Allin, Duncan and others, Why no response to the simplest of my points: Assuming a constant value of money and thus monetary expression of labor value, it cannot be allowed in Marxian theory that an increase in the costs of production of total commodity output whose value remains unchanged results in rising prices (of course relative prices may change; maybe even total prices will decrease if one follows Ricardo, but they cannot increase). Since the completed transformation exercise aims to transform only the input prices, that is modify COST prices, while leaving the total value of the commodity input and output unchanged--these after are the conditions of the problem--the total output price cannot be allowed to change (assuming a constant monetary expression of labor value), meaning therefore that the mass of surplus value has to be modified in the opposite direction of cost price. There is nothing other than surplus value to give upon the modification of cost price if total price cannot change. If costs increase while prices remain constant, then what other than surplus value is there to give? If C (output commodity value) remains constant as well as the monetary expression of labor value, it is simply not possible for an increase in costs (and the Bortkiewicz transformation of the inputs does nothing else to the inputs than change their price) to issue in greater values or higher prices on the assumption of a constant monetary expression of value. This equation is therefore simply not possible. (k + a) + s => C + a Cost price has nothing to do with the formation of commodity value--Marx could not be more explicit--so the modification of costs, without any underlying change in the value of the inputs which of course is ruled out by assumption in the transformatin exercise, cannot have any effect on commodity value or its price (which is the monetary expression of commodity value, assumed to be constant in the course of analysis). In terms of Marx's theory (here dependent on Ricardo's critique of Smith's adding up theory of price), it is only possible that if the value of the output as well as the monetary expression of labor time remains constant, any change in cost price results in the opposite change in surplus value: C=> (k+a) + (s-a) Will someone please explain to me how it has been thought possible for the last 100 years that surplus value could remain invariant as the cost prices for an output whose value and price (as the monetary expression of that value) are assumed to remain constant are modified by the transformation of the inputs? Of course surplus value has to be modified, instead of held invariant: THE MASS OF SURPLUS VALUE WILL NOW BE THE INVARIANT TOTAL VALUE OR PRICE (WHICH AGAIN IS THE MONETARY EXPRESSION OF VALUE), LESS THE MODIFIED COST PRICES OR THE MODIFIED **PAID** (INDIRECT AND DIRECT) LABOR. BUT THIS ALSO MEANS THAT SURPLUS VALUE STILL DERIVES ENTIRELY FROM *UNPAID* NEWLY PRODUCED VALUE BY LABOR. THERE IS THUS NOT A CHINK IN MARX'S EXPLOITATION THEORY. MY INTERPRETATION DOES NOT WEAKEN IN THE LEAST THE MARXIST THESIS THAT APPROPRIATED PROFIT ORIGINATES IN UNPAID LABOR. In the terms of bourgeois equilibrium theory, the transformation problem should always have been focused on whether it is possible to modify the cost prices in such a way that the resultant modified sum of surplus value still equals the sum of branch profits while inputs and outputs both have the form of prices of production. This is no mere tautology or definitional trick (WHICH IS ALLIN'S ONLY SUBSTANTIVE CRITICISM OF MY CORRECT USE OF MARX'S CONCEPTS) because it is not immediately obvious that such a problem has a solution (it turns out the equations do not overdetermine the system) and the substantive changes caused by my transformation set of equations are also non obvious (the average rate of profit and relative prices of production do change). In fact the 4 equations which I propose are harder to solve than Sweezy's since in his 3 equations one unknown and one equation are removed by arbitrarily stipulating that the mass of surplus value remain invariant. In my opinion, the second great error of the transformation debate has been the postulation of surplus value as invariant; the first one of course is the absurd idea that because the inputs have to be transformed into the *form* of prices of production, they should be transformed via the use of simultaneous equations on the basis of data from one period of production alone into the quantitatively identical unit prices of production of the outputs. Such a stricture simply kills time, sequence, dynamics and has our gaze turned on a purely imaginary self-replicating system. all the best, Rakesh
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