# [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
>construction.

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

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
```

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