From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Fri Jan 27 2006 - 12:36:48 EST
Ian, I accept Fred's and Alejandro's argument that the inputs are already in the form of market prices, givens which cannot be retrospectively transformed. However, I have further argued that the transformation problem is one of going from the prices of inputs to the value of the used up means of production and the rate of surplus value. In other words, I have said that for one hundred years Marxist criticism has got Marx's admission of a mistake exactly ass backwards. However if one accepts the traditional transformation problem I think Shaikh's and Gouverneur's solution is quite alright (that is, I would keep total value=total price and the MEL constant in the fixed point iteration), though I would said that with each iteration the mass of surplus value changes since Marx defines surplus value as total price minus total cost price (that is, M' minus M). With each iteration the cost price changes so must the mass of surplus value. This does no damage to the labor theory of value in that it is still easy to interpret the iteration as one in which all new value is the result of living labor alone, though the mass of surplus value may seem either larger or smaller than in the initial situation. At any rate, the change is only nominal. >Hi Rakesh > >> In other words, value as simple price is a magnitude of no real >> importance. Just as for the purposes of the pension system the so >> called real age is not important. In fact value as simple price is of >> much less importance that total value and total surplus value. > >OK. > >How do you determine the value of money? Drawing from Naples, I have argued money is unlike most reproducible commodities. The average rate of profit tends not to achieved in this sector. And the purchasing power of the money commodity is given not by its price of production but by the socially necessary labor time required to reproduce it. However for most commodities this is not what happens. There is confusion in our understanding of value. By value of a commodity do we mean the amount of abstract labor time it represents or do we mean the amount of abstract labor time it requires to produce a commodity. I argue that value means the former, and that for most commodities its value is given by the price of production multiplied by the value of money. This does not discount the importance of labor time required for production but it makes its influence mediated in a complex way. Yours, Rakesh > >Do you think Marx was right to try and quantitatively match value >accounting and price accounting in order to demonstrate that the law >of value did not contradict the law of uniform profit? > >Of the three kinds of reaction to the TP I mentioned -- (i) deny a >premiss, (ii) drop a price-value conservation claim, (iii) change >Marx's value theory -- where would you situate your: > >> In bourgeois society, the value of a commodity is its price of production >> multiplied by the value of money. > >As I said, I think this is the right direction to go. But there are >obstacles in the way. How are you getting around these obstacles? > >Best, > >-Ian.
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