# [OPE-L:4013] Re: Re: The Transformation Non-Problem and the Non-Transformation Problem

From: Tsoulfidis Lefteris (lefteris@uom.gr)
Date: Sun Oct 08 2000 - 12:28:49 EDT

```Andrew_Kliman wrote:

>
> "Marx admits that the inputs have to be transformed into prices of
> production. He does not say that they have to be transformed into the
> SAME prices of production as the outputs."
>
> Lefteris [OPE-L:4010] responded:
>
> "The above proposition ( that is approved by Kliman) I find ... highly
> problematic, to say the least, because it implies two systems of prices
> of production [--] one for inputs and another one for outputs [--] and
> as a result two average rates of profit."
>
> This isn't true.  The proposition implies a single system with a single
> average profit rate, namely
>
> P[t+1]*B = (1+r)*P[t]*A
>
> (or something similar), where the P's are the price vectors of two
> different moments t and t+1, r is the uniform profit rate, and A and B
> are matrices of inputs and outputs.
>

O.k. Is this is a joint production system? what exactly is this B? what is
this r? does r change with time? how do you determine it? the TP has not been
discussed in terms of joint production but in terms of single production.

So in case of single production the above system must be written as:

P[t+1]= (1+r(t))*P[t]*A

Certainly, such a system is in disequilibrium, and if we allow for time
t->infinite and the eigenvalue of A is less than 1 then we get

lim P(t+1)/Pt=1 for t->infinite

it follows that P(t+1)=Pt=P*

where P*  is the pop of the system and the eigenvalue of A=1/(1+r) etc. that
is a single price of production and a single rate of profit as expected.

>
> Lefteris:  "Furthermore, what is an input and what is an output is also
> problematic because inputs are outputs and outputs are inputs at the same
> time[,] i.e. there is a single market for both inputs and outputs when
> the economy is viewed as a totality."
>
> Inputs and outputs are not distinguished by the nature of the good.  They
> are distinguished functionally.

This is O.K. but still are bought and sold in the same same market, which is

> Inputs are what are used in a production
> process.  Output is the result of that process.  Generally the process
> takes time, so that inputs precede output.  I see no ambiguity here.  The
> inputs into a production process are never the outputs of that process,
> nor are the outputs of a production process ever the inputs into the same
> process out of which the output issued.
>
> Lefteris:  "So either we have a single system of prices of production or
> we simply do not have prices of production at all. We just have prices
> without the equalization of the profit rate which can be called whatever
> but prices of production."
>
> Again, this isn't so.  See the single equation system above.

I will if you account for my points above.

Lefteris Tsoulfidis
```

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