# [OPE-L:4449] Re: Re: Re: two schemes?

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Sun Nov 05 2000 - 14:56:08 EST

```Ajit,

In the first place your argument does not speak to my criticism of
the way the transformation problem is posed.

It's perfectly possible for me to allow gold production to be Dept III.

(1) c1 + v1 +s1 = c1 + c2 + c3 (C)
(2) c2 + v2 +s2 = v1 + v2 + v3 (V)
(3) c3 + v3 +s3 = s1 + s2 + s3 (SV)

the set of transformation equations is:

(4) (1+r) c1x + v1y = Cx
(5) (1+r) c2x + v2y = Vy
(6) (1+r) c3x + v3y = r(Cx + Vy) or (SVz)

The invariance condition of course is

(7) (C + V + SV) = (Cx + Vy + SVz)

We have as many unknowns as equations (4) - (7).

Sweezy makes a very convoluted argument why it makes sense to set z
at 1.0 (I can't follow it), so he can attempt a solution only on the
basis of (4)-(6). With z at unity there are three unknowns and three
equations. But the solution  leads Sweezy to break the invariance
condition. Allin's iteration was the same solution with the same
result.

I allow for z not to be 1.0 and keep the invariance condition.

It has been argued that if z is not 1.0, then the two equalities
cannot be maintained and Marx's procedure breaks down (though Sweezy
does not set z at 1.0 in order to preserve any equality). I do not

The completed transformation exercise allows  c and v, as inputs, to
be transformed. This means it allows for cost prices (c + v) to be
modified. That's the point of completing the transformation after all.

Following Ricardo, Marx argues that a change in the cost of a
commodity does not change its value, only the surplus value which it
embodies. Commodity value is prior to that which into which it is
resolved: cost price + surplus value. Since we are not changing the
total value of commodities in the transformation exercise, a
modification in cost price must lead to the same modification in the
surplus value in the opposite direction.

So I think the very point of completing the transformation by
allowing the inputs to be transformed and cost prices thereby
modified is to determine how the mass of surplus value changes as a
result of this modification of cost prices.

This means z cannot be stipulated as 1.0.

I would truly appreciate if you would explain to me why it has been
thought otherwise.

Yours, Rakesh

p.s. As for holding the value of money constant, I am not sure where
you think Marx gives up money as a constant reference point in his
analysis. But I'll respond to your reply below in a separate post.
```

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