more on the one invariance condition

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Thu Nov 02 2000 - 12:46:23 EST

>On Wed, 1 Nov 2000, Rakesh Narpat Bhandari wrote:
>>  Now Allin objects that I have preserved the two equalities by
>>  trickery. But it makes no sense to read the second equality as also
>>  an invariance condition.
>>    It would make no sense to keep the mass of surplus value invariant
>>  with total value as we modify the cost prices since Marx defines
>>  surplus value as total value minus cost price.
>As I've said before, I don't accept that the above is Marx's
>"definition" of surplus value.	It's a derivative statement of
>what surplus value amounts to, good only on the assumption
>that cost price = value of inputs.

the underlying argument is clear here.

after the transformation of the ouputs, we

(1)total value=>sum of prices of production
(2)mass of surplus value=>sum of branch profits.

The putative problem now is to transform the inputs such that not 
only do the above two macro, asymmetric determinations  hold but the 
magnitudes of the sum of the prices of production, sum of branch 
profits and rate of profit remain as they were determined in the so 
called value scheme.

The two macro asymmetric determinations are thus claimed to be two 
invariance conditions as well. Or three if we count the so called 
value rate of profit.

Since we are not changing the indirect and direct labor in the 
system, I agree that total value remains invariant and that the sum 
of the prices of production should remain determined thereby. This 
gives us one asymmetric determination and one invariance condition 
for the solution of the problem. That is, in the completed 
transformation not only must the sum of production prices remain 
determined by total value; the total value by which it is determined 
remains invariant from the unmodified scheme.

I now argue that maintainence of the second asymmetric determination 
does not imply that it too must be turned into an invariance 
condition. All vol 3 textual evidence suggests that Marx defined 
surplus value as total value minus cost price (or total capital 
advanced or value of capital advanced, never as the value of the 
input means of production and wage inputs); therefore, if cost price 
is modified due to a transforming of the price of the inputs, so 
should the available mass of surplus value and the rate of profit 
determined in terms of it (now modified mass of surplus 
value/modified cost prices) be modified.

Yet if one does not hold invariant the mass of surplus value and rate 
of profit as derived from the so called value scheme--and this seems 
to be your underlying point, Allin--then how can one say that the 
economic magnitudes in the completed transformation tableau have been 
determined by value? Have we not given up value determination?

I argue that this is not true.

In the Gouverneur-Bhandari iterative method, it is the modified mass 
of surplus value which is determined prior to, and then itself used 
to determine, the modified average price rate of profit and then the 
sum of branch profits such that its sum remains determined by the 
mass of (modified) surplus value. The asymmetric value theoretic 
determination implied in (2) is maintained in each stage of the 
iteration and in the final, equilibrium state.

That two false invariance conditions are not met (invariance of the 
mass of surplus value and the so called value rate of profit for the 
postulation of both of which there is no textual evidence in Marx) in 
no way implies the violation of the second asymmetric determination. 
This is my (I believe) original argument.

Both asymmetric determinations hold in the iterative process. We are 
left not with the unexpected collapse of Marx's macro, asymmetric, 
value theoretic determination of economic magnitudes (Moseley) but 
rather with a demonstration that Marx was correct that it is possible 
to go wrong in the determination of the average rate of profit and 
prices of production if the cost prices are left unmodified.

Again, I subscribe to the iterative process only to meet objections 
on the enemy's terrain of equilibrium. I do not think the output's PV 
ratios should be applied to the inputs, as Gouverneur seems to think. 
Marx was correct to recognize that the inputs would have to be 
modified and leave it at that.

Yours, Rakesh

This archive was generated by hypermail 2b29 : Thu Nov 30 2000 - 00:00:04 EST