listproc@galaxy.csuchico.edu wrote: From: "Paul Cockshott" <paul@cockshott.com> To: <ope-l@galaxy.csuchico.edu> Subject: RE: [OPE-L:4152] Re: RE: Part Two of Volume III of Capital Date: Fri, 20 Oct 2000 09:59:54 +0100 >From Paul C: RakesH: At any rate, these vol 2 assumptions, in particular constant value (or input prices=output prices), are not to be carried over for economic analysis at any approximation to reality. Sweezy's declaration (note that he makes no real argument) that the transformation has to be solved in conditions of simple reproduction is based on the same total misunderstanding of the schema. Has anyone yet responded to this point of mine? Paul C: I agree that the examples used by Marx in his price of production theory are not reproduction schemes. On the other hand, if his tranformation technique were to be both consistent and general, it would apply under conditions of simple reproduction. The temporalist arguements seem to me to involve finding special cases where extended reproduction will cause Marx's transformation technique to give the right answer. Nobody will dispute that there are special cases where it works. One does not have to bring time into this, for example if all organic compositions are the same it will work. The question has always related to the generality of such solutions. Those objecting to Marx's technique have produced examples where they produce pathological results, positive profits with negative surplus value in Steadman's examples. It is not an adequate response to say that there are other special cases where Marx's method produces good results. Fair enough, but you need some response to the critique of lack of generality. Such a critique would have to be based on some argument either about the likelihood of certain classes of examples occuring, or from actual empirical observations of how often they occur. -----Original Message----- From: owner-ope-l@galaxy.csuchico.edu [mailto:owner-ope-l@galaxy.csuchico.edu]On Behalf Of Rakesh Narpat Bhandari Sent: 18 October 2000 20:04 To: ope-l@galaxy.csuchico.edu Subject: [OPE-L:4152] Re: RE: Part Two of Volume III of Capital Re Julian's 4150 > > > I find it very difficult to reconcile this kind of language with the >> idea that Marx made no distinction between the labor embodied in the >> constant capital and the money value of the constant capital at >> prices of production. >> > Marx's comment here seems to say no more than "be careful about >which -- of cost price and value of means of production used up -- you >identify as being the value of the inputs" (and by implication "choose the >cost price", according to Fred and TSSers). Julian, what is the value of the inputs? To what is this referring? As I understand Marx, the cost price is what determines the denominator for the rate of profit: s/c+v The (labor) value of the means of production used up, along with the surplus value produced by live labor, is formative of the new value added at the completion of production. (Of course the labor value of the used up means of production is socially determined.) Marx had to have assumed that the input means of production and wage goods sold at value in the construction of the tableaux since he had not yet derived the category price of production until the completion of the the second tableaux. Unlike what Fred and TSS is saying, this does indeed imply that the cost prices themselves for each of the five branches would have to modified to reflect means of prod and wage goods selling at prices of production. This is where my agreement with Ajit, Allin and others ends, for there is no textual evidence and no good reason to interpret Marx as saying that the unit inputs have to be transformed into the same unit prices of production as the outputs. There has been no citing of evidence to answer my challenge. To arrive at such "a vector of equilibrium prices" is simply a distortion of Marx's thinking. First, Marx was not a long periodist such that an analysis in terms of equilibrium UNIT prices (unit input prices=unit output prices) makes any sense. Duncan has not responded to my textual evidence and argument. Marx only said the changes in prices of production due to changes in the general rate of profit would only be manifest in a longer period, not that prices of production and in particular unit prices of production would not change over the shorter terms. Second, as I have said, Bortkiewicz's attempt to put the transformation back into the Vol II reproduction schema is based on incomprehension of the totally unrealistic nature of the latter; that is, grand, completely unrealistic simplfying assumptions such as constant value, exchange at value, annual turnover of fixed capital, etc. were built into the repro schemes *only* in order to make the study of the possibility of the realization of surplus value tractable. It was Marx's belief that the dropping of the assumptions would not affect the study of the specific problem he was analyzing, and Marx may have been wrong: it may not be possible to demonstrate realization of surplus value while still respecting the *technical* differences b/t the two deparments unless one allows for exchange at prices of production, instead of value--see Paul Z's accumulation essay and Mattick's criticism of Bauer in his Lenin and Luxemburg essay in Mattick's Anti Bolshevik Communism. Now there is a real problem in terms of how we are to understand replacement costs. The replacement costs of c or the means of production is what is substracted, along with the replacement costs of v or the wage goods, from the total value added to arrive at s. It is possible to define replacement costs as either the money cost already borne by the capitalist; then the time subscripts in the determination of the rate of profit would be the same r=NV-c+v at t/c+v at t. Or it is also possible to determine replacement costs as current costs to replace the *material* already used up. It seems to me that Marx uses both definitions. Then r=NV-c+v at t+1/c+v at t. In his analysis of the release of capital, Marx seems to use this latter formula, no? I think the latter formula is consistent with a temporal, sequential (and thus realistic) approach. I am however in agreement with TSS (Andrew in particular) that Marx never says the denominator should be in current costs. Note that if we use the latter formula, then it would not be possible to determine the net (value) product through the use of simultaneous equations. All the best, Rakesh ____________________________________________________________________ Get free email and a permanent address at http://www.netaddress.com/?N=1
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