[OPE-L:4261] Re: Re: Re: Re: Part Two of Volume III of Capital

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Tue Oct 24 2000 - 13:07:00 EDT

Re Allin's 4258

>On Tue, 24 Oct 2000, Rakesh Narpat Bhandari wrote:
>>  These equilibrium habits are hard to break.
>What is the assumption of an equalized profit rate, if not an
>"equilibrium habit"?

The profit rate is equalized at t-1 as it is equalized at t+1. It 
need not be *exactly the same* equalized profit rate as your 
equilibrium thinking insists against all realism.

>>  The input prices of production will depend on myriad factors
>>  in the period t-2 to t-1, including for example how much the
>>  luxury sector sold below value at t-1, how different the OCC
>>  was, the change in the rate of surplus value.
>As I read your discussion, your conclusion ought to be: "We just
>don't know whether or not Marx's two equalities hold.  To verify
>that we'd have to put the inputs into prices of production, but
>there's no principled way of doing that (since we can't assume,
>even for the sake of argument, that the value table -- let alone
>the physical table -- was the same in the period prior to the
>one under consideration)."

yes. the value and physical table at t-2 to t-1 could not have been 
the same as t0 to t+1. This does not seem to me to violation of 
principle, save the principle of equiibrium thinking.   At the very 
least, less surplus labor would have been absorbed due to the smaller 
quantity of use values in the previous period. Marx showed why this 
is implied by rising labor productivity. Exactly what is your problem 
with this?  Why are you outraged by someone who has a tough time 
believing that the capitalist economy is ever in the state of 

>To get Marx's conclusion, you'd have to exhaustively enumerate
>all possible scenarios that meet your standard of "realism", and
>show that the equalities held in each case.  More like Alice in
>Wonderland than Capital.

Allin, it's utterly unrealistic to think that you could do a 
*determinate* transformation of the inputs simply from data in a 
highly contrived, one period model. Marx was correct to leave the 
problem "unsolved." Whether you apply output PV ratios on the inputs 
or use simultaneous equations, it still comes out to same fantasy of 
atemporality or backward causality, as Alan F has long pointed out.

As I have said many times, no solution to the problem of input 
transformation is better than an unreasonable (backwardly causal) one.

What I did show in the last post however is that if one does not 
require the inputs to be transformed into the same unit prices of 
production as the outputs and further (what is really the same thing) 
one does not determine the input unit prices of production  as some 
multiple of the output PV ratios, then there is simply no reason why 
the transformation of the inputs would undermine the labor theory of 
value. It may be that total profit is no longer total surplus value 
after the inputs are transformed (total cost price could be more), 
but the value theoretic determination of r, the resolution of the 
contradiction between the average rate of profit and the law of value 
remain intact. Marx's theoretical conclusion remains logically 

It certainly deserves the right to be tested in the field of 
empirical practice, instead of being thrown out of the game before it 
is ever allowed up to the plate.

All the best, Rakesh

This archive was generated by hypermail 2b29 : Tue Oct 31 2000 - 00:00:11 EST