[OPE-L:4470] Re: Re: Re: Re: Re: Re: what is Volume 1 about?

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Mon Nov 06 2000 - 16:31:07 EST

re 4468

>On Mon, 6 Nov 2000, Rakesh Narpat Bhandari wrote:
>>  In the B-S-Cottrell models, the first two Depts have a relatively
>>  higher OCC than Dept III. The equalisation of the profit rates means
>>  then that their prices rise relatively. Since these two depts provide
>>  the inputs for all depts, cost prices are raised by the equalisation
>>  of profit rates.
>>  This now means total value is resolved into
>>  (1) (cost price + a) + (surplus value - a)
>This move makes total profit = total surplus value by

No, it does not. Out of the total value which is resolved into the 
sum of surplus value, total profit makes up only one part, interest 
and rent the other.

At any rate...

We know that surplus value is defined as M 'minus M. What does this 
mean other than that the M' which is not resolved into cost price (M) 
is resolved into surplus value.

Surplus value is a *monetary* category (M' minus M) into which total 
value has been partially resolved.

  Total value (C) is a labor time category determined by the addition 
of indirect (value of the means of production) and direct (newly 
added value) labor.

The latter includes both the replacement of variable capital and the 
surplus value. Surplus value then depends on the magnitude of c+v (k 
), the cost price which is taken from C.

s= C - k.

>  It also makes "total surplus value" come apart
>from total surplus value in the original value table,

First you transformation critics can't even get straight why this 
should not happen: you and Meek say it's in order to preserve 
determination of total profit by the sum of surplus value (I have 
shown by the way that my iteration does this both in a quantitative 
and substantive sense) ; Borkiewicz and Sweezy hold surplus value 
invariant in order to preserve the unit of account as 1.

A little clarity about what you are saying and doing would be appreciated.

Second, nothing is coming apart. Marx presents it as simple Ricardian 
economics that a change in cost in itself cannot change the value of 
the commodity, only the surplus value which it represents. We have 
the same system, in which the costs are explicitly being changed.

The question should have always been how this change in costs due to 
the transformation of the inputs affects the mass of surplus value 
which is available for distribution in the form of the uniform rate 
of profit and how the resultant change in the profit rate then 
affects relative prices.

If the problem had been posed properly, as I am doing here for the 
first time, there would have never been a transformation debate.

Remember it was Marx who said one  one could wrong if one left the 
cost prices unmodified. What exactly do you think he thought the 
problem may be?

Assume that Dept I and II have a higher OCC; then profit rate 
equalisation means together they'll sell above value. Since their 
outputs are the inputs for the system as a whole, this means that 
Marx has determined r in terms a greater sum of SV/lesser total cost 
prices. Marx had a clear awareness that such corrections  would 
follow upon the transformation of the inputs.

The changes in the system upon the modification of cost prices  in no 
way undercuts that the (modified) profit appropriated is derived 
ENTIRELY from the *unpaid* newly produced value by labor.

There is not a single chink in the exploitation theory by completing 
the transformation even by equilibrium methods antithetical to 
Marxian dynamics: simultaneous equations and iterations.

>  total
>surplus value in value terms.

Again:  what is in value terms is C: value of the reappearing 
constant capital + newly produced--not surplus--value. (see Capital 
3, p. 119).

This C is then resolved into cost price + surplus value (itself the 
source of all forms of revenue, total profit being only component).

You simply don't understand the difference between the determination 
of value and its resolution. But it is this difference that 
undergirds the entire critique of fetishism at the end of both 
Capital 3 and TSV 3.

>  Thus it just displaces the
>problem, rather than solving it.

There is only a problem because for 100 years people have not worked 
with the proper definitions and specifically an understanding of the 
difference between value determination (or production) and value 
resolution (or its breaking down into cost price and surplus value).

  I am trying to set the record straight so Marxist economists don't 
have to embarrass themselves for another 100 years, though the hope 
remains that they will be swept away before then by revolution.

>>  For example, Marx discusses how "the increase in wages would affect
>>  the unpaid part of total labour, and with this the SURPLUS
>>  VALUE...The SURPLUS VALUE, firstly, falls by a third of its former
>>  amount, from 150 to 100." (see Capital 3, p. 995 vintage). That is,
>>  since total value is resolved into cost price and surplus value, an
>>  increase in the former due to a rise in the wages leads to a fall in
>>  the latter.
>This is irrelevant to your claim.  Of course a rise in wages
>(cet. par.) reduces surplus value, since it raises the necessary
>labour-time and cuts into surplus labour.

Irrelevant as it may be to me, this quote is devastating to your 
interpretation because the passage unequivocally shows that for Marx 
cost price and surplus value move in inverse direction. Since the 
complete transformation means a modification in the former--which you 
of course have not even tried to deny--it has to mean a modification 
in the oppposite direction in the latter.

If it did not, then you would be left simply adding up independently 
determined sum of cost prices and sum of surplus surplus value (which 
is exactly what you did do in your iteration), instead of treating 
total value as fixed magnitude which is prior to and determinative of 
that into which it is resolved: cost price and surplus value.

With your knowledge of Ricardo, one would have thought you would have 
been making the point, instead of me.

Yours, Rakesh

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