Ajit Sinha wrote: Many scholars have argued that the divergence of total profit from > total surplus value or the total prices of production from the > total value is not all that damaging for Marx's basic proposition > about exploitation, since it can be proven that positive profit is > possible if and only if there is positive surplus value (see > Wolfstetter, 1973; Morishima, 1973, Morishima and Catephores, > 1978). Recently Sinha (1991, 1996) has argued in favour of using > the condition that total value is equal to total prices of > production as an outside constraint on the system, given that > values are substance and it is neither created or destroyed in the > process of exchange. Moreover, the system must be put in a > balanced state since only in a balanced state the prices of > production could actualise. In this case, Morishima (1973) has > shown that Marx's average rate of profit will come out to be the > correct solution if there is zero consumption by the capitalists, > ie. all the surplus value is reinvested or accumulated. However, > this, in general, will not be true in the case of capitalists > consuming a part of the surplus value. Shaikh (1984) argued that > this happens because capitalists' consumption becomes part of the > revenue and falls out of the circuit of capital. Since we can > explain the divergence of prices of production from values as well > as the divergence of total profit from total surplus value on the > basis of the value analysis itself, the transformation problem > should be considered solved. > > Note: the reader should know that I'm not convinced with Shaikh's argument. The > point has been left uncriticized there. Ajit Sinha In my view the transformation problem (that you summarized in your posts) has been discussed extensively in the decades of 1970's and early 1980's and the solution proposed independently by Morishima (1973), Okishio (1973?!) and Shaikh (1973, 1977, 1984) deals with the issues of logical consistency and all that in (my view) a satisfactory way. In addition the solution by Shaikh (1984) includes also a discussion of the circuits of revenue and capital which present (besides the mathematical) a conceptual explanation of the possible divergence of total surplus value and profit. These two magnitudes normally are expected to differ from each other and only in the improbable case that there is no circuit of revenue (i.e. the economy expands along a von Neumann ray) the two totals equal to each other. I am very much interested in your critique to this thesis.
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