Paul C wrote in 4524 > >I dont see how you simultaneously hold selling prices fixed, whilst >cost prices change. Not holding *relative* selling prices fixed. > >Surely the cost prices have only changed because the commodities >have been sold at a different price? Right. > >Whether prices of the aggregate output should change is a quite >different question. If denominated in gold, one should expect them >to change if the exchange value of gold changes in the transformation >process. If one is using paper money as ones unit of account, >then one simply renormalises to compensate for changes in the >value of money - since the exchange value of the unit of paper currency is >external to the theory. Use the unit of labor time as the unit of account--Sweezy grants this is a perfectly plausible option (p.122). Then since we are not changing the total value at any point in the transformation, the simple prices in the unmodified scheme will equal the sum of production prices in the modified scheme. We have the invariance condition, and the four equations which I propose can be solved. Moreover, proceeding this way allows us to see clearly the point of the exercise--the divergence of relative prices in the modified scheme from relative "values" in the unmodified scheme brought about by the equalisation of the profit rate. Yours, Rakesh
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