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From: Rakesh Bhandari (bhandari@Princeton.EDU)
Date: Wed Aug 16 2000 - 02:53:39 EDT

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Dear Fred,
Take your time in responding to me. I just won't be able to participate as
I have to move and prepare for classes in which my heart is not at all
(really have lost interest in ethnic studies altogether).

Please do remember that I do agree with you that in Marx's transformation
tableau the constant capital and variable capital are money sums; that
there is no appearance of value other than money means that the inputs
would have to be in money.

We also do not disagree that the value of these means of production cannot
be their price. We also do not disagree that if wage goods are sold at
above value, then fewer workers can be hired and the rate of surplus value
will be thereby reduced. And if wage goods are sold below value, then visa

I just think Marx is saying this: "Yes, I assumed that value of the means
of production consumed in a commodity is determined by the price the
capitalist paid for them, but my transformation exercise has shown this
assumption not to be true. What value is really transferred in each branch
from the means of production and from the constant capital in the aggregate
I simply do not know, and we cannot know because value is necessarily
unobservable and misrepresented in its necessary form of appearance. We do
know however that the value of these inputs necessarily did diverge from
the prices of production at which they purchased.

"However, whatever the value transferred in each branch and in the
aggregate turns out to have been, it does not change how the average rate
of profit and prices of production are formed out of the mass of surplus
value to which this unknown and unknowable constant capital contributes. We
can never know the value magnitudes with any precision, so any attempt on
my part to correct the tableau by now adding to the the price paid for the
means of production the value of those means actually consumed in the
commodity would simply be an arbitrary exercise.

"There is no reason for me to do it. As I wrote to my friend Kugelmann, I
have demonstrated however what I set out to do: to prove that the form in
which the law of value asserts itself does not allow it to directly account
for phenomena which thereby also explains why its workings are denied by
those caught up in the everyday life of bourgeois society. I had no
intention ever to devise a method by which to determine what prices really
must be. This is both impossible and marginal to my interests. In this
regard, Paul Mattick Sr has understood me well. "

YOurs, Karl

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