[OPE-L:3708] textual evidence

From: Rakesh Bhandari (bhandari@Princeton.EDU)
Date: Tue Aug 22 2000 - 10:14:14 EDT

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The reason that this transformation issue has to be fought out to the
bitter end is quite simple: the transformation lays the very foundation for
Marx's crisis theory because it allows us to understand the falling rate of
profit from non Malthusian foundations, to use Brenner's unfortunate
expression. That is, an entrepreneur can reduce his costs and raise his
profits by replacing much direct labor for just a little more indirect
labor (so, contra Brenner, unit values are actually falling as a result of
indirect labor rising less than direct labor falls per unit), though,
unbeknowst to the entrepreneur, this will still drain the system as a whole
of the value substance and thereby exert downward pressure on the average
rate of profit (the very most important page is Marx's Capital 3, p.270);
it is true of course that for other branches the inputs should be getting
cheaper (Okishio, Van Parijs) in the next period as a result of these
innovations but this will only slow down the rising OCC of total capital as
in those branches there too are the same microeconomic incentives to
replace as much direct labor with as little more indirect labor As
Grossmann understood long ago, the transformation must be understood from
the perspective of crisis theory.

 Marx himself connects the transformation issue to his crisis theory:

"The individual capitalist (or alternatively the sum total of capitaists in
a particular sphere of production), whose vision is a restricted one, is
right in belieivn ghtat his profit does not derive from the labour employed
by him or employed in his own branch. This is quite correct as far as his
average profit goes. How much this profit is mediated by the overall
exploitation of labour by capital as a whole, i.e., by all his fellow
capitalists, this interconnectiohn is a complete mystery to him, and the
more so in that even the bourgeois theorists, the political economists,
have not yet revealed it.Saving of labour--not only the labour necessary to
produce a specific product, but also the number of workers employed--and a
greater use of dead labour (constant capital), appears a quite correct
economic operation, and seems from teh very beginning not to affect the
general rate of profit and the average profit in any manner,. How therefore
can living labour be the exclusive source of profit, since a reduction in
the quantity of labour needed for production not only seems not to affect
the profit, but rather to be the immediate source of increasing profit, in
certain circumstances, at least for the individual capitalist?"

In my opinion, this is the sum and substance of Marx's theory of value,
accumulation and crisis. And it can't be understood if we dismiss Marx's
theory of how prices and values are related via the formation of a general
rate of profit.

All the best, Rakesh

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