 24 is 100% on 3 × 8 (3/5 of 40). But on the whole amount of 140, it is 60% instead of 40; i.e. 24 too much out of 40, 24 out of 40 = 60%. Thus we figured 60% too much on a capital of 40 (60 = 3/5 of 100). But we figured 24 too high on 140 (and this is the difference between 220 and 196); this is first 1/5 of 100 then 1/12 of 100 too much; 1/5 of 100 = 20%; 1/12 of 100 = 8 4/12% or 8 1/3%; thus altogether 28 1/3% too high. Thus on the whole not 60%, as on 40, but only 28 1/3% too much; which makes a difference of 31 2/3, depending on whether we figure 24 too many on the 40 [or on] the capital of 140. Similarly in the other example.

In the first 80 which produce 120, 50 + 10 was simply replaced, but 20 reproduced itself threefold: 60 (20 reproduction, 40 surplus).

Hours of labour
If 20 posit 60, making up triple the value, then
60 180.

For next week, just fyi, the final reading for online is on this page on the following paragraph:

An interest of 24 on a capital of 40 is too much; but 24 = 3/5 of 40 (3 × 8 = 24); i.e. in addition to the capital, only 2/5 of the capital grew by 100%; the whole capital therefore by only 2/5, i.e. 16%. [67] The interest computation on 40 is 24% too high (by 100% on 3/5 of the capital); 24 on 24 is 100% on 3 × 8 (3/5 of 40). But on the whole amount of 140, it is 60% instead of 40; i.e. 24 too much out of 40, 24 out of 40 = 60%. Thus we figured 60% too much on a capital of 40 (60 = 3/5 of 100). But we figured 24 too high on 140 (and this is the difference between 220 and 196); this is first 1/5 of 100 then 1/12 of 100 too much; 1/5 of 100 = 20%; 1/12 of 100 = 8 4/12% or 8 1/3%; thus altogether 28 1/3% too high. Thus on the whole not 60%, as on 40, but only 28 1/3% too much; which makes a difference of 31 2/3, depending on whether we figure 24 too many on the 40 [or on] the capital of 140. Similarly in the other example.

In the first 80 which produce 120, 50 + 10 was simply replaced, but 20 reproduced itself threefold: 60 (20 reproduction, 40 surplus).

Hours of labour
If 20 posit 60, making up triple the value, then
60 180. — Moliere

Ambassador you are spoiling me.

More chapter 2

The remainder of chapter two splits into two themes.

The first theme is the behaviour of money. We've already looked at how money works as a value, and how that value is represented; at least notionally; by amounts of precious metals. A given amount of gold is used as the value of a given amount of any other commodity. That represents its value.

In Dungeons and Dragons terms, the blacksmith has taken three hours of their time to make a dagger for you. That's the modal amount of labour for forging a dagger. Three hours of that amount of labour has the going rate of one gold. Thus the value of the dagger is one gold. Though perhaps there is a young dragon nearby, and you really need a dagger, so you may pay a lot more than one gold for it. Would you pay 100 gold? 100 times the value? Maybe, but very unlikely. That it can be considered a "very unlikely" price to pay, societally, is an instance of value constraining price without being numerically identical with it.

That facilitates looking at money *as a value* - which is something that can be abstract, imagined, conceptual, legally constrained and so on. And also as a product; precious metals serve as the material repositories of value and thus the glue of exchange relations. These dual functions are in tension with each other, and this tension is required for money to play the role it does in circulation.

The second theme is analysing circulation itself.

The behaviour of money is ultimately the behaviour of exchange value.

Money is in the first instance that which expresses the relation of equality between all exchange values: in money, they all have the same name.)

It's a material expression of exchange value. How exchange values behave dictates how money behaves; but money may disobey.

“Exchange value, posited in the character of money, is price. Exchange value is expressed in price as a specific quantity of money. Money as price shows first of all the identity of all exchange values; secondly, it shows the unit of which they all contain a given number, so that the equation with money expresses the quantitative specificity of exchange values, their quantitative relation to one another. Money is here posited, thus, as the measure of exchange values; and prices as exchange values measured in money. ”

I read "money as price shows first of all the identity of all exchange values" as that exchange values are totally commensurated by amounts of money representing definite values. How much one thing is worth is qualitatively identical to how much something else is worth scaled up. If 2 goats is worth 1 egg, 4 goats is worth 2 eggs. We've got different total values in trade, but the same set of value ratios which the money represents as a price. Similarly, if 2 goats or 1 egg are worth 1 gold. Then 4 goats or 2 eggs are worth 2 gold.

In that regard, exchange value is a (scarequotes) a "flat medium", a single undifferentiated dimension that holds all equal to a given amount of gold. I'm imagining it as a number line. Every fraction of gold is worth a given fraction of every commodity.

__1 gold piece___1.5 gold pieces_____2 gold pieces
{here lay 2 goats} {here lay 2 eggs}

The "flat medium" facilitates the ascription of exchange value to a product to quantify its value. That makes it function as a price. It can be used to quantify how much anything trades for.

“The fact that money is the measure of prices, and hence that exchange values are compared with one another on this standard, is an aspect of the situation which is self-evident. But what is more important for the analysis is that in price, exchange value is compared with money. After money has been posited as independent exchange value, separated from commodities, then the individual commodity, the particular exchange value, is again equated to money, i.e. it is posited as equal to a given quantity of money, expressed as money, translated into money. By being equated to money, they again become related to one another as they were, conceptually, as exchange values: they balance and equate themselves with one another in given proportions.”

I found this passage confusing and profound in equal measure. What I'm getting from it is that there are two separate acts which establish the equation of money and exchange value. The first act is money being used as something like a shop label, and the process which sets the number on it. That takes an exchange value (how much value is in this thing?) and assigns it a number (constrained by supply, demand and other things, how much do we charge for it). But simultaneously the act of assigning a number to an exchange value through a money takes the money and assigns it to a given value. The commensuration relationship money has is posited, necessitated, and thus reproduced in every such act. This occurs in shops, but also in the mind. It's simultaneously a social and an ideal commensuration. The commodity is now exchangeable for an abstraction, by means of exchanging that abstraction's material representative (real money).

“Alongside real money, there now exists the commodity as ideally posited money.”

This ideality of money, alongside it being a "flat medium" for the expression of value quantities, facilitates is second function as a unit of account.

“Real money intervenes only in order to realize payments and to balance (liquidate) the accounts. If I must pay 24 livres 12 sous, then accounting money presents 24 units of one sort and 12 of another, while in reality I shall pay in the form of two material pieces: a gold coin worth 24 livres and a silver coin worth 12 sous.”

“Accounting money is an ideal measure, which has no limits other than those of the imagination. ”

Money on the books isn't the same thing as money out in the wild. I can calculate that I owe @Moliere 5 goats. I don't thereby conjure up 5 goats which I may give them. We'd be square if I gave them 5 goats. Not 5 inexistent goats. The same holds for currency tokens and material repositories of value.

Except, there's a tension between a unit of account and money needing a material representative. I can say I am in Moliere's debt, needing to pay him 5 goats. But if Scotland was in debt to Moliere's nation to the tune of 56 million goats... We wouldn't have enough goats, even in principle, to pay. Thus units of account, being notional, can be regulated differently than material repositories of value like gold.

I'm not going to be able to write more notes this late in the day. But shall try to finish them. Turns out cramming before class never gets old.

Turns out cramming before class never gets old. — fdrake

:D

Page 284... just shy of the mark. Luckily, looking ahead, March 7th is Spring Break/Book Release, so there's a lull for us to catch up in just around the corner. I have captured some good highlights, but my reading was more through the dead leaves this time so I'd be less distracted. I'll type some of them up as I listen to class

Page 284... just shy of the mark. Luckily, looking ahead, March 7th is Spring Break/Book Release, so there's a lull for us to catch up in just around the corner. — Moliere

Will be good to catch up on it. Found these readings a real slog. How'd you find them?

Oh, these are harsh to get through, I'm not going to lie. Capital was poetry in comparison :D

"Capital is not a simple relation, but a process, in whose various moments it is always capital" -- this makes me think of what you were highlighting @Number2018, under the section titled "Transition from circulation to capitalist production -- Capital objectified labour etc. -- Sum of values for production of values." on page 258.

Harvey's lecture: "When you isolate equality, freedom, and reciprocity as admirable attributes, then you are admiring bourgeois attributes" -- I like Harvey pointing out how these are bourgeois values in class, and argues that bourgeois constitutions, like the United States, already sustain those values in terms of exchange.

A good definition of capital right across the page of my last quote on 259:

"As soon as money is posited as an exchange value which not only becomes independent of circulation, but which also maintains itself through it, then it is no longer money, for this as such does not go beyond the negative aspect, but it is capital"

--- Harvey just mentioned a phrase that keeps coming up in the reading "point of departure", still trying to wrap my head around that one in a technical sense, but I'm thinking that might be a ghost chase too

Posit/presuppose from Harvey -- that was nice to hear. I'd never thought of "posit" as "you have to add something else"

This is a good picture Harvey points out between Use-value and Exchange-value, where use-value disappears, but exchange-value lives on in circulation.

Interesting highlight between simple exchange, and capital on page 272:
"Labour as mere performance of services for the satisfaction of immediate needs has nothing whatever to do with capital, since that is not capital's concern. If a capitalist hires a woodcutter to chop wood to roast his mutton over, then not only does the woodcutter relate to the capitalist, but also the capitalist to the woodcutter, in the relation of simple exchange"

Harvey highlights this from page 278:
"It must be kept in mind that the new forces of production and relations of production do not develop out of nothing, nor drop from the sky, nor from the womb of the self-positing Idea; but from within and in antithesis to the existing development of production and the inherited, traditional relations of property. While in the completed bourgeois system every economic relation presupposes every other in its bourgeois economic form, and everything posited is thus also a presupposition, this is the case with every organic system. This organic system itself, as a totality, has its presuppositions, and its development to its totality consists precisely in subordinating all elements of society to itself, or in creating out of it the organs which it still lacks. This is historically how it becomes a totality"

Interesting that Harvey believes the Grundrisse is a prelude to a new society. Whereas Capital is strictly a scientific treatise, Harvey decides to read the Grundrisse as a sort of answer to the proverbial question "OK, what now?" -- and he gives an answer which allows us to answer the question, which is interesting. As if the "what now?" is purposefully not addressed.

Hrm! Interesting Harvey's reading about totality/organism as opposed to syllogism (ala, bourgeois economics).

Made dinner listening and now I'm at the part I've yet to read in the lecture.

Again, I like how Harvey keeps connecting the text to our world.

Hrm! "Labor is the yeast" -- interesting analogy, given that yeast reproduces itself, and you're able to scoop some off at the end before it dies to keep making more product!

I'm glad to hear Harvey emphasizing "roles" too -- "worker" is a role within a process, and not a macho man pouring molten iron with his bare hands just to feed his family. "the worker" is a role as is "the capitalist"

***

And into Q&A.

"Do not come out of the Grundrisse expecting to have a coherent labor theory of value" interesting.

"you could say there are 5, or rather 4, or rather 3 classes" :D -- I'm glad Harvey's responding to the questions with honesty, in saying "I admit this part is odd, and this is why": some motivation to dig deep

On the question of bourgeois freedoms: good question. And I like how Harvey doesn't just say "Yes", but points out how these are still bourgeois values. "not so much the transformation of the ideological concepts, but the practices which will allow those ideological precepts to make sense"

"remember it's an alienated labor and an alienated capital, right throughout for next time"

"remember it's an alienated labor and an alienated capital, right throughout for next time" — Moliere

I was going to write this down here too.

:D Great minds and such.

His little snippets after the fact have been quite useful in looking back, so I was glad he gave us one to think through rather than just the pure text as it is -- which we both agree is pretty hard, even though we're interested in it!

so I was glad he gave us one to think through rather than just the pure text as it is — Moliere

Me too.

Posit/presuppose from Harvey -- that was nice to hear. I'd never thought of "posit" as "you have to add something else" — Moliere

This was also a great highlight. I'm going to try and read it with the analogy: presupposition as "part of the foundation", positing as "the next bit of how it's being built". Need the first to get going, need the second to keep going.

This was also a great highlight. I'm going to try and read it with the analogy: presupposition as "part of the foundation", positing as "the next bit of how it's being built". Need the first to get going, need the second to keep going. — fdrake

Right! That's a good breakdown as I understood it.

“A developed determination of prices presupposes that the individual does not directly produce his means of subsistence, but that his direct product is an exchange value, and hence must first be mediated by a social process, in order to become the means of life for the individual.”

A good reminder that the process by which prices are assigned to commodities piggybacks off extant social processes. In that regard price assignment isn't generative of the value of products, instead the production of products for exchange/production being production of value is generative of price assignments - in totality and in amount.

Money thus circulates in the opposite direction from commodities. It appears as the middleman in commodity exchange, as the medium of exchange. It is the wheel of circulation, the instrument of circulation for the turnover of commodities; but, as such, it also has a circulation of its own – monetary turnover, monetary circulation. The price of the commodity is realized only when it is exchanged for real money, or in its real exchange for money.

... M-C-M-C-M ...
Is the transfer of money ( M ) to commodity ( C ) to money to commodity of exchange. If you start off with a commodity - like labour power or an egg - your path "forwards" is C-M-C-M... If you start off with money, your path "forwards" is M-C-M-C... which is the same as reversing the direction of the transition of commodities. Just like {1,2,3,4} and {4,3,2,1} are reversed sequences.

The real circulation of commodities through time and space is not accomplished by money.

I think this amounts to saying that circulation is more than a sequence of barter like trades, or direct exchanges.

Money only realizes their price and thereby transfers the title to the commodity into the hands of the buyer, to him who has proffered means of exchange.

Money, instead, works as a standard of entitlement to a commodity. Thou shalt pay me at least $3.50 to obtain the sandwich. Whether you pay $3.50 for the sandwich or not still needs more than the price.

What money circulates is not commodities but their titles of ownership; and what is realized in the opposite direction in this circulation, whether by purchase or sale, is again not the commodities, but their prices.

Money's direction of circulation: M-C..., A person uses an amount of money M1 to buy a commodity C1 which transfers M1 to the previous owner of C1 (still first step). That takes C1, which was owned by a shop or something, and transfers its ownership rights to the purchaser.

Commodities direction of circulation: C-M......, a person has a commodity C1 which has a given value, that value is realised in an act of exchange of money amount M1 for commodity C1. This simultaneously uses a valuation of C1 and realises it as a price M1.

The quantity of money which is, then, required for circulation is determined initially by the level of the prices of the commodities thrown into circulation. The sum total of these prices, however, is determined firstly: by the prices of the individual commodities; secondly: by the quantity of commodities at given prices which enter into circulation.

Every link in the circulation ...-C-M-C-M-... thus needs a given amount of money to allow the transaction. That money is also tradable - as gold. The money must be realised in the transaction for it really to have taken place. That means for an economy (totality!?)'s circulation to be ongoing, it posits enough money existing at a given time point to enable every exchange. Marx gives an example:

“For example, in order to circulate a quarter of wheat at 60s., twice as many s. are required as would be to circulate it at 30s. And if 5,000 of these quarters at 60s. are to be circulated, then 300,000 s. are required, while in order to circulate 200 such quarters only 12,000s. are needed. Thus, the amount of money required is dependent on the level of commodity prices and on the quantity of commodities at specified prices.

“Thirdly, however, the quantity of money required for circulation depends not only on the sum total of prices to be realized, but on the rapidity with which money circulates, completes the task of this realization. If 1 thaler in one hour makes 10 purchases at 1 thaler each, if it is exchanged 10 times, then it performs quite the same task that 10 thalers would do if they made only 1 purchase per hour. Velocity is the negative moment; it substitutes for quantity; by its means, a single coin is multiplied.”

“Still, as already mentioned, the circulation of money does not begin from a single centre, nor does it return to a single centre from all points of the periphery (as with the banks of issue and partly with state issues); but from an infinite number of points, and returns to an infinite number (this return itself, and the time required to achieve it, a matter of chance). The velocity of the circulating medium can therefore substitute for the quantity of the circulating medium only up to a certain point. (Manufacturers and farmers pay, for example, the worker; he pays the grocer, etc.; from there the money returns to the manufacturers and farmers.) The same quantity of money can effectuate a series ”
“of payments only successively, regardless of the speed. But a certain mass of payments must be made simultaneously. Circulation takes its point of departure at one and the same time from many points. A definite quantity of money is therefore necessary for circulation, a sum which will always be engaged in circulation, and which is determined by the sum total which starts from the simultaneous points of departure in circulation, and by the velocity with which it runs its course (returns). ”

Holding the number of simultaneous exchanges fixed, if there are 5 simultaneous exchanges per second of a quarter of wheat, each at 60s, you'd need 300s per second to facilitate this. If instead there were 2 simultaneous exchanges. You'd need only 120s. Furthermore, if the price of a quarter was 30s, you'd need 150s and 60s respectively.

Putting this in explicitly mathsy terms: circulation of a commodity priced at M1 at a number of exchange per unit time N1 requires M1*N1 total money per unit time to facilitate the trade of that commodity. Thus the total amount of money required to circulate N1 simultaneous trades of M1, called T1, would be: T1=M1*N1.

This holds when we have N1 exchanges of M1 for C1 at the same time. This is N1 multiples of the M1 for C1 step. Like C-M, C-M, C-M .

However, if the exchanges are instead seen as sequential and simultaneous - a series of M1 -> C1 -> M1 -> C2 -> M1.... a number of sequential trades P1 occurring per second t1 of a definite fixed value M1, then you'd need only T1=M1/P1 money to execute all of those exchanges. eg 10 purchases of value 1 thaler, considered as the above sequence, would only need 1 thaler each. This would also hold in the aggregate, over all commodities.

Putting both ideas together you end up with T1 = M1*N1/P1 money required per unit time (t1). M1*N1 seems to be called the "mass of commodity prices" and M1*N1/P1 is called the "velocity of money".

Marx then takes this quantity and says that it behaves as a constraint for the total quantity of money required, rather than an iron law at any given time. Approximately correct unless something's gone very wrong. Hypothetically if there was no money, there'd be no trades. If there was 1 thaler per unit time and the total volume of trade required 100 thaler per unit time, there'd be no trades. And there being a lot more money in circulation than M1*N1/T1 for trades involving C1 only makes sense if M1 was somehow greater than M1 (for a fixed time point), or if there was an overabundance of money allocated for circulation at one time point, which was then carried forward to the next.

That look about right to you @Moliere?

There were two "buts" I had while reading (I'm sticking to my no working on weekends commitment.;) )

Thus the total amount of money required to circulate M1, — fdrake

I can't tell if we're supposed to be able to derive how much money should be in circulation at a given time, or if it'd be better to somehow substitute, for M1, some function of the quantity of goods in a market, something like a supply-demand function. At times it seems like he's focused on a single commodity market, almost as literally as the market metaphor would have us think, and then he quickly expands to say "of course the banker pays the grocer pays the clerk pays the gas man and that would influence how much money is needed too".

Also, and this may be nothing I'll say up front -- I'm wondering about the differences between M-C-C-M/C-M-M-C and the latter, as you've broken it out. (EDIT: Just to be clear, "the latter" I mean M-C-M/C-M-C, "latter" as in coming from Capital)

But, with that being said, I think that the mathematization is a nice clean picture, and while I'm still trying to tease out this possible difference in meaning ala the M-C-M-C... formulations, I do tend to think of each one of those parts of exchange as forming a chain as you've laid it out, and you can look at each dayd as a moment, and depending upon which side you start with tells you which moment you're dealing with.

There were two "buts" I had while reading (I'm sticking to my no working on weekends commitment.;) ) — Moliere

Please show me your buts when you can be arsed. Assuming you haven't already laid them bare.

I can't tell if we're supposed to be able to derive how much money should be in circulation at a given time, or if it'd be better to somehow substitute, for M1, some function of the quantity of goods in a market, something like a supply-demand function. At times it seems like he's focused on a single commodity market, almost as literally as the market metaphor would have us think, and then he quickly expands to say "of course the banker pays the grocer pays the clerk pays the gas man and that would influence how much money is needed too". — Moliere

I also get that impression. There's a sleight of hand too, I think. The first example talks about exchanges only for quarters of wheat - and as if all the trades occur at once. Effectively multiplying the trade volume at any given time. The second example instead talks about consecutive trades involving the same thaler - independent of what commodity is traded. Like how much each thaler changes hands within a given time period.

for M1, some function of the quantity of goods in a market, something like a supply-demand function

Makes sense. I guess a rejoinder could be M1 is already a function of those things as Marx has construed? Though there's certainly not enough information presented, so far, to determine why the commodity has a price in particular. I think Marx is aware of the difficulty:

With circulation, the determined price is presupposed, and circulation as money posits it only formally. The determinateness of exchange value itself, or the measure of price, must now itself appear as an act of circulation. Posited in this way, exchange value is capital, and circulation is posited at the same time as an act of production. — Marx

exchange value itself, and now no longer exchange value in general, but measured exchange value, has to appear as a presupposition posited by circulation itself, and, as posited by it, its presupposition. The process of circulation must also and equally appear as the process of the production of exchange values. — Marx

If you took supply and demand as inputs into the process of circulation, in determining price, and each instance of commodity circulation was a trade, it would involve both shifts in supply and demand depending on the frequency of trade for the commodity (demand proxy?) and the volume of that commodity already in circulation (supply proxy?). In that regard determinants of price are also part of the circulation process. In that regard circulation "appear{s} as the process of production of exchange values".

The only way I can think of resolving this strangeness is thinking of Marx's analysis of "mass of commodities" and "velocity of money" as a formal determination rather than a concrete one. It says "given (whatever makes this commodity trade at this value), circulation behaves (thusly)". Maybe that's why "measured exchange values" must appear "as a presupposition posited" by circulation. Not only are determinate values of commodities presupposed as foundational for circulation, the fact that they are presupposed as foundational is maybe posited for the process's continuation.

An analogy; letting agent can fix a house's rent at $1000 dollars per month if they want and still turn a profit. The letting agent will also perceive that the house would have a market rate of $1200 per month rent. Maybe a "market rate" is like positing of a presupposition , there needs to be such a price for a valuation of the house to return a specific value (presupposed), but also that $1200 has been posited as the "going rate" for agreeing to that rent.

Still thinking about that.

Also, and this may be nothing I'll say up front -- I'm wondering about the differences between M-C-C-M/C-M-M-C and the latter, as you've broken it out. (EDIT: Just to be clear, "the latter" I mean M-C-M/C-M-C, "latter" as in coming from Capital) — Moliere

I'm not sure about this either. Thanks for pointing this out, I love the value theory in Marx!

When we now examine the original form more closely, the direct form in which circulation presents itself, C–M–M–C, then we see that money appears here as a pure medium of exchange. The commodity is exchanged for a commodity, and money appears merely as the medium of this exchange. The price of the first commodity is realized with money, in order to realize the price of the second commodity with the money, and thus to obtain it in exchange for the first. After the price of the first commodity is realized, the aim of the person who now has its price in money is not to obtain the price of the second commodity, but rather to pay its price in order to obtain the commodity. — Marx, Grundrisse

I'm reading this as a sequence of C-M into M-C, which is like a sale and then a purchase. Of two distinct commodities. So may as well write it C1-M, M-C2. I don't think it's clear that all of this process is really occurrent, some parts of it are abstract. The final M-C step seems to be "to pay the price {for C2} in order to obtain it". The first step seems to be "to turn C1 into the amount of value it represents as a price form/numerical magnitude". I think the M-M step in the middle is thus the connection of those two prices as equivalent - which employs the medium of exchange.

I say "employs" rather than "is" because this act fictive in the same way as squaring accounts would be. Unit of account as imaginary representative != money as a physical quantifier of value which may be used in exchange.

“Regarded as measure the material substance of money is essential, although its availability and even more its quantity, the amount of the portion of gold or silver which serves as unit, are entirely irrelevant for it in this quality, and it is employed in general only as an imaginary, non-existent unit. In this quality it is needed as a unit and not as an amount.

So maybe C1-M-M-C2 is a single "instance" of exchange which is part of circulation. It also begins with a commodity and ends with one; to "obtain" the commodity C2 might also make it drop out of circulation. Like if you buy food to eat it.

What about M-C-C-M? It's seen as "just as correct" as C-M-M-C. But it's treated differently.

“We now pass on to the third function of money; which initially results from the second form of circulation: M–C–C–M; in which money appears not only as medium, nor as measure, but as end-in-itself, and hence steps outside circulation just like a particular commodity which ceases to circulate for the time being and changes from marchandise to denrée.

“Money, then, has an independent existence outside circulation; it has stepped outside it. As a particular commodity it can be transformed out of its form of money into that of luxury articles, gold and silver jewellery (as long as craftsmanship is still very simple, as e.g. in the old English period, a constant transformation of silver money into plate and vice versa. See Taylor) [72] ; or, as money, it can be accumulated to form a treasure."

"“This comes from its independence as a result of M–C–C–M. In the case of money as capital, money itself is posited (1) as precondition of circulation as well as its result; (2) as having independence only in the form of a negative relation, but always a relation to circulation; (3) as itself an instrument of production, since circulation no longer appears in its primitive simplicity, as quantitative exchange, but as a process of production, as a real metabolism”

Thus this seems to be start with money M, get commodity C (purchase), use commodity C to get Commodity C', sell commodity C' to get M'. The C-C relationship in the middle seems to be construed as production.

But first it must be noted that, once the quality of money as an intrinsic relation of production generally founded on exchange value is presupposed, it is possible to demonstrate that in some particular cases it does service as an instrument of production. ‘The utility of gold and silver rests on this, that they replace labour.’ (Lauderdale, p. 11.) [71] Without money, a mass of swaps would be necessary before one obtained the desired article in exchange. Furthermore, in each particular exchange one would have to undertake an investigation into the relative value of commodities. Money spares us the first task in its role as instrument of exchange (instrument of commerce); the second task, as measure of value and representative of all commodities (idem, loc. cit.). The opposite assertion, that money is not productive, amounts only to saying that, apart from the functions in which it is productive, as measure, instrument of circulation and representative of value, it is unproductive; that its quantity is productive only in so far as it is necessary to fulfil these preconditions.

M-C-C-M thus seems to be M-C-M' from Capital:

Buying in order to sell, or, more accurately, buying in order to sell dearer, M—C—M′, appears certainly to be a form peculiar to one kind of capital alone, namely, merchants’ capital. But industrial capital too is money, that is changed into commodities, and by the sale of these commodities, is re-converted into more money. The events that take place outside the sphere of circulation, in the interval between the buying and selling, do not affect the form of this movement. Lastly, in the case of interest-bearing capital, the circulation M—C—M′ appears abridged. We have its result without the intermediate stage, in the form M—M′, “en style lapidaire” so to say, money that is worth more money, value that is greater than itself. — Marx, Capital Vol 1

Because the C-C aspect of circulation is seen as a productive relation, it's thus not necessarily exchange value preserving.

Furthermore, that also comes up in the discussion of money capital in Capital in Vol 2 . The general formula being:

M — C ... P ... C' — M'

investment -> stuff (less means of production and reproduction of workers) ... workers do stuff ... investors have new stuff -> sell the new stuff for more money than you started. To quote:

The circular movement [1] of capital takes place in three stages, which, according to the presentation in Volume I, form the following series:

First stage: The capitalist appears as a buyer on the commodity- and the labour-market; his money is transformed into commodities, or it goes through the circulation act M — C.

Second Stage: Productive consumption of the purchased commodities by the capitalist. He acts as a capitalist producer of commodities; his capital passes through the process of production. The result is a commodity of more value than that of the elements entering into its production.

Third Stage: The capitalist returns to the market as a seller; his commodities are turned into money; or they pass through the circulation act C — M.

Hence the formula for the circuit of money-capital is: M — C ... P ... C' — M', the dots indicating that the process of circulation is interrupted,and C' and M' designating C and M increased by surplus-value. — Marx, Capital Vol 2

M-C-C-M' is an abbreviation of that process too. C-M-M-C' may arise by sandwiching two circulations together:

M — C ... P ... C' — M' ; M' — C ... P ... C'' — M''

You have C'-M'-M'-C as a subprocess. That's reinvestment, which is also construed (here) to be taking the produced commodity basket C', selling it for M', which is alchemised through equivalent valuation (the medium of exchange) into a quantity of your inputs C. That's a "circulation of commodities" through capital. C-M-M-C thus seems to be equivalent to "simple exchange" in Capital Vol 1, with M-C-C-M equivalent to a (nonspecified) advancement of capital.

Hopefully this isn't too much of an asspull.
_____________________________________________________________________________________
More circulation stuff:

Couple of brief notes on circulation in general:

( 1 ) It takes the alienation and divestment that occur in production and embeds it in every social process. Every point of life marked by exchange becomes part of alienation and divestment. Thus, all points of life.
( 2 ) Circulation also thus appears as alien to those who are part of it. The mediation of circulation by the total social process, value for value - secretly labour for labour, takes the world a capitalist economy is supported by and presents it back to those within it as a social reality in which they determine no part. Circulation appears and behaves as if it were autonomous, independent of the agents which collectively maintain it through their actions and self sustaining, but in reality is not and cannot be that way.

Chapter on Capital

“Out of the act of exchange itself, the individual, each one of them, is reflected in himself as its exclusive and dominant (determinant) subject. With that, then, the complete freedom of the individual is posited: voluntary transaction; no force on either side; positing of the self as means, or as serving, only as means, in order to posit the self as end in itself, as dominant and primary [übergreifend]; finally, the self-seeking interest which brings nothing of a higher order to realization; the other is also recognized and acknowledged as one who likewise realizes his self-seeking interest, so that both know that the common interest exists only in the duality, many-sidedness, and autonomous development of the exchanges between self-seeking interests. The general interest is precisely the generality of self-seeking interests. Therefore, when the economic form, exchange, posits the all-sided equality of its subjects, then the content, the individual as well as the objective material which drives towards the exchange, is freedom. Equality and freedom are thus not only respected in exchange based on exchange values but, also, the exchange of exchange values is the productive, real basis of all equality and freedom.”

An amazingly concise set up of the bourgeoise conception of freedom and how it's rooted in exchange. Two people are equal in exchange, equal in need, and their volition alone seals the deal between equals. Equals as economic subjects ("reflected in himself as {exchange's} exclusive {determinant} subject").

“In Roman law, the servus is therefore correctly defined as one who may not enter into exchange for the purpose of acquiring anything for himself (see the Institutes). [22] It is, consequently, equally clear that although this legal system corresponds to a social state in which exchange was by no means developed, nevertheless, in so far as it was developed in a limited sphere, it was able to develop the attributes of the juridical person, precisely of the individual engaged in exchange, and thus anticipate (in its basic aspects) the legal relations of industrial society, and in particular the legal relations of industrial society, and in particular the right which rising bourgeois society had necessarily to assert against medieval society. But the development of this right itself coincides completely with the dissolution of the Roman community.”

The economic subject is further rooted in the concept of a "juridical person" "engaged in exchange". The juridical person is an abstraction of a person which nevertheless has social force - that's pretty similar to the generic worker considered as a value creator, and they are also situated in exchange; like selling their labour power. This seems to simultaneously argue that these concepts in Roman law prefigured and paved the way for subjectivities in exchange relations, and also that the mechanism which generate abstract kinds of people with a pre-specified relationship to exchange (the servus) came along with it. The legal subject of a worker and its subordinate status came from the same idea.

M-C-C-M thus seems to be M-C-M' from Capital: — fdrake

Think this really holds in Grundrisse:

“Capital comes initially from circulation, and, moreover, its point of departure is money. We have seen that money which enters into circulation and at the same time returns from it to itself is the last requirement, in which money suspends itself. It is at the same time the first concept of capital, and the first form in which it appears. Money has negated itself as something which merely dissolves in circulation; but it has also equally negated itself as something which takes up an independent attitude towards circulation. This negation, as a single whole, in its positive aspects, contains the first elements of capital. Money is the first form in which capital as such appears. M–C–C–M; that money is exchanged for commodity and the commodity for money; this movement of buying in order to sell, which makes up the formal aspect of commerce, of capital as merchant capital, is found in the earliest conditions of economic development; it is the first movement in which exchange value as such forms the content – is not only the form but also its own content. This motion can take place within peoples, or between peoples for whose production exchange value[…]”[

“Commercial capital is only circulating capital, and circulating capital is the first form of capital; in which it has as yet by no means become the foundation of production. A more developed form is money capital and money interest, usury, whose independent appearance belongs in the same way to an earlier stage. ”
/quote]

M-C-C-M looks to be money capital of some kind. Labelled "merchant capital", but by the looks of it a "more developed form" of it is the "money capital" of the initial analysis of money capital in Vol 2 of Capital.

The C-C transition also seems to be construed as production:

“Circulation therefore does not carry within itself the principle of self-renewal. The moments of the latter are presupposed to it, not posited by it. Commodities constantly have to be thrown into it anew from the outside, like fuel into a fire. Otherwise it flickers out in indifference. It would die out with money, as the indifferent result which, in so far as it no longer stood in any connection with commodities, prices or circulation, would have ceased to be money, to express a relation of production; only its metallic existence would be left over, while its economic existence would be destroyed. Circulation, therefore, which appears as that which is immediately present on the surface of bourgeois society, exists only in so far as it is constantly mediated.

And in that regard mediates exchange, just as in M-C...P...C'-M'.

Finally Marx shows the reciprocal dependence of production and circulation.

“We have therefore reached the point of departure again, production which posits, creates exchange values; but this time, production which presupposes circulation as a developed moment and which appears as a constant process, which posits circulation and constantly returns from it into itself in order to posit it anew. The movement which creates exchange value thus appears here in a much more complex form, since it is no longer only the movement of presupposed exchange values, or the movement which posits them formally as prices, but which creates, brings them forth at the same time as presuppositions. Production itself is here no longer present in advance of its products, i.e. presupposed; it rather appears as simultaneously bringing forth these results; but it does not bring them forth, as in the first stage, as merely leading into circulation, but as simultaneously presupposing circulation, the developed process of circulation. (Circulation consists at bottom only of the formal process of positing exchange value, sometimes in the role of the commodity, at other times in the role of money.)

“This movement appears in different forms, not only historically, as leading towards value-producing labour, but also within the system of bourgeois production itself, i.e. production for exchange value. ”

Moreover, as part of the process of production - as production for exchange - production generates circulation. Presumably in the same manner as production generated exchange, distribution and so on in the first chapter.

I came across a good passage today that relates pretty directly. Honestly, this section is proving to be a lot easier than the previous ones. And his splitting up into a alpha and beta "result" when taking the production process as content of capital gets along with your guess along the lines of concrete/formal characters of capital. (And, in this, I'm beginning to glimpse a distinction between material and both of those -- because Marx refers to the exchange value in capital circulation which does not exist circulation as a kind of rarified, formal value that still exists, and in a way is more material because of its alien character than, say, the concrete description of the labor process, which intentionally points out how the worker is a part of that)

I've never seen a passage in Marx that puts together the labor theory of value and how it relates to supply/demand until this one. It's so clear that there certainly must be another passage in Marx that disproves it somehow ;) :

The use value of a thing does not concern its seller as such, but only its buyer. The property of saltpetre, that it can be used to make gunpowder, does not determine the price of saltpetre; rather, this price is determined by the cost of production of saltpetre, by the amount of labour objectified in it. The value of use values which enter circulation as prices is not the product of circulation, although it realizes itself only in circulation; rather, it is presupposed to it, and is realized only through exchange for money. Similarly, the labour which the worker sells as a use value to capital is, for the worker, his exchange value, which he wants to realize, but which is already determined prior to this act of exchange and presupposed to it as a condition, and is determined like the value of every other commodity by supply and demand; or, in general, which is our only concern here, by the cost of production, the amount of objectified labour, by means of which the labouring capacity of the worker has been produced and which he therefore obtains for it, as its equivalent.

So, supply-demand as a more particular force on commodity price, or in the more general form, the cost of production, or the amount of objectified labor, but in this much wider sense where the laboouring capacity is what's being produced along with -- so not an individual firm, the economics of the firm, supply/demand, but rather the total, and therefore political, economy.

At least, it's a quote from the Grundrisse I can now flip out to support my general interpretation of Marx.

Oh, yes, I forgot to mention -- that your theory between the Grundrisse/Capital forms works! (ala M-C-C-M/M-C-M, etc.)That makes a lot of sense. Thanks for taking a stab at it.

I'm not holding back "buts" in this conversation either -- I'm just really open-ended on a first reading, even if I'm familiar with a writer. And this being notebook selections, rather than a worked out whole, ups the difficulty in making strong assertions even more.

This seems to be a relatively concise picture of of the relationship of exchange value to circulation and capital at this point in the book. It specifically regards how capital is distinct from, but reciprocally dependent on circulation and exchange. In particular, capital explicitly requires labour which produces for exchange as simultaneously a link in the circulation of capital and a break within it. This break is a generative tension - capital needs labour there to amplify produced values with each advancement.

“Differently expressed: Exchange value, as regards its content, was originally an objectified amount of labour or labour time; as such it passed through circulation, in its objectification, until it became money, tangible money. It must now again posit the point of departure of circulation, which lay outside circulation, was presupposed to it, and for which circulation appeared as an external, penetrating and internally transforming movement; this point was labour; but [it must do so] now no longer as a simple equivalent or as a simple objectification of labour, but rather as objectified exchange value, now become independent, which yields itself to labour, becomes its material, only so as to renew itself and to begin circulating again by itself. And with that it is no longer a simple positing of equivalents, a preservation of its identity, as in circulation; but rather multiplication of itself. Exchange value posits itself as exchange value only by realizing itself; i.e. increasing its value. Money (as returned to itself from circulation), as capital, has lost its rigidity, and from a tangible thing has become a process. But at the same time, labour has changed its relation to its objectivity; it, too, has returned to itself[…]”

This paragraph seems to be a break down of M-C-C-M circulation and what this circulation/money capital advancement does to the concept of exchange value.

An exchange value "was originally" (in simple circulation) an "objectified amount of labour, or labour time. As such it passed through circulation, as an {object representative of a given amount of labour time} until it became money, tangible money". It then gets transformed through the advancement of money capital. The progression M-C-C-M. Each letter and - is a distinct part.

M: "It must now again posit the point of departure of circulation" - exchange value came from objectified labour considered as a representative of value, it posits an item that will exchange for it. When exchanged, it realises the value assigned to it by the totality of the economy - through the conditions of labour and market forces. It was taken "out of circulation", from a previous M-C-C-M cycle, as a previous terminal point. This is exchange value as some store of money, which is entering the circulation again.

M-C: " ; but [it must do so] now no longer as a simple equivalent or as a simple objectification of labour, but rather as objectified exchange value, now become independent" - the money re-enters circulation, only to drop out of it again as a commodity, but the commodity considered as a repository of value. This will be grist for the mill of production, but that production is for exchange. Thus the commodity remains considered as a representative of its exchange value.

C-C: " but rather as objectified exchange value, now become independent, which yields itself to labour, becomes its material" - , the commodity, as a representative of exchange value, has its use value modified (work done on it), but the labour done to assemble and shape the product's use value simultaneously increases the "labour done in the past" to that product, and thus the advancement accumulates more labour, which increases value. The modification of the input use value turns to an amplification of the output exchange value. That modification, as production for profit, posits a final transformation to realise the amplified value in this step. A sale.

C-M: "only so as to renew itself and to begin circulating again by itself. And with that it is no longer a simple positing of equivalents, a preservation of its identity, as in circulation; but rather multiplication of itself." the C-M step is the realisation of what was posited in C-C - the transformation of the output value of C into a generic representative of value (like gold),

That returns the process to a generic representative of value which "must now again posit the point of departure of circulation". And the cycle repeats.

Exchange value posits itself as exchange value only by realizing itself; i.e. increasing its value. Money (as returned to itself from circulation), as capital, has lost its rigidity, and from a tangible thing has become a process. But at the same time, labour has changed its relation to its objectivity; it, too, has returned to itself

The transformation money capital has performed on exchange value is that, instead of exchange of equivalents - which occurs in the M-C and C-M steps - the middle link is no longer an equation of values, it's a production of value itself. In that regard, exchange value itself no longer can reasonably be seen to derive from a process which renders commodities equivalent, exchange value itself requires production and maintenance ; and the name of this process is capital.

Page 322 -- there are these quotes and times in Marx which crack me up because the arguments he's responding to are old even then, and I hear them today. One such quote in today's reading:

Thus the economists take refuge in this simple process in order to construct a legitimation, an apology for capital by explaining it with the aid of the very process which makes its existence impossible. In order to demonstrate it, they demonstrate it away. You pay me for my labour, you exchange it for its product and deduct from my pay the value of the raw material and instrument which you have furnished. That means we are partners who bring different elements into the process of production and exchange according to their value

"That means we are partners" is what made me smile. Might as well say we're all a family while we're at it :D