[OPE-L:3837] Re: Re: Rational expectations Marxism

From: clyder (wpc@dcs.gla.ac.uk)
Date: Mon Sep 18 2000 - 11:09:37 EDT

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> Mike Perelman
> clyder wrote:
> >
> > Does this not vitiate the whole premise of the formation of a uniform
> > of profit?
> Yes and no. Yes, if you are thinking in terms of a static equilibrium.
> if you are thinking of a tendency.

I think that the existence of a tendancy may be true but dynamics
introduces a countervailing tendancy. Industries with high organic
compositions of capital are the industries most subject to technological
change induced losses. This will tend to mean that industries with
a high organic composition of capital will have below average
rates of profit. If that is the case then the transformation effect
of a high organic composition ( which should result in prices
above values ) will be offset by their actually lower rate of profit
in comparision to industries with lower organic compositions.

> >
> > Is the idea of a transformation from values to prices of production
> > tenable
> > if the valuation of fixed capital is indeterminate?
> You are correct. The transformation problem [in the form of an algebraic
> solution] does not make sense.

Ajit wronte
> I think a theory of prices is essentially a static problem. There cannot
be a
> dynamic theory of prices, particularly when technological change is taken
> consideration. You simply cannot have any means of consistent measurement.
> Ricardo did want to have a theory of prices in a dynamic context of
> change. But all the works have shown that this was "will of the wisp".
> ajit sinha

I agree that the transformation problem only makes sense under static
conditions and the assumption of the actual formation of a uniform rate of
profit. I also think that in practice under the turbulent conditions of
change and demand fluctuations of the real world that one lacks
the preconditions for the transformation process described in classical
theories such as Marx and Sraffa to occur.

What I find theoretically inconsistent are attempts by authors like Kliman
and others to use the conditions of dynamic technical change to criticise
the Sraffian system whilst retaining the feature of a uniform rate of
If you introduce dynamic technical change one can no longer assume
profit rate equalisation.

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