re 4371 >Sorry Rakesh, > >But I regard this particular argument of Marx's: > >"As Fred says, the macro magnitudes are determined prior to, and are >determinative of, the micro magnitudes of the rate of profit and the >prices of production (see also Blake, 1939; Mattick, 1983)." > >(for once I can't quickly locate the original by Marx, but I do know it) > >as one of the greatest kludges he ever attempted to pull. That capitalism, >which is inherently a competitive class system, should somehow operate as a >true collective of capitalists as to the division of surplus-value, I >regard as pure nonsense. Steve, Marx is saying that it is exactly by inherent competition in search of the maximum profit that capitalists tendentially come to share equally in the mass of surplus value which the working class as a whole produces (there are of course tendencies working towards the disruption of equalisation from which we abstract at this point.) It is the linchpin of Marx's critique of Smith and Ricardo of course that competition itself cannot determine the magnitude of the resultant average rate of profit . This is determined behind the backs of the capitalists in terms of the total value produced, less total cost price/total cost price. The macro part of Fred's method is perfectly sound. Now note what happens when we keep to Marx's definition of surplus value: total value-total cost price. I have already provided the quote. It becomes impossible to maintain that the mass of surplus value will remain the same after the inputs are transformed into prices of production and cost prices modified thereby. It becomes impossible to assume that Marx meant for there to be an invariance condition such that the same mass of surplus value will determine the sum of branch profits in both the unmodified so called value scheme and the transformed so called price scheme. What then is the meaning of the so called second equality? It means that the sum of surplus value not only has to be determined prior to but also itself determines the sum of branch profits. Once one understands the second equality in such terms, it's a matter of solving the following set of transformation equations. And here are the transformation equations for the bort-sweezy-cottrell value scheme: (1) 225x+90y+r(225x+90y)=225x+100x+50x (2) 100x+120y+r(100x+120y)=90y+120y+90y (3) 50x+90y+r(50x+90y)=r(225x+90y)+r(100x+120y)+r(50x+90y) (4) 875- (225x+100x+50x+90y+120y+90y)=r(225x+90y)+r(100x+90y)+r(50x+90y) The left hand in the 4th equation gives us the mass of surplus value (total value, less modified cost price); the right hand of this equation has the mass of branch profits set equal to it. The second equality is maintained. total value has been held invariant. solve for x, y, and r. I took a few steps via an iterative method. How would one do it with the less cumbersome method of matrix algebra? all the best, r
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