[OPE-L:3985] (no subject)

From: Rakesh Bhandari (bhandari@Princeton.EDU)
Date: Fri Oct 06 2000 - 03:55:00 EDT

In 3974, Allin writes:

>Rakesh writes [3973] re. my last reply on the transformation,
>"I don't see how this is a response at all."
>OK, time to stop on that topic; the discussion is not going

You argued that it complicated matters	to make the transformation 
both a solution to a dynamic price  problem and the resolution of the 
contradiction between the average rate of profit and the law of 
value. You said that we had to forget about the first and concentrate 
on the second.

But I already said that I was not interested in the price problem! 
Marx is not seeking a determinate solution to the first, only a 
resolution of the second contradiction. This is why you are simply 
not responding to me. I agree that I have not been as clear as I 
should be, so let my try again.

  Under the influence of bourgeois price theory and its explantory 
aims, most scholars have simply missed the exact problem Marx had 
inherited from Ricardo and Malthus--E Ileyenkov is a sharp exception 
in his actual intellectual reconstruction of the debate. Moreover, 
due to Marx's solution the explanadum of value theory is no longer 
even relative prices.

That is why I have said that it does not matter what the inputs are 
transformed into (we only would have to know that and a host of 
things to arrive at the determinate prices of production for the 
outputs), as long as one simply rules out that they are determined 
simultaneously with the prices of the production of the outputs.

This is the only saving assumption--the extirpation of simultaneism 
as John E puts it--one has to make to accept as logically possible 
Marx's value theoretic resolution of said contradiction.

  I have not tried to complicate the transformation by trying to solve 
two problems at once--the determination of relative prices and the 
resolution of said contradiction.

I have said over and over that we don't need to know what the 
transformed input prices had to have been to understand the logic of 
Marx's resolution of said contradiction. So I have said that we 
should give up on any claim that we have in the strict sense determined or
can determime  the unit input prices and thus the unit output prices
(forget prices!);  rather we should understand at the very abstract level
at which it is	pitched the logic of Marx's reversal of Malthus' critique
of Ricardo.

  As I said, a third tableau with new numbers in the cost price column 
could have easily been drawn up, which would then change the average 
rate of profit and prices of production from  from the second tableau 
but would maintain the two equalities in terms of itself.

The reason Marx does not draw up such a tableau is because there is 
no data already on the table to determine the prices of production 
produced in the previous period. Using simultaneous equations simply 
forces this period to hold for the last period. That is, it is a 
completely arbitrary (as well as atemporal, backwardly causal, and 
fantastically unrealistic--see Alan F) method of determining unit 
input prices. As I have said many times, an unreasonable solution is 
worse than no solution. This is an independent point to which you or 
Ajit could have responded by now. Since Alan F had published this 
criticism almost twenty years ago, Ajit could have recognized it in 
his Encyclopaedia piece.

So my point is that the second completed transformation tableau is 
not sufficient to determine exact unit input and thus output prices, 
and it should not be forced to provide answers which it cannot 
possibly deliver by reconfiguring it via the use of simultaneous equations.

For those in search of a price theory, this would seem to leave us nowhere.

But again we don't need to know what the unit input prices were to 
understand how Marx has resolved the second contradiction, the actual 
problem in which he was interested.

  That is, there is still the same value theoretic determination of 
the average rate of profit: total value (which has a determinate 
monetary expression based on the assumption of a constant value of 
money) minus total (modified) cost price=total profit, which is then 
divided by total modified cost price=r; correlatively, the prices of 
production are kr. This is all we need to understand to grasp Marx's 
reversal of Malthus' critique of Ricardo. 

We don't need the actual values for the variables to understand that
far from contradicting or modifying the law of value, the principle 
of the average rate of profit itself has been shown in these abstract 
terms to be most important form in which the law of value asserts 
itself in a developed capitalist society. 

The sheer intellectual	excitement of having turned Malthus upside down has
been missed due  to what Shaikh has called a poverty of algebra.

(That Malthus has turned out to have been quite an influential 
figure: his criticism of the theory of labor value is still the 
primary one--the contradiction between the law of value and the 
average rate of profit--and his population theory seems to have had 
pernicious influence on Keynes according to John Toye; I won't return 
to the debate about whether he influenced Darwin and Wallace).

  Now whether the law of value actually does govern bourgeois society 
in this form of the average rate of profit that yet seems to most 
decisively contradict it  becomes a matter of hypothesis testing.

Now Allin, I must say, that your analysis of moral depreciation seems 
most helpful, and look forward to giving it a careful read. My first 
question is the about the implications which moral depreciation may 
have for the ferocity with which capitalists will confront strikers. 
For when they return, the moral depreciation may have been severe 
enough that the investment simply cannot be recouped and capital 
thereby destroyed? Knowing this, industrial capitalists may reason 
that control over the strike weapon is of paramount importance, a 
matter of life and death for the capitalist, as personification of 

All the best, Rakesh

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