Alejandro, the responsibility for this situation is basically Sweezy's. Schumpeter eg consigned Bortkiewicz to a footnote and lauched various other sorties at the Marxian citadel. Howard and King seem to think that since Marxists were concerned with various other criticisms in many fields that Marxists were not scientific. Only because Sweezy, as a Harvard professor (the importance of which should not be underestimated in the domination of the field by his text--i only lasted a year in that rotten institution), made Bortkiewicz the center of his book did the terrain shift. Sweezy falsely thought Marx had assumed the same proportion of capital to labor across the economy in the formulation of his labor value theory of profit and price determination. Sweezy then claimed that only Bortkiewicz's methods were appropriate after that assumption was relaxed; B's set of equations do not require this assumption of a single economy wide OCC to solve for unknowns. So it was Sweezy who made Bortkiewicz arguably the greatest Marxist since Marx! There has simply been too much acceptance of Bortkiewicz's formulation of how to go about transforming the inputs; these implicit assumptions are at work in the non solutions as well. Again those two assumptions have been: (1) the inputs should be transformed into the same unit prices of production as the outputs (the anti successivist dogma which you have underlined); and (2) the idea that while the total value of the commodity output should remain a fixed magnitude, the cost prices should be modified by a transformation of the inputs from simple prices to prices of production without allowing the mass of surplus value to be modified in the opposite direction. Yet it should be perfectly obvious--though it has gone unremarked for one hundred years--that Marx himself would argue that if one is given a commodity output with a fixed magnitude of value, any increase in the cost price alone (and this is exactly and only what Bortkiewicz-Sweezy-Cottrell-Foley's complete transformation does) cannot in itself lead to rising prices, as they all have it, but rather diminished surplus value. Given a commodity output of fixed magnitude in value, a rise in paid labor obviously implies a fall in unpaid labor. It has been part of the reign of error to reason that since in Marx's own incomplete transformation applied only to the outputs he holds the mass of surplus value invariant, the mass of surplus value should then remain invariant when the procedure is "completed" by modifying cost price on a basis of the transformation of the inputs. It is obviously not possible to keep the mass of surplus value fixed if one is now going to modify the cost price of a commodity whose value and price (its monetary expression) remains constant. Upon the transformation of the inputs, surplus value has to be modified if cost price and surplus value are to remain inversely related components of total value, instead of independently determined magnitudes which are simply added up to arrive at price. Note how in the iteration which I propose every modification of cost price brought about by applying the output PV ratios on the inputs then leads immediately to an opposite modification of surplus value so that cost price and surplus value remain inversely related, resolved components of total value instead of independently determined magnitudes which are simply "added up" to yield price. One has to do it this way if one is to perform the iteration in terms of Marxian theory. The actual determinants of commodity value are the value of the consumed means of production and newly produced value. They are already given as c and (v+s) in the original tableaux which are to be transformed; the sum of the prices of production has to remain determined by this total value since at no point in the transformation procedure is the indirect and direct labor embodied in the output being changed. There is indeed this one, and only this one, invariance condition Now it is interesting that Sweezy does not settle on holding the mass of surplus value invariant because he thinks that is implied by Marx's theory of exploitation. He begins with what is close to the correct equations (4 equations, 4 unknowns) if we are going to play the simultaneist game; then he says it's simpler if we simply assume Dept III produces the unit of account which we will by fiat keep at one. This then makes the mathematical problem more tractable, for now there are only three equations, three unknowns. So it's mathematical convience that has Sweezy hold the mass of surplus value as invariant or set z at 1 in his terms. Meek would later say that the mass of surplus value has to be held invariant to keep the theory of exploitation intact. But Sweezy does not say this. (Samuelson seems to depend entirely on Sweezy and a few essays by Meek, instead of his own readings of Marx.) At any rate, Sweezy's choice has the effect of allowing prices to rise but he dismisses this as the inconsequential result of how the unit of account has been held at one. But the rate of profit is no longer the same, and he argues that this is what vitiates the labor theory of value. As I have argued, the logical slippage is earlier, and in my opinion so glaring that I am simply shocked that it has not yet been pointed out. If one wants to follow Marx and modify cost price by including the inputs in the transformation procedure and then solve in terms of a single vector of equilibrium prices, then one has to allow for the mass of surplus value to be modified in inverse direction to the modification of cost price while still having the sum of branch profits determined by this modified sum of surplus value. Any other set of equations--and I have proposed the correct set of equations on equilibrium assumptions for the first time--ensnares one in an adding up theory of price which at the very least cannot be said to be Marx's own. The mass of surplus value as an invariance condition in the complete transformation is the complete fabrication of Bortkiewicz and Sweezy; it is not possible to postulate this as derivative of Marx's own theory. It is in fact grossly antithetical to it. The confusion is so elemental and the errors in the transformation critique are so obvious that I can only interpret this as an effort to destroy Marx in a war in which non Marxists and Marxists and Ricardians have been complicit for one hundred years. But this is nothing to be wondered at, given the nature of Marx's own work: the most powerful missle ever fired at the head of the bourgeoisie. The academic critique of Marx is so grossly unfair to Marx that only a sociology of knowledge perspective will suffice in the treatment thereof. The scientistic image of that critique due to the use of high falutin algebra and Sweezy's Harvard imprimatur as proof of the critique's "veritas" are obviously key factors in the wide spread acceptance of the charge that Marx suffers from a fatal logical defect in his transformation procedure. The tragedy of course is that the much finer 1939 textbook by William J Blake was eclipsed; Sweezy claims however that his 1942 book was the only reasonably comprehensive textbook on Marxian economics available. Yet Blake's textbook had been reviewed in both Science and Science and (i believe) the top rank Journal of Political Economy (by UC Berkeley professor Carl Landauer whose two mammoth two volume study of European socialism includes an important defense of Grossmann against his critics, by the way). One can only assume that Sweezy considered Blake's textbook beneath acknowledgement. That's hard for someone like me to take since I once autodidactically learned every word of Blake's 700 page textbook. Yours, Rakesh
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