[OPE-L:3964] Re: Re: Re: Re: Re: Re: The Transformation Problem

From: Tsoulfidis Lefteris (lefteris@uom.gr)
Date: Thu Oct 05 2000 - 03:43:52 EDT

"Rakesh Bhandari (bhandari@Princeton.EDU)" wrote:

> In 3944 Lefteris Tsoulfidis noted:
> >(3) It seems to me that the question of time does not appear in the
> >TP in ch. 9. Time and
> >investment behavior appear in ch. 10 and after.  The TP in ch. 9 is
> >discussed purely in
> static terms and really constitutes  an exercise in logic
> This is not true. As I noted to Allin who did not reply, Marx is
> already investigating in ch 9 why the prices of production in a
> particular sphere are undergoing changes of magnitude (see capital 3,
> p. 265ff. Vintage; see also p. 270-1 where marx refers to the rise of fall
> of the portion of cost price which represents constant capital in a given
> sphere of production; note also p.271-2 where Marx analyzes the impact of
> rising productivity). So there is no reason for the stricture that the  so
> called transformation problem has to be solved on the assumption  of input
> prices of production=output prices of production. Of course  if this
> assumption is dropped as it should be for a temporal
> sequential approach (and why can't an exercise in logic include time
> subscripts), then there no longer need be a discrepancy between total
> surplus value and total profit that has to be arbitrarily accounted
> for by postulating revenue expenditures of exactly the right size. Of
> course one can say that within a static framework such revenue
> expenditure could account for the inequality between total surplus
> value and total profit; that is, this can be offered as an escape
> hatch if one confines herself for the sake of argument to a static
> (or more accurately replicating) world in which input prices have to
> be output prices.

My understanding is that once you are given your cost price or productivity
(that is when your problem is cast in terms of labor time) then you continue
with the transformation procedure (where the givens do not change). There is
no problem with using time subscripts, you can but your solution will be the
same. Perhaps the analogy with the operation of the keynesian multiplier would

help. We know that one can trace the different round effects of investment and

at some time add them up and approximate the true change in the income, which
could be obtained directly by solving the system of equations.

Of course,  there is the question of  technological change, which  is a
question that I am interested in but have no good answers.  I think of it as a

different question and one answer _might be_  that once you have prices
(values or pop) then you can study this phenomenon. It appears that we have a
kind of comparative statics exercise, i.e. we estimate prices in different
time periods and we have no way to say what exactly happened between the two
periods. In fact, this is how the issue of technological change is discussed
in the input-output analysis. The reason is that technological change is a
rather slow process and really big changes appear after a long interval of
time. As i-o tables are constructed in say every 5 years  then by estimating
prices we can tell something about technological change. What do you think?

Lefteris Tsoulfidis

This archive was generated by hypermail 2b29 : Tue Oct 31 2000 - 00:00:08 EST