Rakesh, thanks for your reply. Do you remember how Grossmann determined prices of production? In particular, does he argue that the inputs of constant capital and variable capital have to be transformed from values to prices of production and that Marx failed to do so? Is the rate of profit determined simultaneously with prices of production, or prior to prices of production and taken as given in their determination? Thanks again. Comradely, Fred On Mon, 27 May 2002, Rakesh Bhandari wrote: > > Fred writes in 7269 > > > > > > >This is an interesting question about Grossmann and Mattick. I would > >say, yes, they understood the essential nature of capitalism as > >exploitation. But I don't think they provided satisfactory answers to the > >criticism of a logical contradiction in Marx's theory. At least not > >Mattick. I don't know about Grossmann, but I have never read anything > >about Grossmann's interpretation of prices of production. (Rakesh, can > >you help us? Is there a response to Bortkiewitz?) > > Fred, you are probably correct to differentiate your interpretation > of macro to micro from Grossmann's successive approximation method, > but Grossmann's undertanding of that method is more complex than > usually recognized. As I remember there is only footnote to > Bortkiewicz in Grossmann's wert-preis analysis and when I attempted > to translate it, I got no sense that Grossmann had understood that > criticism. But I could be wrong, and I have emailed Rick Kuhn for > comment. > > What Grossmann attempted to show through an attempt to reconstruct > Marx's method was that there was no contradiction between the vol 1 > assumption of the proportionality of value and prices and vol 3 that > values could not be proportional to prices. > > Marx did not abstract away from variance in the composition and > turnover of capital in vol 1 because he believed that variance in > the composition of capital interfered only in a minor and exceptional > way with the labor theory of value as viscosity of the medium, air > currents, surface area and myriad other factors make the actual case > of free fall in physics unpredictable. > > It may be true however that Ricardo brushed aside variance in > composition and turnover because it made things easier to think about > and Ricardo felt that this assumption only made a minor departure > from the truth which can be easily estimated and allowed for at a > closer approxmiation to reality. That is, Ricardo may have thought > that the relation between labor value and exchange ratio was strong > enough to swamp the multiple sources of complexity. > > Now Grossmann does not reconstruct Marx's method of successive > approximation in this way. For Grossmann, Marx knew from the outset > that values and prices could not be proportional but because he > wanted to isolate the capital-labor relation for intensive analysis, > he simply abstracted away from variance in composition and turnover > rather than ever assuming that uniformity was a reasonable first > approximation which could easily be corrected for at a later stage of > analysis. > > So for Grossmann Marx never thought that value price proportionality > was a reasonable first approximation; rather proportionalilty was > only a working assumption which had to be made in order to focus on > the capital-labor relationship. That assumption is then dropped at a > later stage of analysis. > > Again this is based on my reading and reconstruction. My German is > now worse than it was seven years ago. So any correction would be > appreciated. > > All the best, Rakesh > > > >
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