[OPE-L:3840] Rational expectations Marxism

From: John Ernst (ernst@pipeline.com)
Date: Mon Sep 18 2000 - 14:42:13 EDT

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I think Michael and I are agreed that placing Marx's
transformation procedure in a static context is unfair
to Marx. Michael pointed this out by noting that in times
of rapid technical change it becomes impossible to estimate
the life time of fixed capital.

I claimed that since Marx considered moral depreciation as
part of the overall depreciation charge, he assumes that
the economic life time of fixed capital is less than its
physical life time. If we are considering an economy
at a point in time, it is impossible to know those economic
life times without knowing the prices. But if we are deriving
prices of production for such a system, then we need to know
the prices of production. Thus, a solution to the transformation
becomes impossible if we work within the usual framework. Put
antother way, the usual manner of correcting Marx tacitly assumes
that moral depreciation is to be ignored as one transforms values
into prices of production.

I find no evidence that Marx changed his way of looking at
depreciation in order to transform values into prices of
production. Unlike Paul, I find no problem with computing
an average rate of profit at a point in time for an economy
in which technical change is taking place. Further, the only
way Marx's transformation procedure makes sense is with the
assumpiton that at least some of the inputs are already
transformed. Thus, Marx seemed to recognize that you could
not derive prices of production from values but could only
explain the relation between prices of production and values if
you wanted to proceed with an examination of an economy in
which technical change and the consequent moral depreciation
takes place.


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