[OPE-L:3705] Re: surplus value and transferrred value

From: Rakesh Bhandari (bhandari@Princeton.EDU)
Date: Mon Aug 21 2000 - 22:48:37 EDT

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Just to indicate what strong ground you are on in claiming that there is no
transformation problem, let us take the strongest case against you.

Let's say that Marx inititally did determine the cost price of a commodity
as the VALUE of the means of production plus the VALUE of the wage goods
necessary for worker reproduction.

Let's say then that "inputs" must indeed be transformed so that cost price
is now determined by the price of the means of production plus the price
of the needed wage goods.

mp means of production
wg wage goods

Now one of 2 things can have happened in modifying cost price from value to
price, as I have been trying to point out (keep p.309 in mind):

1. the price of means of mp is now greater than their value while price of
wg is less than their value which implies a. that less value is transferred
from the means of production than indicated by the money laid out for them
while b. workers have to put in fewer hours to be exploited at the same
rate or if they are put in the same hours they are exploited at a higher
rate because it takes fewer hours to procure the needed wage goods.

or visa versa

2. price of mp is less than their value while price of wg is greater than
value which implies a. more value is transferred than indicated from the mp
than indicated by their the money price while b. workers have to put in
more hours to be exploited at the same rate since it takes more hours now
to procure wage goods.

That is, transforming the inputs then depends on the nature of price-value
divergences in the previous period. It will not change however the form in
which the law of value asserts itself, that is by forming an average rate
of profit out of the total mass of pooled surplus value. The so called
failure to transform the inputs simply does not result in ANY logical error
in Marx's demonstration of the changes brought about by competition and the
circulation process in a value and surplus value producing economy. The
logic of the transformation is untouched by transforming the inputs.

However, there is yet another mistake in the Sweezy/neo Ricardian critique
of Marx. That is, it is illegitimate in vol 3 to determine the prices of
production for the means of production and the wage goods as inputs
SIMULTANEOUSLY with the prices of production for the means of production
and wage goods on the output side. Many have said this. I have tried to
provide a deep foundation for this critique in the nature of Marx's method.

For once one commits to simultaneism, that is reintroduce the conditions of
simple reproduction into the transformation by which the assumption of
exchange at value is relaxed, one has necessarily reified the vol 2
assumption of constant absolute and relative value. Nothing changes in
simple reproduction;however in reality "there is continual movement in the
growth in the productive forces, of destruction of social relations, of
formation of ideas, the only immutable thing is the abstraction of
movement--mors immortalis" as Marx puts in Poverty of Philosopy, p. 110.

So if in dropping vol 2 assumptions in dealing with vol 3 problems we now
find the law of value incompatible with the conditions of simple
reproduction, it is modelling in terms of equilibrium and simple
reproduction that must go as Rosdolsky long ago pointed out. For now we
are now only getting closer to the actual living history of capitalism
through successive approximations to reality.

All the best, Rakesh

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