Re 4086 > > >I also have not found this interpretation in Meek or Sweezy. They, and >people like Bortkiewicz, Seton, and so forth seem not to have been >working with models of simultaneous determination of value. They instead >employed models of reproduction and, it seems to me, "deduced" their >interpretation from the "requirements" of reproduction. Andrew, As Allin posts have made clear, it seems that a simultaneous (or iterative) solution was justified not from a prior assumption of simple reproduction or equilibrium but as the only way by which a determinate transformation of the inputs could be carried out; moreover, the correct prices of prod for the outputs can indeed not be computed without those modified cost prices. Alejandro, Fred and the TSSers--whatever the other disagreements!--all take the inputs as already in price of production terms (I am unclear about you see this, though), but I consider this to be impossible since Marx had not yet derived the category of price of production in terms of which the inputs are to be transformed until the completion of the second tableau. They can't be sold at prices of production at the beginning of the tableau. I also therefore disagree with Sweezy, Duncan, Allin, Ajit and others that by having the inputs sell in money terms at value, instead of prices of production, Marx made a logical mistake--it would have been illogical for Marx to have invoked a category which he had not yet derived logically. To transform the inputs, Bort/Sweezy had to assume that the input prices were the same as the output prices--that is, the same PV ratios would apply to the inputs as the outputs, as Allin just displayed. This was done by putting the transformation tableau into equilibrium or simple reproduction models--that is, transforming Marx's own transformation. That is, they create a third tableau, again as Allin has done. Equations were then derived and solved for (and could be solved given one more condition because 1 of the other n equations had been removed arbitrarily by having input prices equal output prices, as Alan F has noted). No solution could respect both the 2 equalities; as Allin has indeed shown, any solution for the PVs derived for the ouputs and then applied to the inputs also disallows--aside from the breaking one of the two equalities--the value of the input mp and wg from determining the sum of the prices of production of the inputs. So there are really two of three equalities being broken, though this has yet to be pointed out as well. I have said all along that 1. this timeless and backwardly causal way of determining the input prices of production is worse than no solution at all. Alan F is of course right here even if no one is listening to him. 2. based on what his second tableau shows, it was perfectly reasonable for Marx to assume that no matter the prices into which the inputs were transformed, the sum of the prices of production of the input would be determined by their aggregate value just as in the case of the outputs. That this also implies that unit prices would change interperiodically is hardly unrealistic (Allin will see that his last response to me which he has retracted anyway makes the unreasonable assumption that total value/price cannot be different at t+2 than at t+1 even as labor time is being added to the system--that is, he has eliminated once again time subscripts). Why interperiodic change in unit prices is considered unreasonable may not so much be that this would break equilibrium or simple reproduction but that there would then be no way of uniquely *determining* unit input prices via homogeneous linear equations, not that such change is unrealistic. It was never asked whether there was any other way of transforming the inputs or whether for Marx's purposes they had to be transformed. That is, in order to solve the price problem--that is, to uniquely determine the kr's in Marx's tableau--it had to be assumed that the prices of prod into which the inputs were to be transformed were the same prices of production as the outputs--hence, the necessity of a simultaneous or iterative solution. Without this there is no way of getting the exactly right modified cost prices and thus uniquely determining the krs. And bourgeois economists feel naked if they cannot solve the price problem. 3. However, if the sum of the cost prices is not changed by the transforming of the inputs--and as I have been trying to show Allin, Marx was perfectly justified in assuming that what held for the ouputs would hold for the transformed inputs: total value would determine the sum of the prices of production for the inputs as well--then Marx's value theoretic determination of r and the resolution of the contradiction between the principle of the average rate of profit and the law of value remain COMPLETED on the basis of the demonstration in the second transformation tableau. I disagree with Allin and other critics that there is anything incomplete about Marx's solution to the exact problem which he set himself. It's a matter of reminding ourselves the exact problem Marx inherited from the Ricardo/Malthus debate. 4. Marx leaves behind the outstanding problem of the determination of the modified cost prices (the ks) on the basis of transformed inputs and thus the exact determination of the krs in each of the respective five branches because he has already shown that the form in which the law of value asserts itself in a developed capitalist society is no longer via the direct determination of prices. The analysis of capitalist reality on the basis of the law of value simply moves away from the determination of relative prices. 5. This does mean however Marx does not provide a rigorous solution to the same problem taken up by bourgeois microeconomics: equilibrium prices (see Korsch). He does however solve the problem which he set himself--turning Malthus' critique of Ricardo upside down (see Ilyenkov). That is, the more capital develops, the more the principle of the average rate of profit itself becomes the form in which the law of value asserts itself, rather than a modification or contradiction to the law of value. 6. Again, none of this proves that the law of value actually does assert itself in the form which Marx lays out. It is only a perfectly logical hypothesis. All the best, Rakesh
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