re 4616 >On Tue, 5 Dec 2000, Rakesh Narpat Bhandari wrote: > >> Marx is not allowing the value of money to change before the >> transformation; and he doesn't allow it to change in the >> transformation. >[snip] >> Marx does not think that there is actually an invariable standard >> of value. This is why he has to invent the constant reference point, >> fully aware that it is a purely fictitious assumption. > >Rakesh, you haven't taken on board Ajit's point. There are >theroretical situations where it's OK to make the "fictitious >assumption" that the value of money is constant, and other >situations where this assumption just doesn't make sense (at any >rate, without recognizing and spelling out the further >commitments this assumption entails). > >Thus at the level of Vol. 1, when Marx is talking about the >prices of commodities changing due to changes in technical >conditions (with prices = values), it's perfectly OK to assume >that the value of money isn't changing at the same time (this is >just saying that there's no technical change in gold production, >that the labour time required to produce an ounce of gold remains constant). Allin, There is every possibility that I am missing the point; all the subtleties and curiosities of a measure of value and a hypothesized invariable measure of value are quite perplexing, and will certainly take a sharper mind than mine to analyze. As HG has it, Marx is saying that (1) the variability of the measure of value, or of money, is only one of the causes of price changes. Such changes can just as well stem from causes that lie on the commodity side of the exchange relationship. And of these latter changes, one can be the consequence of (2a) actual change in value (the case in which Marx is initially interested) and the other (2b) can stem from imbalances in supply and demand. It seems that we are all agreed that Marx is ruling out 1 and 2b in vol 1. > > >When you're talking about the transformation, however, a >constant "value of money" in the above sense is insufficient to >ensure that the aggregate price of commodities remains constant. >You need money to be invariant in a stronger sense: namely, that >it's immune to the transformation. This can't just be "assumed" >without cost: it would require that the money commodity is >produced under conditions of average organic composition (or >something of the sort), thus confining any results obtained to a >special case. Well, to use Ajit's language, it all depends on what Marx's problematic in Capital 3, ch 9. is. Marx's second tableau (p. 256) obviously shows, as Gouverneur has pointed out, that in his own transformation procedure Marx holds not only the total value of the output but also the value of money constant; otherwise he could not have equated the sum of simple prices which is total value * monetary expression of labor value in the first tableau with the sum of prices of production in the second tableau. Marx has to be assuming the invariance of m (Gouverneur uses E) or he could not have set the two sums of price equal to each other. Now if Marx's "problematic" here had been to demonstrate that prices should remain invariant in the face of distributional shifts, we could say that he has begged the question. If Marx's problematic had been to provide a determinate price theory, we could say that his attempt has foundered by ruling out changes in the medium in which price has expressed. But since Marx's problematic here is only to provide at the most abstract level an analysis of how the law of value cannot govern bourgeois society directly but rather only in the very form which seems to contradict it, it seems to me that it is perfectly fine for him to ignore the complex and curious effects on relative and even total prices the inclusion of the money commodity into the transformation procedure would have. Marx is not interested in determining prices here but resolving the Ricardo/Malthus debate on whether the principle of the average rate of profit modifies or contradicts the law of value. That is the "problematic" in the analysis of which it remains legitimate to hold the value of money constant. Yours, Rakesh
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