>Hi Rakesh! > >1. Do you have a brief presentation of your "inverse transformation >interpretation"? Alejandro, Fred argues that the mistake that Marx was pointing to on p. 265, Capital 3 is the false assumption that the cost price of the commodities is proportional to their value (P<>V). Fred says that Marx was trying to ensure that readers did not continue to assume this; but then Fred also argues that after underlining the disproportionality between the cost price of commodities and the value of the inputs, Marx does not admit to any mistakes in the transformation tables that he had constructed earlier in the chapter. The tables are fine as they are; there is no reason to complete or correct them, according to Fred. Just don't assume the value of the inputs is proportional to the cost price. Marx is just trying to free us from mental error; he's not pointing to any mistakes or incompleteness in his own tables. I disagree but not for the traditional reason. I am arguing that Marx is himself underlining a mistake in his own tables. The problem is not that the inputs are in the form of values of simple/direct prices and need to be transformed along with the outputs into identical prices of production--the standard interpretation your and Fred's critique of which I accept! The problem however is that in the tables Marx had assumed that the value transferred from the means of production is the same as the flow *price* of the machine, which Marx records in the consumed c column of his tables. But upon completion of his tables Marx has shown why the price of production of the outputs has to be disproportional to their values. Well this implies a second reason for divergence since the values of the inputs should not now be identified with their price, but in determining the value transferred from the means of production in his transformation table Marx had indeed assumed that the value transferred can be identified with cost price of the used up means of production. He was wrong to make that assumption, and this is what I am calling the inverse transformation problem. Strictly speaking then we do not know how much value was transferred as a result of using up the means of production and thus we do not know the value of the respective commodities. The hiding of labor time relations after all is inherent in fetishistic price form. Marx does not think this error is of great import because whatever the value of the used up means of production and thus the value transferred to the output, the output will have greater value (as monetarily expressed) than the cost price of the commodities, and that total mass of surplus value will still tend to proportioned according to the capital advanced. Marx's admission of an inverse transformation problem--viz., his own faulty assumption built into his transformation table that we can identify the value transferred from the means of production with their visible flow price or cost price--changes nothing about the mechanics of how, formally speaking, the average rate of profit is formed out of the collective exploitation of the working class by the collective of capitalists. So quite correctly Marx does not bother with fixing the tables because they have served their purpose quite well. Marx has shown that not only does the formation of an average rate of profit not contradict the law of value, its magnitude can only be explained on the basis thereof. And strictly speaking Marx could not fix the tables, anyway, as it is impossible to know beneath the fetishistic price form what the real value of the used up means of production was and thus how much value was transferred from them to the commodity output in the respective branches. There is the same problem in how Marx posits the rate of exploitation. Let us say that when Marx wrote up the tables he made the assumption that each wage good allows the capitalist to extract labor time of twice the value of the wage good. That is, Marx makes the assumption of a rate of exploitation of 100%. But now we know that wage goods could have above value, which means that Marx has overestimated the rate of exploitation in his tables. Or wage goods may have sold below value, which means that Marx has underestimated the rate of exploitation. Well I'll leave it here for now, and get to the problem of double divergence. I am arguin for the inverse transformation interpretation because it makes sense of double divergence and shows why and how Marx had gone wrong in constructing his tables. That is, I am arguing that my interpretation gives a more persuasive reading of p. 265 than Fred's interpretation allows. rakesh
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