re Allin's 4570:
>On Thu, 23 Nov 2000, Rakesh Narpat Bhandari wrote:
>
>> You said that surplus value, defined as total value minus the value
>> of the inputs, would not be equal to the sum of profits in the final
>> modified scheme.
>>
>> I then showed that your definition of surplus value could not be
>> Marx's for it leads to an adding up theory of price.
>
>This is paradoxical. How can a definition on which surplus
>value is explicitly a residual lead to an "adding up" theory?
>
>Allin C.
Because you do not accept Marx's definition of surplus value as the
residual once the cost price has been taken from total price, that is
dM as M' minus M. You define surplus value as the residual after the
value of the inputs has been taken from the value of the output.
As I wrote in my 4559 (just slightly amended):
Given your definition of surplus value as the value of the output
minus the value of the inputs, surplus value and cost price cannot
remain resolved, antagonistic components of total value but rather
become (at least partially) independently determined magnitudes. You
have glossed over my criticism.
Ricardo allowed for the possibility of the price of wage goods rising
due not only to their increased value as greater outlays of labor are
needed for agricultural produce with the increasing cultivation of
inferior lands but also to rising ground rent payments.
Now as long as we are assuming that total value and the value of
money remain constant, you would allow surplus value to be
diminished only by the rise in the value of wage goods, not the rise
in ground rent as well. To this only partially diminished surplus
value you would then add on the increased cost price.
So if we stick to your definition of surplus value--total value minus
the value of the inputs--the sum of your (only partially modified)
surplus value and (raised) cost price would in the classic Ricardian
case no longer be the total price, as determined as the product of
the value of the output and the monetary expression of labor value
both of which we are assuming to be constant. You are led to break
the labor theory of value here.
If we have price determined by your sum, then a rise in cost alone
has not lead to diminished surplus value alone but rather to
partially higher prices. That is, your definition leads you to accept
Smith's adding up theory of price. This is grossly antithetical to
Marx's theory. Your definition of surplus value cannot be accepted as
Marx's. Moreover, your textual support is weak.
However, once we accept the definition of surplus as total value or
price minus cost price itself, it becomes obvious that any
modification of cost price--whether it results from the rising value
of the input wage goods or increased ground rent or the *price*
transformation of the inputs--implies an inverse change in the mass
of surplus value as long as we are taking the value of the output and
the value of money to be fixed magnitudes (which is exactly what
Sweezy inititally did before he decided it was too mathematically
complicated a problem).
Once we accept the challenge of transforming the inputs in terms of
a vector of equilibrium prices--which I am only doing for the
purposes of argument--we have a more complicated problem at hand than
B-S-M realized. The problem now is to have the mass of surplus value
modified in inverse direction to the modification of cost price
consequent upon the transormation of the inputs while at the same
time having the sum of Dept profits determined by this (modified)
mass of surplus value. If this can be done, then the second equality
can be preserved. The first equality is already given by stipulation.
This also means that there is no way to reduce the set of equations
to three with three unknowns, as Sweezy had hoped for the purposes
of mathematical tractability. I am happy to find however that the
four equations which I propose are happily neither over- nor
under-determined.
I will stick to the assumption of simple reproduction.
I argue that it follows from Marxian theory that once the value and
the price of the total output are given, it is basic theorem of
Ricardian-Marxian 'economics" that the difference between the
modified cost price and the unmodified cost price is equal to the
difference between the sum of the unmodified surplus value and the
modified sum of surplus value.
VALUES
I c1 + v1 + s1 = c1 + c2 + c3 or C
II c2 + v2 + s2 = v1 + v2 + v3 or V
III.c3 + v3 + s3 = s1 + s2 + s3 or S
IV (C+ V +S) - (C + V) = S
PRICES OF PRODUCTION
V c1x + v1y + r(c1x + v1y) = c1x + c2x + c3x or Cx
VI c2x + v2y + r(c2x + v2y) = v1y + v2y + v3y or Vy
VII.c3x + v3y + r(c3x + v3y) = r(c1x + v1y) + r(c2x + v2y) + r(c3x + v3y)
VIII.(C + V + S) - (Cx + Vy) = r(Cx + Cy)
Equations IV and VIII defines the sum of surplus value as total price
which is being held invariant minus cost price; this then the
determines the sum of profits, which is given on the right hand side.
This set of transforamtion equations thus has the second equality
built into them while the the so called first equality is given by
stipulation.
If this set of equations can be solved, then Marx's transformation
procedure does not break down upon inclusion of the inputs even if we
are assuming the burden of having to solve in terms of simple
reproduction.
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