From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Wed May 31 2006 - 13:10:02 EDT
Fred Moseley wrote: "These two aggregate equalities are not conditional equalities, that may or may not be true, depending on the compositions of capital of individual industries (as in the standard interpretation of Marx's theory), but are instead identities, that are always true, by assumption, or by the nature of Marx's logical method - the determination of the total surplus-value prior to its distribution." Fred's description has got to be correct basically, but I would say that the two aggregate equalities are true "by assumption", specifically a modelling assumption made to understand a complex reality. Lateron both Marx and Engels qualified that assumption: K. Marx: " The sum of average profit plus ground-rent can never be greater than the magnitude of which they are components and which exists before this division. It is therefore immaterial for our discussion whether the entire surplus-value of the commodities, i.e., all the surplus-labour contained in the commodities, is realised in their price or not. The surplus-labour is not entirely realised if only for the reason that due to a continual change in the amount of labour socially necessary to produce a certain commodity, resulting from the constant change in the productiveness of labour, some commodities are always produced under abnormal conditions and must, therefore, be sold below their individual value. At any rate, profit plus rent equal the total realised surplus-value (surplus-labour), and for purposes of this discussion the realised surplus-value may be equated to all surplus-value; for profit and rent are realised surplus-value, or, generally speaking, the surplus-value which passes into the prices of commodities, thus in practice all the surplus-value forming a constituent part of this price." http://www.marxists.org/archive/marx/works/1894-c3/ch49.htm F. Engels: "But if we were to demand that the rate of profit--say 14·876934...--should be exactly similar in every business and every year down to the 100th decimal place, on pain of degradation to fiction, we should be grossly misunderstanding the nature of the rate of profit and of economic laws in general--none of them has any reality except as approximation, tendency, average, and not as immediate reality. This is due partly to the fact that their action clashes with the simultaneous action of other laws, but partly to their own nature as concepts. (...) it follows from the very first that the total profit and the total surplus value can only approximately coincide. But when you further take into consideration the fact that neither the total surplus value nor the total capital are constant magnitudes, but variable ones which alter from day to day, then any coincidence between rate of profit and the sum of surplus value other than that of an approximating series, and any coincidence between total price and total value other than one which is constantly striving towards unity and perpetually moving away from it again, appears a sheer impossibility." (Engels to Conrad Schmidt. March 12, 1895) http://www.marxists.org/archive/marx/works/download/Marx_Engels_Correspondence.pdf I tend to think the "transformation problem" difficulty partly results from the fact that: (1) Marx doesn't really discuss all the different forms prices can take (real prices, ideal prices, future prices etc.), and (2) he doesn't clearly demonstrate why the concept of (aggregate) "price" logically presupposes the concept of "value". In the tradition of the political economists, he simply defines price as the monetary expression of exchange-value. Pedagogically, we can point up the problem here by asking the question, "how do national accountants get from observed PRICES to a macroeconomic aggregate of "gross VALUE added"? which is a kind of inverse transformation problem. Jurriaan
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