[OPE-L:4412] 2 equalities, one invariance condition

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Thu Nov 02 2000 - 10:54:40 EST

Once cost prices are modified, capitalists will first take from total 
value what is needed to cover their modified cost prices. This 
changes the sum of surplus value which is available for 
redistribution in terms of a uniform profit rate; however, this 
modified mass of surplus value still determines the sum of branch 
profits. This maintainence of the second equality is given in the 
equation system which I propose.

I have not in any way  relaxed the value determination of the profit 
rate simply because after the modification of cost prices, the 
magnitude of the surplus value in terms of which branch profits is 
determined has changed (surplus value after all is total value minus 
cost price).

For example, in my equation system the sum of surplus value is first 
*modified* on the left hand side by subtracting from total value the 
new input/cost prices; I then have this modified mass of surplus 
value determine the right side of the sum of branch profits (assumed 
to be distributed uniformly).

In the iterative method this logical sequence is even clearer, so the 
iterative method is superior for demonstrating the point.

  After the modification of cost prices through the application of 
output PV ratios on the inputs, we are left with a different sum of 
surplus value which is now total value, less than this modified cost 

In Gouverneur's iteration it is in fact this modified sum of surplus 
value, divided by modified cost prices, that determines in an 
asymmetric, macro manner first the average price rate of profit and 
then each branch's profits in price terms. After each iteration the 
mass of branch profits is equal to the mass of surplus value.

It is simply a fallacy, implied by Sweezy and Allin,  that if 
throughout the transformation (or iteration) one does not maintain as 
invariant the profit rate or the sum of surplus value derived from 
the unmodified so called value scheme,  one necessarily undermines 
Marx's macro, asymmetric theory of value determination of economic 
magnitudes or breaks one of the two equalities.

But...after no single step in Gouverneur's (or my proposed 9 step) 
iteration is the sum of profits not determined by the modified sum of 
surplus value; at no point has any other data than the original so 
called value magnitudes been used to determine economic magnitudes 
(this is brilliantly implied by the iterative method!);  at no point 
do the prices of production exceed the the system's total value which 
should not indeed change since we are only changing the outward price 
appearance of the system, not the direct and indirect labor which the 
commodity output embodies.

So the equality of the sum of surplus value and sum of branch profits 
does not imply that sum of surplus value or profit rate should remain 
invariant as do total value/price.  Nor it is implied that if they do 
not remain invariant that Marx's macro, asymmetric, value theoretic 
determination of price phenomena has in any way been undermined.

The iteration does no harm to Marx's value theory while 
substantiating his intuition that one will go wrong in the 
determination of the profit rate and prices of production if the cost 
prices are left unmodified.

My equilibrium solution to the transformation problem is simply the slogan:

*2 equalities means 2 invariance conditions. Not!*

my other non equilibrium slogan was:

*the inputs and outputs at identical prices of production? What kind 
of static shit is that?!*

I have t-shirts for sale. Only 10% more for both slogans on the 
front, with a beautiful picture of an arm and hammer busting an 
armchair on the back.

Yours, Rakesh

ps there is another one in the making: it has the faces of 
Bortkiewicz, Sweezy, Samuelson, Sraffa, Steedman and written below 

"The Transformation Problem: A Great Comedy of Error."

If you order now, you can have your t shirt before the next 
conference of that oxymoron of Marxist economists. All proceeds will 
go to aid war veterans seizing back their land in Zimbabwe.

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