>John wrote:
>
>What does the transformation problem look like if we try to
>do it backwards? That is, most "solutions" follow Marx and
>attempt to explain the transformation of values into prices of
>production. Why not transform prices of production into values?
>
>That is, assume a set of capitals in which the rate of profit is
>uniform and the compositions of capital differ. In moving from
>this initial state which we call Period I to the next, assume
>that one of the capitals which is above average in composition
>grows at a faster rate than the others, the rate of profit remaining
>the same. Does an hour of abstract labor in Period I create the
>same amount of value as it does in Period II? The same problem
>arises if a capital of lower than average composition grows at a
>faster than the others.
>
>Simon writes:
>
>I don't understand the specification. Why should anything different happen
>in Period II if the uniform rate of profit does not change?
>
>
>John responds:
>The relation between total price and total value changes since the
>labor added in the production process of period II creates less or
>more value than average since it is working with a capital of a
>larger or smaller composition respectively. Living labor does not
>add the same amount of value expressed in prices as before.
>
Simon replies:
Sorry, I still don't understand. In Period I all capitals (of varying
composition) earn the same (equalised) rate of profit. You want to disturb
this equilibrium by supposing that some capital of above average composition
grows faster than all others, and at the same time maintain the equilibrium
by supposing that the actions of this capital have no effect on the rate of
profit (and therefore on prices of production). But if there are no effects
of this capital's actions on prices and the rate of profit, does your
question ('Does an hour of abstract labor in Period I create the same amount
of value as it does in Period II?') make sense? Is it of any interest? Does
the answer matter?
Am I misunderstanding something?
Simon Mohun,
Dept of Economics,
Queen Mary and Westfield College,
Mile End Road,
London E1 4NS,
UK
Telephone: 0171-975-5089
Fax: 0181-983-3580