Fred's criticism does not apply to my set of transformation equations which I have proposed to solve the problem which Bortkiewicz and Sweezy put to Marx's theory. Again it seems clear to me that the problem to which Marx was admitting was not the inputs are in the form of values or direct prices (on this I agree with Fred and Alejandro) but rather that he had mistakenly assumed that value transferred from the means of production was exactly equal to the flow price of the machine as visible in the transformation tables. The more profound mistake to which Marx is confessing on that famous p. 265 is that in his construction of the tableaux he had thus treated value as if it were in principle observable and directly measurable. But this simply cannot be since in a private enterprise economy labor time relations are necessarily expressed in (and hidden by) fetishistic price categories. As is probably clear to the participants here, my interpretation makes sense of Fred & Alejandro's evidence that for Marx the cost prices are already a given precondition in monetary form as well Allin's evidence of Marx's own recognition of a problem of double divergence. But neither side has yet thanked me for providing an interpretation in which each side's strong points are recognized, Oh well, boo hoo. At any rate, even if one accepts that the inputs are in the form of direct prices (though Alejandro, Fred and Mattick jr are correct that this is a misinterpretation), the transformation can be solved as long as one uses the correct definition of surplus value--Duncan has called my definition a "phenomological" one off list. So far Allin has accused me of preserving the second equality (sum of surplus value=sum of profits) by means of a definitional "trick" and a "corrupted" translation. The only problem with these heavy charges has been that the textual evidence which Allin himself presented defined terms exactly as I have. Moreover, I have shown that Allin's own definition of surplus value as the residual once the value of the inputs has been taken from the value of the output cannot have been Marx's own since it cannot fend off an adding up theory of price. As far as I can tell, Allin has never responded to this point. In fact, his only reply to this point has been to say that my definition of surplus value is even worse! For it is obvious that once surplus value is the residual I say it is on the basis of Marx's corrupted and uncorrupted quotations, then any modification of the cost prices on the basis of a price transformation of the inputs implies an inverse modification of the sum of surplus value. It then turns out to have been absurd that anyone could have thought there should be two invariance conditions in the transformation exercise or that two invariance conditions are needed to preserve both equalities. Sweezy himself recognized that it was perfectly legitimate to choose the other invariance condition (total direct price=total price of production) while maintaining the value of money as constant. And much like Winternitz this is what I have proposed (who was Winternitz?). Allin and Andrew then argued that my approach had an obvious problem. It would be possible if, c.b., the input prices of means of production were to be reduced by the transformation below their value that the sole source of surplus value would no longer be the newly added value by live labor. So the criticism shifted here from the charge that I could not maintain the second equality (which I do after all by the trick of using Marx's own definitions) to the charge that I would undermine the exploitation theory of surplus value. However, even in this freak case there is no damage to the exploitation theory of surplus value, for the additional surplus value in this practically irrelevant case derives entirely from live labor transferring *gratis* the value of the inputs to the outputs. Even in those cases where inputs can be bought below value, live labor remains the sole source of surplus value. There is clear sign of the unscientific nature of the transformation problem debate that participants do not feel compelled to provide clear definition of surplus value or clear formulas for the determination and resolution of value. This allows for endless disputation. (1) def of sv: total value, as monetarily expressed, minus cost price (2) det of v: Lmp + Lc => value (3) res of v: value (as monetarily expressed) => k + s => means determination. Fred however has clearly laid out his formula for value determination. He, along with Alan F, base their of definition of constant capital on a quote from TSVIII; I then reminded Fred that the very next line of that quote--which of course announces Allin's problem of double divergence--makes impossible the definition Fred and Alan have derived from this quote (and unfortunately for Alejandro there is no discussion of a capital of average composition in this section). There has not yet been a persuasive reply to Allin's and my later criticism. Or even an attempt to account for why the very next line of that quote can't be squared with the interpretation Fred and Alan F make of it. Marx's expression for the determination of value is clearly captured in eq 2 above. On this Allin and I agree, I think. It's absolutely horrible that in attempting to defend Marx's theory one has to beome immersed in scholastic disputation over definitions. But unless one has a clear set of definitions and formulas as above--and then defends them textually and theoretically--there is no point in either critiquing or defending Marx especially in regards to the transformation problem. Yours, Rakesh
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