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Just for the sake of clarity,
There are logical problems with your assumption Rakesh. First of all, you
assume we've all read the correspondence; secondly, you take a non-answer
for assent. You can definitely rule me out of the latter assumption (and I
expect Ajit)--because another potential response is to see the discourse as
irrelevant to our (very different) interpretations of Marx.
But as for the general issue of Sweezy misreading Marx, you have complete
agreement from me. After all, he was the author through which most Marxists
"learnt" that use-value plays no role in political economy, when precisely
the opposite proposition can be found in Marx's own writings--including
those which Sweezy himself read.
At 04:26 PM 8/19/00 -0400, you wrote:
>As I check out, I must assume that the absence of a reply means that we are
>all agreed that
>1. Sweezy totally misread Marx in order to give the latter's imprimatur to
>Bortkiewicz's transformation problem. Since almost everyone has followed
>Sweezy's interpretation of Marx, almost all post war marxists have not
>2. That what Marx is really saying what that while he had assumed in his
>tableau that the value transferred from the means of production was equal
>to the price paid for them,the inputs would have to be corrected into
>values, for his transformation logic has shown that the means of production
>could not have been bought at their value. That is, Marx is saying the
>exact opposite of what Sweezy is claiming.
>As Marx drops the value=price assumption, he is not recognizing a need to
>transform the inputs from values to prices. It is true that in the
>formation of prices of production, the average rate of profit will be added
>to the cost price of the commodity in which the money laid out for the
>means of production is included; however to understand the value
>transferred from these means of production into the social pool of total
>surplus value, we have to account for how their values diverged from the
>price paid for them.
>3. That Marx is further saying that unless we know whether wage goods sold
>above or below or value in the previous period, we don't know how many
>workers can be hired out of the money sum of variable capital that
>entrepreneurs have laid out and we therefore don't what the rate of
>Which is to say that in the tableau, the v has to be the money sum laid out
>as variable capital, as Fred says--this is why Marx refers to c+v as the
>cost price of the commodity: they are both already in the money form. The
>value of a commodity however is constant capital + new value added which
>then decomposes into the replacement value of the variable capital and
>surplus value, itself divided between a fund for accumulation and a fund
>for capitalist consumption.
>4. Consider two possibilities: in the previous period means of production
>sold below and wage goods above value. This means the value transferred is
>greater than indicated by money price paid for the means of production as
>shown in the tableau while the rate of exploitation is less. Or assume that
>the means of production sold above value and the wage goods below value.
>This means that the value of the means of production consumed in the
>commodities is less than indicated by the money price of the means of
>production while the rate of exploitation is higher than the 100% Marx
>These corrections however change nothing about the form in which the law of
>value asserts itself. The true unknowns in Marx's tableau--aside from the
>prices of production--are the value of the means of production consumed in
>the commodity output and the rate of exploitation. They are given in the
>tableau, but Marx recognizes that they will depend on the nature of
>price-value divergences in the immediately previous period. If we don't
>remember this, it is always possible to go wrong.
>The point however is that whatever these (value of means of production
>consumed in the commodity output, rate of exploitation) turn out to have
>been--and that they can't precisely be known is central to Marx's theory of
>the obfuscatory nature of the price or monetary (mis-)representation of
>value--they do not affect how the law of value governs bourgeois society
>through the formation of an average rate of profit out of the mass of
>surplus value in the system as a whole.
>Prices of production of course will be calculated in terms of the cost
>price of commodities plus that average rate of profit.
>But Marx is not obviously not interested in an exact price theory as much
>as a theory of the form through which the law of value must assert itself,
>which explains not only why phenomena cannot be directly identical with the
>law of value but also thereby why its workings are denied by those caught
>up in bourgeois society.
> That Marx is not interested in an exact price theory is revealed by his
>failure to deduct, among other things, interest and rent payments out of
>the mass of surplus value from which he determines the average industrial
>rate of profit.
>5. Since Marx is dropping the vol 2 assumptions of exchange at value,
>annual turnover of fixed capital, constant relative and absolute value (or
>price), it would be nonsense for him to construct a vol II-like model of
>simple reproduction in which the same prices of production hold for both
>the inputs and outputs while carrying over one condition or another from a
>value denominated model of simple reproduction.
>In vol III, reproduction must now be studied in the absence of the
>simplyfying assumptions of vol II; for example, this is why in his
>transformation tableau marx drops the assumption of annual turnover of
>fixed capital and differentiates between c and used up c. This correction,
>among others, is lost in Bortkiewicz's formulation of the problem which
>reveals neglect of Marx's method of successive approximations, as
>reconstructed by Grossmann, which Sweezy surprisingly claimed to be
>In short there is no transformation problem. Fred is correct that the
>various Shaikh-Foley-Dumenil solutions all accept the wrong starting point:
>that c's and v's in the transformation tableau are not in values but
>already prices. They are components of the cost price.
>However, Fred, Alejandro R and others are incorrect that Marx sees no need
>to transform the inputs in order to understand the transformation. The
>transformation of the inputs (viz the means of production) however is in
>the exact opposite direction in which Sweezy and those who have followed
>him (which is almost everybody: Desai, Gouvernor, Howard and King, Kuehne,
>Roemer, Meek, Dobb, Steedman, Sinha, etc) have claimed.
> Which is to say that marxist economists are guilty of a massive campaign
>of obfuscation against Marx either to discredit him or to prove some
>acquaintance with mathematical tools which are entirely inappropriate to
>the problem at hand (either way the underlying problem is the same--to gain
>respectability in the fraternity of bourgeois economists). Particularly
>egregious has been the repeated claim that Marx admitted the same problem
>which the economists have been trying to solve through the methods devised
>by Bortkiewicz, Sraffa and others.
>All the best, Rakesh
Dr. Steve Keen
Economics & Finance
University of Western Sydney Macarthur
Building 11 Room 30,
Goldsmith Avenue, Campbelltown
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Home Page: http://bus.macarthur.uws.edu.au/steve-keen/
Workshop on Economic Dynamcs: http://bus.macarthur.uws.edu.au/WED
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