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Just to reiterate Grossmann's objection to the Bortkiewicz transformation
problem, which has given new life via Paul Sweezy's efforts to the
bourgeois critique of Marxian value theory which had already survived the
Austrian critique, thanks to the efforts of Boudin, Hilferding, Bukharin,
and Blake.
The conjoining of the schemes of simple reproduction with the
transformation problem demonstrates a complete and total incomprehension of
Marx's method.
The reproduction schema assume
1. exchange at value
2. annual turnover
3. constant value
The transformation tableaux drops all three assumptions: it introduces
the theory of the price of production; it allows for constant capital
to differ from used up capital; it allows for the unit input prices to
differ from unit output prices.
In the reproduction schema Marx is only trying to show the possibility of
GROWTH of an essentially static system. Indeed the demonstration is made
possible by the assumption of constant values.
In the transformation Marx is finally allowing his system to be dynamic.
That is, by dropping all the major assumptions of the reproduction schema,
he is more closely approximating the DEVELOPMENTAL dynamics of capitalist
reality.
The Bortkiewicz-Sweezy model attempts to drop the first assumption while
maintaining the other two. But Marx was obviously dropping all three--why
else did he differentiate used up c from c? Obviously he was no longer
assuming the annual turnover of fixed capital. This correction in Marx's
transformation tableaux simply disappears however in the
Bortkiewicz-Sweezy-Foley transformation models because in simply going back
to volume 2, they are all forgetting the assumptions Marx is dropping in
volume 3.
Once we drop the assumption of constant values and recognize that the
inputs are indeed in prices--why else did Marx refer to cost price--then
there is no transformation problem. My debate with Fred over the meaning of
c is a minor point in this regard.
Schumpeter long ago recognized that it was best not to do battle with Marx
over whether he was logically consistent in the way he hypothesized that
prices were derived from values. Marx's value is like Mendel's gene in
trying to account for capital's developmental tendencies. The bourgeoisie
can either argue on quasi positivist gorunds that the value gene is a
metaphysical or illogical concept or they can offer an alternative
explanation for the patterns of heredity, i.e., the developmental
tendencies of capital.
Thanks to Marxist economists, the debate has never really got past the
questions about metaphysics and logic. And Mattick Sr is probably correct
that economists are not comfortable with Marx's dropping of
assumptions in Vol 3 since this departs too disturbingly from the safe
waters of general equilibrium theory (see Marxism: last refuge of the
bourgeoisie?)
All the best, Rakesh
All the best, Rakesh
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