In 3974, Allin writes: >Rakesh writes [3973] re. my last reply on the transformation, > >"I don't see how this is a response at all." > >OK, time to stop on that topic; the discussion is not going >anywhere. You argued that it complicated matters to make the transformation both a solution to a dynamic price problem and the resolution of the contradiction between the average rate of profit and the law of value. You said that we had to forget about the first and concentrate on the second. But I already said that I was not interested in the price problem! Marx is not seeking a determinate solution to the first, only a resolution of the second contradiction. This is why you are simply not responding to me. I agree that I have not been as clear as I should be, so let my try again. Under the influence of bourgeois price theory and its explantory aims, most scholars have simply missed the exact problem Marx had inherited from Ricardo and Malthus--E Ileyenkov is a sharp exception in his actual intellectual reconstruction of the debate. Moreover, due to Marx's solution the explanadum of value theory is no longer even relative prices. That is why I have said that it does not matter what the inputs are transformed into (we only would have to know that and a host of things to arrive at the determinate prices of production for the outputs), as long as one simply rules out that they are determined simultaneously with the prices of the production of the outputs. This is the only saving assumption--the extirpation of simultaneism as John E puts it--one has to make to accept as logically possible Marx's value theoretic resolution of said contradiction. I have not tried to complicate the transformation by trying to solve two problems at once--the determination of relative prices and the resolution of said contradiction. I have said over and over that we don't need to know what the transformed input prices had to have been to understand the logic of Marx's resolution of said contradiction. So I have said that we should give up on any claim that we have in the strict sense determined or can determime the unit input prices and thus the unit output prices (forget prices!); rather we should understand at the very abstract level at which it is pitched the logic of Marx's reversal of Malthus' critique of Ricardo. As I said, a third tableau with new numbers in the cost price column could have easily been drawn up, which would then change the average rate of profit and prices of production from from the second tableau but would maintain the two equalities in terms of itself. The reason Marx does not draw up such a tableau is because there is no data already on the table to determine the prices of production produced in the previous period. Using simultaneous equations simply forces this period to hold for the last period. That is, it is a completely arbitrary (as well as atemporal, backwardly causal, and fantastically unrealistic--see Alan F) method of determining unit input prices. As I have said many times, an unreasonable solution is worse than no solution. This is an independent point to which you or Ajit could have responded by now. Since Alan F had published this criticism almost twenty years ago, Ajit could have recognized it in his Encyclopaedia piece. So my point is that the second completed transformation tableau is not sufficient to determine exact unit input and thus output prices, and it should not be forced to provide answers which it cannot possibly deliver by reconfiguring it via the use of simultaneous equations. For those in search of a price theory, this would seem to leave us nowhere. But again we don't need to know what the unit input prices were to understand how Marx has resolved the second contradiction, the actual problem in which he was interested. That is, there is still the same value theoretic determination of the average rate of profit: total value (which has a determinate monetary expression based on the assumption of a constant value of money) minus total (modified) cost price=total profit, which is then divided by total modified cost price=r; correlatively, the prices of production are kr. This is all we need to understand to grasp Marx's reversal of Malthus' critique of Ricardo. We don't need the actual values for the variables to understand that far from contradicting or modifying the law of value, the principle of the average rate of profit itself has been shown in these abstract terms to be most important form in which the law of value asserts itself in a developed capitalist society. The sheer intellectual excitement of having turned Malthus upside down has been missed due to what Shaikh has called a poverty of algebra. (That Malthus has turned out to have been quite an influential figure: his criticism of the theory of labor value is still the primary one--the contradiction between the law of value and the average rate of profit--and his population theory seems to have had pernicious influence on Keynes according to John Toye; I won't return to the debate about whether he influenced Darwin and Wallace). Now whether the law of value actually does govern bourgeois society in this form of the average rate of profit that yet seems to most decisively contradict it becomes a matter of hypothesis testing. Now Allin, I must say, that your analysis of moral depreciation seems most helpful, and look forward to giving it a careful read. My first question is the about the implications which moral depreciation may have for the ferocity with which capitalists will confront strikers. For when they return, the moral depreciation may have been severe enough that the investment simply cannot be recouped and capital thereby destroyed? Knowing this, industrial capitalists may reason that control over the strike weapon is of paramount importance, a matter of life and death for the capitalist, as personification of capital. All the best, Rakesh
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