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On Wed, 20 Sep 2000, Rakesh Bhandari wrote:
> Yes, Marx had assumed price=value. His transformation tableau--which is a
> mental model with no relation to actual prices or profit rates--begins with
> this assumption only to show that price cannot be directly determined by
> labor time; now that Marx has logically relaxed the assumption, he argues
> that the cost prices with which he began would have to be modified to
> indicate that the invested money sums could not have been determined by
> the value of the means of production or (indirectly) the wage goods.
> You argue then that we need to know the unit prices at which capitalists
> would have purchased means of production and (indirectly) wage goods to
> calculate the correct cost prices.
> This is correct.
OK, we're agreed so far.
> But it is neither rigorous nor analytical to have unit input
> prices retroactively determined on the basis of the
> technical conditions (+one distributive variable) by which
> output prices are being determined. Such interation to
> consistency as you put it has no warrant. As Alan F has
> long pointed out....
Yes, this has been hashed over at length on the list and I don't
have anything new to add to that controversy. I'll just say
that the vector of mutually consistent prices that would
equalize profit rates on the basis of given, constant technical
conditions (while the premiss is of course counter-factual) is
not without interest, and I'm sure that if Marx had been able to
come up with a derivation of this vector he would have done
so: and would have been forced to face the problems it entails.
> Now what happens if when looking at the tableau we
> realize--as Marx himself emphasizes--that the cost prices as
> given could not be correct? I grant that Marx cannot then
> calculate the correct average rate of profit and prices of
> production, but I suggest that Marx had no such intention on
> the basis of the transformation tableau. He meant only to
> logically turn the Malthus critique upside down.....
I had thought that Marx had something much more ambitious in
mind than a critique of Parson Malthus -- namely the
completion/correction of Ricardo's analysis of the relationship
between the labour theory of value and profit-rate
equalization. That's what he tells us he's after.
> And if you think price/value deviations are so
> insignificant, why are you so bothered that Marx's tableau
> does not allow for such in terms of the inputs? Why exactly
> are you up in arms over this so called second order
Fair question. I do believe that the second-order complication
is not of great practical importance. But I value analytical
clarity, and it don't think it's any service to Marx to fudge a
theoretical issue on which he expended a great deal of
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