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Patrick, thank you for this reply.
>I think I understand your argument. Consider the following.
>1+r(p1*a11 + p2*a21 + w*L1) = p1
>1+r(p1*a21 + p2*a22 + w*L2) = p2
>Are you saying that the technical coefficients (a11, a12, a21, & a22, L1,
>and L2) are determined simultaneously with the price system?
Well yes. How could the technical coefficients, which are industry
averages, be determined beforehand or at least before the determination of
the level of output for each commodity unless one wanted to simply make the
supposition that there are *fixed* proportions between inputs in every
industry so that nothing *by defintion* depends on the scale at which
output is produced. Only by this assumption does it seem to make any sense
to *begin* with the so called average technical conditions of production.
The assumption seems unwarranted to say the least to me, so I am going to
begin the way Fred does in his monetary-macro interpretation in which "the
inputs of constant and variable capital are taken as given in price terms
in the determination of prices of production and thus do not have to be
transformed from value magnitudes to price magnitudes." (Fred, 1991; see
also Mattick Jr and Carchedi).
It seems to me that the real problems with the labor theory of value are
not in terms of the transformation problem (transforming the inputs, the
two equalities); rather the attack made by the lion of the anti Marxists
Bohm Bawerk remain the most potentially damaging. It's possible that even
Marxist economists who are themselves comfortable with static equilibrium
models in which money is kept on the margins feel more at home with
Bortkiewicz, Sraffa and Samuelson in this shadow world of the
transformation problem than they would confronting the philosophical issues
raised by Bohm, so Marxist economists are guilty of keeping the debate on
this narrow and now well worn terrain?
>Some have made this criticism of linear models.
That old communist Blaug?
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