Marx used it to "collectivise" surplus before undertaking the transformation, Rakesh. That, to my mind, is a kludge. As for your arithmetic, if you want to get my interest and undertake the intellectual task to which you seem to aspire, restate your entire system as a set of ordinary differential equations, and then I will take an interest. Steve At 10:11 AM 10/30/2000 -0800, you wrote: >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 > > > > > > > > > > > > > > > Dr. Steve Keen Senior Lecturer Economics & Finance University of Western Sydney Macarthur Building 11 Room 30, Goldsmith Avenue, Campbelltown PO Box 555 Campbelltown NSW 2560 Australia s.keen@uws.edu.au 61 2 4620-3016 Fax 61 2 4626-6683 Home 02 9558-8018 Mobile 0409 716 088 Home Page: http://bus.macarthur.uws.edu.au/steve-keen/
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