John Ernst wrote: > I had written: > > > Given that we are to use an average RRI in computing prices > > of production, I'm still unclear and repeat my question. > > > > "How do you compute the values that are to be transformed from a given > > set of physical quantities?" > > ____________________ > > Ajit wrote: > > It is because computation of values from a given set of physical > quantitites has nothing to do with RRI. Cheers, ajit sinha > > My question: Ajit, are you saying that one can compute values in the > usual way and then use those values to derive a set of prices assuming > equal RRI's? If so, would we not have to know something of how much > of the value remains in the fixed capital not yet used up? ____________________________ John, my comment was regarding your first comment. As far as labor-values are concerned, they can be directly computed by the physical data, without any regard to RRI's, etc. Your second problem is about moving from values so derived to prices of production. Now let us first talk in terms of only circulating capital model, if prices of production is nothing but what classical economists called "natural" prices, then they can be easily derived from either given values or physical data--hence the redundancy of labor-values on this ground. Now, most of the marxists would like to reject the redundancy charge by arguing that the labor-value concept allows us to reveal the inner exploitative nature of the capitalist system, which remains hidden if only physical data and the natural prices are taken into account. Now, to prove this point one needs to establish some kind of relation between the labor-value accounts and the prices of production accounts. And this is the crux of the transformation problem. All such attempts that i'm aware of has one problem or the other, and to that extent the problem has not been solved. My suggestion for sometime has been that the relevance of labor-values must be sought somewhere else instead of in the theory of value and distribution. It's relevance may be found in the theory of technical change, and from there we may be able to relate it to a dynamic theory of distribution. Now, as far as fixed capital is concerned, I have not much thought about it because i think one needs to solve a logical problem in a simple model first before introducing second order complications. But in any case, I think at any time there exists some kind of understanding about what is the average economic life time of a new machine. After this we only need to assume somekind of principle of depreciation, say st. line etc., to solve for values and prices. If this is not acceptable then one should use Sraffa's joint production method, but then labor-values are not needed here. _____________ > > > I suspect I may be in *some* agreement with you on this as starting with > the usual notion of value and then transforming those values into prices > of production with a uniform RRI seems, at best, problematic. One has > to ask how useful the usual notion of value is when it comes to using > the RRI. ____________ As I said above, its relevance should be sought somewhere else. Cheers, ajit sinha > > > > Thanks, > > John > >
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