From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Tue Dec 10 2002 - 12:36:26 EST
Andrew B writes in 8152 >Dear Paul C and all, > >Though I have not the time to study the argument in great detail I >very much appreciated Paul's theoretical explanation of why prices >and labour times are closely correlated [8111]. > >This explanation seems potentialy to be an important contribution >to the debate on the transformation problem despite Paul's >boredom with that literature. It is well known though not by me and a few other people on this list. I shall just rework a few old posts to register my disagreement with this hoary idea. >that in Vol 3, ch.9 >Marx's initial discussion does not transform the inputs. If they are already transformed, e.g., the sum of money invested as constant capital is already determined by k+(r)k of the means of production, why do the inputs have to be transformed? Marx never admitted to the need for the inputs to be transformed. After he completes his transformation tables and recognizes price-value disparity, Marx realizes that he had mistakenly inferred the value transferred gratis by workers from the means of production from the cost price of the used-up means of production. But there is an inverse transformation problem as Marx himself recognizes (Seton and Samuelson both had recognized the possibility of this interpretation)-- that is, it is in principle not possible to determine the value transferred from the flow price data in each branch because the price of the input means of production diverges from their value. As Carchedi, Alejandro Ramos Martinez and Fred M. have repeatedly emphasized, Marx is never denying that in his transformation tables he began with the money sum which had been invested as constant and variable capital; he is only underlining that those goods had to have sold at prices gravitating around their respective prices of production, not their values. Which gives no reason to extend the transformation from values to prices to the inputs. But it does give us reason to question what the value of the used up means of production actually was and thus the value which workers transferred gratis to the commodity output. Moreover, Marx is saying that while he assumed in his transformation tables that the rate of exploitation is 100%, it may have been less once we recognize that the price of production of wage goods could have been greater than their value or the rate of exploitation may have been greater if the price of production of the wage goods had been less than their value. In other words, if the prices of wage goods had exceeded their value, then the given sum of variable capital allowed for the purchase of fewer labor hours and s/v had to have been lower than Marx assumed; and if the price of production of wage goods had been less than their value, then the given sum of variable capital which is represented in the cost prices would have allowed capital to purchase more labor hours and thus enjoy a higher s/v than is represented in the transformation tables. What Marx is emphasizing is not that the wage good "inputs" should be transformed from values to prices (they could only have been bought at their respective prices, and their prices--we know realize--had to have gravitated around their prices of production). However, to the extent that Marx had assumed the rate of exploitation is 100% on the condition wage goods sell at value (that is, the value of wage goods in the subsistence basket is one half labor time performed) he now has to correct the uniform 100% s/v rate which is simply posited in his tables and thus the entries in the s column because wage goods could not have had sold at their value. But Marx's point is that whatever the actual transferred from the means of production and the new surplus value produced in each branch, the value of the commodities will be greater than their cost price and the resulting surplus value will tend to be distributed according to the rule of a uniform profit rate the level of which is thus explainable on the basis of the law of value. Marx is only interested to show in bare outline the bare mechanics of the indirect operation of the law of value. Which of course may be redundant if the uniform rate of profit can be determined on the basis of physical quantities, but this is a more important criticism of Marx than the idea that he failed to transform the inputs. Marx himself never admitted to any such thing. That is not the mistake which he is laying bare in Capital 3, p. 265. Bortkiewicz read Marx incorrectly, Sweezy accepted the mis-reading, Sweezy's text has been hegemonic. Again: Marx underlined that the assumptions in his transformation tables about the value transferred and s/v did not hold once he recognized price-value divergence. But this does not imply any need to complete the transformation of the inputs from values into prices of production; one simply has to realize that the value magnitudes are only represented through, albeit hidden by, the fetishistic price form, and it is not possible to know what those value magnitudes are beforehand. Consequently, one cannot legitimately move as Marx did step-by-step, from left to right (cost price, s/v, s, commodity value) in his transformation tables. In fact one can never know the value transferred or s/v but only infer them from the fetishistic price data of both the inputs and outputs. The mistake in his transformation tables to which Marx was admitting was simply having initially treated value transferred, the rate of exploitation and the value added as if they were on the same phenomenal level as the money sums invested as constant and variable capital. In fact we can only begin to get a handle on these three factors (value transferred, s/v, v+s) after we have the price data for both the inputs and the outputs, and even then it would hardly be easy (or interesting) to determine the actual value transferred in each branch and the precise value of the commodity output of each branch. There are two dogmas to the transformation problem--that the inputs have to be transformed from values into prices of production and that it's theoretically interesting to transform inputs and outputs into the same prices of production. Shaikh accepts these two "strictures" (wrongly in my opinion), but still brilliantly vindicates Marx's transformation procedure. > In my view, >Alfredo has demonstrated this is a valid procedure given Marx's >OCC / VCC distinction. Whatever one's view of that distinction, I >think Paul C's argument might just turn out to further back up the >validity of Marx's procedure and also explain Marx's comments >when Marx does (briefly) come to consider the transformation of >the inputs. Marx first recognises this key issue with the following >paragraph in ch.9, Vol.3: > >--------------- >But the difference is this: Aside from the fact that the price of a >particular product, let us say that of capital B, differs from its value >because the surplus-value realised in B may be greater or smaller >than the profit added to the price of the products of B, the same >circumstance applies also to those commodities which form the >constant part of capital B, and indirectly also its variable part, as >the labourers’ necessities of life. So far as the constant portion is >concerned, it is itself equal to the cost-price plus the surplus-value, >here therefore equal to cost-price plus profit, and this profit may >again be greater or smaller than the surplus value for which it >stands. As for the variable capital, the average daily wage is indeed >always equal to the value produced in the number of hours the >labourer must work to produce the necessities of life. But this >number of hours is in its turn obscured by the deviation of the >prices of production of the necessities of life from their values. >However, this always resolves itself to one commodity receiving too >little of the surplus value while another receives too much, so that >the deviations from the value which are embodied in the prices of >production compensate one another. Under capitalist production, >the general law acts as the prevailing tendency only in a very >complicated and approximate manner, as a never ascertainable >average of ceaseless fluctuations. >--------------------------- > > >I wonder if Marx's argument here is expressing Paul's point that, >given the law of large numbers, the transformation of the inputs is >likely to leave both total wages and total constant capital costs, >hence total costs, very close to labour times? If so this would only >reinforce the point that abstracting from the transformation of the >inputs is inessential to Marx's procedure. > >However, I presume I am barking up the wrong tree totally since the >literature is so vast and I know very little of it -- if so apologies. > >Andy >
This archive was generated by hypermail 2.1.5 : Wed Dec 11 2002 - 00:00:01 EST