From: Rakesh Bhandari (rakeshb@STANFORD.EDU)
Date: Tue Jun 01 2004 - 04:37:22 EDT
> >_________________ >But Rakesh! You have forgotten to tell us what is >"value", which is the unknown in the system. We need >to know what is this animal called "value", which is >the unknown in the system, and what kind of a system >is this? SNALT labor time. Surplus value is unpaid labor time; surplus value contains profit, rent, interest. >____________________ >That >> is the mistake >> that Marx is claiming that he made in his >> transformation tables. By >> assuming that price was proportional to value, he >> assumed that he >> could determine from visible flow price data the >> value transferred; >> moreover, since wage goods could have sold above or >> below value, he >> had no way of knowing about much actual labor power >> the money wage >> could actually buy. >___________________ > >But how would you know whether something is above or >below value without knowing where is value? Well yes this is the question. How is Marx's theory of value to be verified or confirmed? How is the retroduction (Bhaskar) to value relations to be validated? But Marx already answered that. He not only deduced that value relations had to be expresed through exchange value and that he therefore had to work out the mediations of that expression, he was also able to explain the laws of motion on the basis of his mediated theory of value. For example the very fact that capitalists are momentarily rewarded for introducing and forcing upon others technical changes that reduce the average rate of profit is explained exactly as the result of the mediations in and through which value is expressed. Marx's deduction is sounder than Bohm Bawerk's (only if there is a common substance is it likely that exchange ratios would have some stability; general use value is not a good candidate on simple logical grounds as abstract labor--see Hilferding, Boudin, William J Blake, Carchedi); Marx's deduction is retroactively validated (Postone) by the real relations that he able to lay bare on the basis thereof. Which includes intertemporal change in exchange ratios, as Shaikh and others have argued. So the answer to my questions: the same way that Eddington confirmed Einstein. Marx is validated by the real tendencies that he was able to explain and predict--concentration, centralization, general crises, structural limits to working class advance, eventual working class retrogression, the breakdown of capitalist fraternity. Wassily Leontief realized the towering superiority of Marx over all rivals. Marx was ahead of his time; he was ahead of Menger's and Bohm Bawerk's and Bernstein's and Tugan's time. Grossmann understood Marx in his timeliness. Marx had not been understood until that point for good materialist reasons. Even when Edward Wolff today explains the US profit spike in terms of new low OCC branches, he is operating within Grossman's framework. Grossman provides in one unified theory an explanation of why these new branches could have increased general profitability. On your particular point: first, it is not a question of knowing. It is a question of why Marx's theory of surplus value is in fact invalidated by the formation of an average rate of profit even with inter and intra branch variance in the composition of capital. Marx explains the seeming incompatibility. YOu think the explanation is vitiated by the transformation problem; I insist that Marx never admitted to having failed to complete the transformation of the inputs from values or simple prices to prices of production. Alejandro Ramos and Fred Moseley are right about that. Marx's imprimatur to this so called problem has been invented and repeated ad nauseum for more than 100years. Marx never said that this is what was wrong with his own transformation tables (but he did say something was wrong--here I disagree with Fred and Alejandro but everyone from Bortkiewicz to Samuelson to Sinha has not understood what Marx said his actual mistake was, but I have explained it to you:)). This traditional transformation problem was invented by those who wanted to apply simultaneous equations to Marx's theory. Now back to verification: Grossmann argued that Marx's theory was supported by imperial attempts to control trade with colonies in which the OCC was low because this had the effect of raising the average rate of profit in the imperialist country. So Marx's theory was able to explain imperial virulence even as capitalism was supposed to realize as the revisionists and Schumpeter thought a Kantian perpetual peace. Marx makes a hypothesis about how value is distributed. And that hypothesis can then explain why low OCC branches may have raised the rate of profit and why imperialism can become more violent even in late stages of accumulation. What more do you want? Arguments over which invariance condition to maintain in a complete transformation which yields something of no real interest--equilibrium prices. Logic chopping over that is like logic chopping over angels on a needle. Which is how the post Samuelson and Steedman debates in Marxian value theory seem to almost everyone! > >____________________ >Rakesh, do you really understand what you are saying? >And I'm serious here. >____________________ Please specify what you do not understand. > >__________________ >So what are the other determinants? >_________________________ >> quantity of unpaid labor time appropriated at least in Carchedi's sequential theory. > >__________________ > >But I had just said that Sraffa never said that prices >in time (t-1) are the same as prices in time t. All he >is saying is that the rate of profits is determined on >the replacement costs of the used up capital. What is >wrong about it? Cheers, ajit sinha Well the rate of profit could be calculated that way; it could also be calculated in terms of the historic costs of capital.
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