Fred, In a word, I am arguing that the formula for the determination of value cannot be cost price + surplus value. (1) k + s = V It is simply obvious that there are many cases in which the cost price could rise without any change in the value of a commodity. For example, wage goods could become more expensive due to rising ground rent payments; the cost price of commodities would thus rise but this does not ipso facto raise the value of the produced output (we must simply remember that Marx's theory of surplus value originates out of Ricardo's critique of Smith's adding up theory of price). So your formula simply cannot be correct even if Marx himself uses it as shorthand. The formula has to be (2) Lmp + Lc = V And this is what is creating the problem for your interpretation. I agree that the inputs don't have to be transformed from values to prices of production. We can take them as givens. We can accept your insightful argument that Marx finally lets on that the cost price has not been determined by the value of the inputs per se but their prices of production. But here's the problem: in constructing his transformation tableaux, Marx had assumed that prices are proportional to value--in my shorthand, P <> V. Now the standard interpretation says that this implies the inputs have to be transformed from values or value prices to prices of production. I agree that your criticism of the standard interpretation is powerful. Marx is indeed not calling for that; he is now showing us that "value" was only partial explanation of the determinants of the cost prices of commodities. But in your interpretation this means that Marx had assumed at an earlier point that the value of the means of production was proportional to their prices or equal thereto (assuming an m of 1). This means that Marx has mistakenly assumed that value of those used up means and thus the value embodied in the final product was proportional to the price paid for them. I argue that (1)it is to this very error that Marx is pointing on p. 265 (you earlier called my interpretation an inverse transformation problem--which is exactly what I am saying since what needs to be modified is not the inputs but the used up constant capital column in Marx's transformation tableaux since we can no longer assume after Marx's argument is fully developed that the value of the used of means of production is the same as the value of the money needed to pay for them); and (2) this is why Marx notes later that value and price of production diverge for two reason--that is, a commodity's value is determined the (a) value of the means objectified therein and (b) newly added value while the price of production of a commodity is determined by (a*) cost price and (b*) average profit. So the divergence between commodity value and price of production result both from the divergence between a and a* and b and b*. This is why Marx on p. 263 says commodity value now splits into TWO elements: cost price on the input side and average profit on the output side. I shall continue to puzzle over your argument that Marx's treatment of a capital of average composition proves that he should not have said--as he clearly does on p. 309--that there are two reasons for divergence of which your interpretation cannot make sense. This--along with your formulation for the determination of value--is my main challenge to your interpretation. All the best, Rakesh
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