This is a response to Andrew's (2624) on whether Andrew and Ted's
interpretation of the transformation problem requires multiple periods.
In previous posts, Andrew has acknowledged that in their interpretation,
prices of production and the rate of profit continue change from period to
period. However, he argued that what is really causing these continuing
changes in prices of production and the rate of profit is not the
transformation of output prices, but is instead the inequality of input
prices and output prices.
In his most recent post, Andrew has not responded to my main argument
against his attempt to explain continuing changes in prices of production by
the inequality of intput prices and output prices, rather than by the
transformation of output prices. In my last post, I argued:
Andrew's distinction between the transformation of output prices and the
inequality of input prices and output prices is a false distinction.
Because, according to KM's interpretation, input prices are not equal to
output prices precisely *because of the transformation of output prices*.
In the first period of their examples, given input prices are assumed. The
prices of output then change as a result of the equalization of profit
rates, or as a *result of the transformation of output prices*. As a
result of this transformation of output prices, output prices will not be =
to input prices. Therefore, Andrew arguement - that the continuing changes
in prices of production and the rate of profit are caused by the inequality
of output prices and input prices, and not by the transformation of output
prices - is false. The inequality of output prices and intput prices in
their examples is itself caused by the transformation of output prices.
I now add: the inequality of input prices and output prices in their
examples is NOT caused by input prices = market prices, NOR by past
technological change (the two new factors introduced by Andrew in his recent
posts); in their examples, input prices are equal to the prices of
production of the previous period and technology is assumed to be constant.
Rather, the inequality of input prices and output prices is caused by the
transformation of output prices. Therefore, it cannot be legitimately
argued that the continuing changes in prices of production and the rate of
profit are caused by the inequality of input and output prices and not by
the transformation of output prices. In their examples, the former itself
is caused by the latter.
Therefore, Andrew's "light switch" analogy is invalid. In the case of the
light coming on, turning on the switch is completely independent of the
voice command and can happen without the latter. However, in KM's examples,
the inequality of output prices is not independent of the transformation of
output prices and cannot happen without the latter; rather, it is caused by
the latter.