[OPE-L:5530] Re: Re: Re: the assumptions necessary for the two equalities to hold?

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Thu May 10 2001 - 02:05:29 EDT


re 5529

>
>
>In this case, I think Marx's assumption of the prior determination of the
>total surplus-value (in Volume 1) continues to hold.  The monopoly
>industries would get more surplus-value, but the competitive industries
>would get less.  The total surplus-value is not affected by this unequal
>distribution of surplus-value, just like the total surplus-value is not
>affected by the equal distribution of surplus-value.  This point was made
>by Paul Mattick, Sr. in his critique of Baran and Sweezy's Monopoly
>Capital back in the 1960s.  That is how I first learned about Marx's
>assumption of the prior determination of the total surplus-value (prior to
>its distribution) and about Marx's distinction between capital in general
>and competition. 
>
>I look forward to further discussion.


Fred, believe it or not, I agree with your argument about the prior 
determination of surplus value (Steve K is the one who has been your 
most important critic here). Remember you convinced me that the since 
the inputs are already in the form of prices of production they do 
not have to be transformed. What I am saying is that while indeed the 
magnitude of surplus value is determined before its distribution 
through the formation of prices of production, we cannot exactly know 
what the magnitude of that mass is. In his transformation tables, 
Marx assumes that he can exactly determine what the mass of surplus 
value is. He picks a rate of surplus value out of thin air and then 
assumes that the value transferred from the means of production is 
the same as their flow price. This allows him to calculate a mass of 
surplus value for each branch and total capital. That surplus value 
is then distributed.

The point of my inverse transformation problem is that Marx had been 
wrong to assume--as he himself underlined on p. 265--that he could 
calculate the mass of surplus value by using the flow price of the 
machine. Strictly speaking, we cannot infer the value transferred 
from machines from their flow price since value is in principle 
unobservable and not directly measurable. But this only enters an 
element of uncertainty into our estimate of what the mass of surplus 
value actually is; it does not deny that the total value surplus 
(whatever it exactly is) is a real magnitude that is determined 
before distribution, and sets the limits within which all capitals 
move.

All we can really do is infer from output price data what the total 
mass of surplus value that was determined before distribution was. We 
can then make some estimate of what the rate of surplus value was and 
thus what value was transferred gratis by the working class from the 
means of production.

Now I also accept for the purposes of argument that the inputs are in 
the form of direct prices. This is indeed not Marx's problem in vol 
3. But let's say we accept the Bortkiewicz/Sweezy problem and have to 
complete the transformation on the inputs as well as the outputs. You 
refuse to engage the critics on their own turf, but I am only doing 
so for the purposes of argument.

In this case--which is not Marx's--then I argue that only one 
invariance condition (total direct price=total price of production) 
is compatible with Marx's critique of the adding up theories of 
value; and while the second equality (total surplus value=total 
profit) can indeed be maintained in the complete transformation (this 
is most easily seen in an iterative solution to the complete 
transformation problem which again is not Marx's own), it cannnot on 
Marx's own assumptions be an invariance condition in the PROBLEM SET 
UP BY BORTKIEWICZ-SWEEZY.

Yours, Rakesh



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