[OPE] Linear transformation between equilibrium prices and labour values

Perhaps one should clarify what Ian Wright has accomplished with respect
to the age-old transformation problem.

If one accepts a hypothetical state of equilibrium in a capitalist
economy in which the flow rates of profits of each industrial sector are
equal so that the equilibrium prices are:

    p = (1+r) (pA + lw),

then Ian has found a linear transformation between these hypothetical
prices and standard Marxian labour values, call them v, that is
completely determined by the properties of the system.

    p = v T

where the matrix T = [ (I-A) ( I - (A+C) )^-1 w ] and C is the matrix
of rentier consumption coefficients (by lending capital to each sector).
Thus in the hypothetical equilibrium state, it is C that makes prices
systematically diverge from labour values.

Ref: http://sites.google.com/site/ianwrightphd/Home/political-economy

//Dave Z
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Received on Fri Dec 3 04:05:51 2010