From: Ian Wright (wrighti@ACM.ORG)
Date: Wed Mar 28 2007 - 12:44:15 EDT
> The difference is that if you have a non uniform rate of profit > > 1. You can choose the case where it is a null transform - which is > certainly no less unlikely, > than the uniform profit rate. I think this is my point. In such a case how can the empirical demonstration that market prices are close to standard labour-values distinguish between - confirmation of the predictive power of standard labour-values - confirmation that the distribution of profit rates is negatively correlated with organic compositions? In the latter case, there is no need to transform. I also think, for reasons I do not want to get into, that the two statements are not necessarily equivalent. But if a conjectural event occurred in which profits moved closer to uniformity then during that time period would you recommend we reject the labour theory of value? > 2. If it is not either the null transform or the uniform profit rate you > are providing a whole > lot of new variables which can be set to whatever you actually > observe the profits and > market prices to be. At this point the theory no longer has any > predictive ability ( there > is no economy of information in comparing the theory with the actual > observed data). > Thus it is no longer a theory, merely a record of observed data. The TP is not about whether labour-values are good predictors for market prices. The TP is whether, under the assumption of a uniform rate of profit, labour-value is conserved in prices of production. Saying that in reality there is not a uniform rate of profit doesn't get to the root of the issue. That response does not answer the theoretical problem that a uniform rate of profit appears to prevent labour-value conservation. Why should this be so? Marx proposed the transformation in order to maintain conservation while following the classicals in maintaining that individual prices diverge from labour-values due to a general rate of profit. What is your answer to this theoretical question? - That such a state cannot occur in reality?, or that if it did occur then conservation will not hold? > A scientific theory must be more concise than the data it purports to > explain, if you introduce > as many free variables as the market prices, it becomes vacuous. I cannot disagree. But as you know simplicity has to be traded off with predictive accuracy. Otherwise, Newton should have not introduced elliptical orbits, since circular orbits explained almost all the data, apart from some small error. I'd accept a few more variables if they explain all the data. Best wishes, -Ian.
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