Allin wrote in 4204 > >There is, however, an alternative view on which Marx's two >equalities do hold (regardless of dynamics and all that). This >is the view Andrew and Alan Freeman defend. It requires that we >conceive of the "value transferred to the product by the means >of production" not in the "standard" way, as the socially >necessary labour-time required to produce the means of >production, but rather as the price of the means of production >divided by the economy-wide MELT. (I think this claim >fundamentally breaks the labour theory of value and I can't >accept it.) Fred and Alejandro say the same thing. And I agree with you that they are all breaking from the labor theory of value in this regard. I stand on one simple point which Carchedi, Alan, and Fred however have indeed all made: it is incorrect to determine *simultaneously* the unit input prices of production with the unit output prices of production so that they are identical and you are left essentially with a self-replicating system. You cannot transform the inputs into the same unit prices of production as the outputs. One equation cannot be removed this way. That is, one must allow for unit prices of production to change interperiodically to reflect rising labor productivity. Under this assumption, there has been no proof of a transformation problem, which so far has been conducted on the assumption of simple reproudction or equilibrium prices. It's like that old problem of taking a 3 point by 3 point square and having only four lines to connect all of them without ever lifting a pencil. If one accepts the assumptions that no line can go outside the box or that all lines have to go through the center of the points, the problem cannot be solved. But once the hidden, unjustifiable assumptions are violated, then the solution is easy. The transformation problem is no different. All the best, Rakesh
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