A reply to Duncan's ope-l 5339. (Since the thread has become "corrupted,"
I've given it a new name.)
Rieu and Duncan have claimed that, although the "New Solution" (NS) to the
"transformation problem" is simultaneist, it nonetheless replicates Marx's
result that production conditions in luxury industries affect the general rate
of profit. I have shown that this cannot be the case, given that workers'
spending on "wage goods" equals their wages. Duncan has now given what seems
to me to be a somewhat equivocal reply, writing: "_given_ the value of
labor-power in the NS sense, the composition of demand (including luxury
consumption) can affect the surplus value. But if we assume that the value of
labor-power always adjusts to maintain w = pb, the endogenous fluctuations in
the value of labor-power offset these effects."
If necessary, I guess I'll have to come back and debate the meaning of the
"value of labor-power" being given. But let me try a simpler and more
straightforward demonstration by abstracting from wage-related stuff entirely.
Assume that the "value of labor-power" is zero. :-) :-) So it is given.
Wages are also zero. :-) :-) Then it is clearly the case that the NS, like
all other simultaneist interpretations, contradicts Marx's claim that
production conditions in luxury industries affect the general rate of profit.
Lest anyone say that I'm dealing with a nonexistent case, here's my
pre-emptive reply -- That is irrelevant. The issue is whether an
interpretation conforms to Marx's reasoning. Marx's reasoning as to why
production conditions in luxury industries affect the general rate of profit
has NOTHING to do with the level of wages, and therefore an adequate
interpretation must not invoke particular assumptions concerning wages in
order to replicate his result -- it needs to replicate the result in ALL
cases, and for the REASONS that Marx himself put forth.
Andrew Kliman