re Fred's 7268 >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? Well, It remains my impression that Grossmann had not understood Bortkiewicz's critique. Two things though. 1. Because Grossmann assumes that the value of all commodities is expressed in terms of a money commodity the value of which is fixed in order to ensure for purely methodological reasons that all changes in exchange value happen on the commodity side of the equation, I think Grossmann would have thought that the first transformation table is in simple prices rather than values (just as Shaikh and Gouverneur do); moreover, since the money commodity has a fixed value by methodological fiat and the labor value of the output must be unchanged by the mere redistribution of value through the formation of prices of production, the sum of the prices of production will have to be the same the sum of the simple prices. That is, I believe that Grossmann would have made the same choice of invariance condition as Winternitz and Gouverneur. And for the same reason. 2. However, it is hard for me to believe that Grossmann would have thought it was reasonable for the technical conditions to remain constant for the 40 or periods of iterations which it takes to arrive at equilibrium prices of production. Grossmann's thinking seems too dynamic for that. >Is the rate of profit determined simultaneously with prices of production, >or prior to prices of production and taken as given in their >determination? I think the latter. As far as I know Grossmann did not even understand that relative prices and the rate of profit can be determined simultaneously on the basis of certain conditions. AComradely, Rakesh
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