re 4698 > A variant of this that has >been floating around this list recently is the lovely >appeal-to-authority-cum-ad-hominem-attack-on-Marx launched by >Sinha: "every sensible person on this planet thinks that Marx has >a transformation problem." Hi Andrew (K), If I remember correctly, Ajit was implicitly taking issue with Sweezy's "ok" to use the unit of labor time as the unit of account in the so-called price scheme as a way of keeping the equality between the totals in the so called value and price scheme. Makoto Itoh has expressed the same criticism (Basic Theory of Capitalism, p 214--which Paul B seems to have edited). Like you (I think), I don't think there is a value and price scheme but a simple price and price of production scheme (Makoto does not find this unreasonable on p. 219). By simple or direct price, I mean prices proportional to value (P <> V). The simple (or direct) output prices in Marx's first table are already an expression of labor values * the monetary expression of labor values (MEL). Since in Marx's second table he changes neither labor values nor the MEL thereof, he keeps the equality between the totals in the simple price and price of production scheme. If we understand Marx's transformation as one from simple or direct prices (rather than values) to prices of production only for the purposes of determining how the principle of the average rate of profit modifies the form in which the law of value asserts itself, then we basically need to identify the same system in the state of simple prices and prices of production (Paul C has made this point well). So that we can see the same system in two different states, Marx then assumes that the totals of simple price and price of production will remain the same--which of course means that he is assuming a constant monetary expression of labor value. So for his own purposes not of developing a realistic price theory but demonstrating the change in the form in which the law of value asserts itself, I don't think Marx was insensible at all in assuming a constant MEL. I find misplaced Ajit's argument that the monetary expression of labor value has to be allowed to change at this point in Marx's argument-- this only muddies up the specific question; Allin seems to agree with Ajit. They are saying that Marx committed two great errors in his transformation procedure: he left the inputs unmodified and left out the unit of account (while subscribing to a commodity theory of money). By the way, I do find it persuasive (or at the very least utterly reasonable) that Marx has assumed that the cost prices in his tables are already given preconditions, which is the money which capitalists had to lay out for constant and variable capital. As you know, I do still have an objection to your and Alejandro's and Fred's interpretation at this point. Because Marx begins and constructs his first table with the assumption of P <> V, then Marx makes the error of assuming that the prices which capitalists have paid for the means of production can be equated with their value, as they are consumed and reappear in the final product. But this error does not lead to the transformation problem, and it does not sanction the use of simultaneous equation to transform the inputs and outputs into identical unit prices. So this seems to be a minor disagreement. All best, Rakesh
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