What is the question to be asked as we reach Capital 3, pp.264-65 (Vintage)? The economists, radical, Marxist and neo classical alike ask: Can a "value scheme" be transformed into a complete "price of production scheme", inputs and outputs included, while stipulating three invariance conditions: total value=total price, the value rate of profit=the price rate of profit and the sum of surplus value=the price sum of profits? Or Marx himself asked: How would the modification of cost price upon the transformation of the inputs from simple money prices to prices of production change the available mass of surplus value which is distributed in the form of a uniform rate of profit and thus compel correction of the initial determination of the output prices of production in terms of a profit rate now calculated on the basis of the modified sum of surplus/ the modified cost prices? As I have argued, the first question could never have been formulated by Marx: Marx would not have thought that one can keep total value or price (its monetary expression) as a fixed magnitude and change costs by "transforming the inputs" without changing surplus value in the opposite direction. That the upward modification of cost prices yielded by the Bortkiewicz-Sweezy transformation of the inputs implies that the mass of surplus value has to be reduced, i.e., not remain invariant, is exactly what the labor theory of value implies. After all, the reduction in the mass of surplus value only means capitalists cannot escape the pressure of increased costs (here brought about a change in the prices of the inputs in the "complete" transformation examples ) simply by adding on to these upwardly modified cost prices the old mass of surplus value and having final prices thus rise even as the value of that output does not itself rise. If this were possible, then capitalism would truly not be characterized by class conflict. Smith would be correct and Ricardo wrong, and Marx would have been wrong to sniff around in Ricardo's system for a correct theory of surplus value and class conflict. Only if capitalists could deal with upwardly modified cost prices in the manner these "solutions" do! Raising total price until the mass of surplus value remains the same despite rising costs! Indeed... The central question of technical Marxist economics for the last one hundred years is not even one which can be formulated out of Marx's own theory, properly understood. The idea that the first question is Marx's own arises out of "experts" reading commentary on Sweezy's reading of Bortkiewicz, instead of reading Marx. The reign of error has to come to an end. Yours, Rakesh
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