[OPE-L:4133] iterative transformation

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Tue Oct 17 2000 - 02:32:45 EDT

Re 4118

>Just for the record:  I asked in my [4040] that my [4039] reply
>to Rakesh be disregarded since it was too hasty.  On reflection,
>while I would change the wording if I had 4039 to write again,
>I stand by its substance.  That is, I think Rakesh was changing
>the subject in his [4038], by envisaging a change in the
>labour-time accounts relative to the original table that we were
>trying to "transform". 
>Allin Cottrell.

Here is the exchange.

After some attempts on my part, you finally reconstructed your 
iterative tableau such that the value of the inputs determined the 
sum of their prices of production:

This line won't help you.  Here was my last table:

  round: 46
	  c	  v   profit    price   pvratio 
    I  243.00   81.00   96.00   420.00   1.1200  
   II  108.00  108.00   64.00   280.00   0.9333  
  III   54.00   81.00   40.00   175.00   0.8750  
Tot.  405.00  270.00  200.00   875.00   1.0000  

On the interpretation you're proposing, how are you going to
write the next table?  You'll have to put 420.00 at the foot of
the "c" column and 280.00 at the foot of the "v" column as these
"greater quantities" of output are put to use.  If you write 200
for aggregate profit, you've then got an aggregate price of 900,
not equal to total value.

I responded:

Why would I write 200 for aggregate profit for the next period? 
Instead maintain r as 1.3, then aggregate value or price in the next 
period is 910, profit or sv is 210. It would be unreasonable for it 
not to increase since more labor time will now be embodied in the 
final product.

For we now have 300 wage goods in physical units, suppose that each 
ten buys a working day. So we have 30 full time workers.

In the previous period we had  286 wage goods in physical units, so 
only 29 full time workers.

A working day produces roughly the same total value in both 
periods--30 (30/910; 29/875). the rate of exploitation rises 
slightly. 29 workers produced $200 profit, now 30 workers produce 
$210 in profit.  Again, no unreasonable changes. Actually the kind of 
change which should be a mark in favor of Marx's method!

The introduction of time subscripts or the treatment of the 
transformation as one period in a realistic sequence (Carchedi) 
renders Marx's value theory logical enough that it can be tested 
against reality. Is this really something you want to fight against?

All the best, Rakesh

This was your reply in 4039 (note how much of my reasoning you left out):

>  >   If you write 200
>  >for aggregate profit, you've then got an aggregate price of 900,
>  >not equal to total value.
>  Why would I write 200 for aggregate profit for the next period?
>  Instead maintain r as 1.3, then aggregate value or price in the next
>  period is 910, profit or sv is 210. It would be unreasonable for it
>  not to increase since more labor time will now be embodied in the
>  final product.

Argh!  Where is this increase in labour time supposed to be
coming from?  In your last post the increase in output was
simply the result of an increase in the physical productivity of
labour!  Now it suddenly requires an increase in labour input. 
You're changing the subject as fast as I can show you what's
wrong with your previous assertions.

Total price doesn't equal total value, so you fix it up by
increasing the total value, when by assumption we're trying to
produce the price-of-production counterpart of a _given_ value
system (the original table).

Now I _really_ give up. 


Now despite your exclamation, Allin, I clearly explained where this 
increase in labour time was coming from. You will see that as usual 
you cut me off where I provide my reasoning, which I shall show below 
to be solidly grounded in Marx's reasoning.

I have not changed my argument once though you have yet to understand 
it while complaining about my obstinate inability to understand 
another point of view: if the transformation tableau is understood 
not in terms of simple reproduction but rather as one period in a 
realistic sequence in which all variables are time subscripted, the 
transformation disappears.

That there is a transformation problem under the conditions of simple 
reproduction or equilibrium is to me nothing more than a curio. If 
only the Marxists had the social power to dismiss it as such.

At any rate, in order to read your posts as replies to me, I had to 
reconfigure your  a simple reproduction table as such a period in a 

There is thus no reason for me or anyone with the slightest interest 
in reality to assume at t+2 the total value/price will be the same as 
total value/price at t+1.

All I had to show was that all such changes are reasonable which is 
what I tried to show. And to which you did not respond. From my 
perspective, the transformation is complete; in your language we have 
already produced the price of production counterpart of a given value 
system at t+1. The pv's, the r, and the total mass of profit/value 
can, and should be expected to be, different at t+2.

At any rate, such a sequence is clearly what Marx had in mind. To 
take one of many passages:

...the development of labour productivity contributes to an increase 
in the existing capital value, since it increases the mass and 
diversity of use values in which the same exchange value is 
represented, and which form the material substratum, the objective 
elements of this capital, the substantial objects of which constant 
capital consists directly and variable capital at least indirectly. 
The same capital and the same labour produce more things that can be 
transformed into capital, quite apart from the exchange value. These 
things can serve to absorb additional labour, and thus additional 
surplus labour also, and can in this way form additional capital. The 
mass of labour  that capital can command does not depend on the its 
value but rather on the mass of raw and ancillary materials, of 
machinery and elements of fixed capital, and of means of subsistence, 
out of which it is composed, whatever their value may be. SINCE THE 
NEWLY ADDED TO IT GROWS AS WELL.  Capital 3, p. 356-7. vintage

Once the transformation is understood as period in the kind of 
sequence Marx understood capitalist dynamics to imply (and if you 
wish I can provide 4 or 5 more quotes like this from Capital 3 and 
TSV), then the assumptions which I made are not arbitrary in the 
least. They are in fact not only Marx's assumptions, they are the 
only realistic ones.

Whether the transformation does not hold in those conditions which 
most interest neo classical economists is of little interest. Of 
little theoretical interest. It of course has been of great use in 
the bourgeois war, often carried out by Marxist economists, against 
Marx's theory of value.

At some point, I hope it becomes clear that the transformation 
problem is nothing but a great comedy of errors, with some of the 
most serious, no bullshit Marxists as the leading funny men.

Yours, Rakesh

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