[OPE-L:4484] wrong question, wrong answer

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Thu Nov 09 2000 - 01:52:11 EST

What is the question to be asked as we reach Capital 3, pp.264-65 (Vintage)?

The economists, radical, Marxist and neo classical alike ask: Can a 
"value scheme" be transformed into a complete "price of production 
scheme", inputs and outputs included, while stipulating three 
invariance conditions:  total value=total price, the value rate of 
profit=the price rate of profit and the sum of surplus value=the 
price sum of profits?


Marx himself asked: How would the modification of cost price upon the 
transformation of the inputs from simple money prices to prices of 
production change the available mass of surplus value which is 
distributed in the form of a uniform rate of profit   and thus compel 
correction of the initial determination of the output prices of 
production in terms of a profit rate now calculated on the basis of 
the modified sum of surplus/ the modified cost prices?

As I have argued, the first question could never have been formulated 
by Marx: Marx would not have thought that one can keep total value or 
price (its monetary  expression) as a fixed magnitude and change 
costs by "transforming the inputs" without changing surplus value in 
the opposite direction.

  That the upward modification of cost prices yielded by the 
Bortkiewicz-Sweezy transformation of the inputs implies that the mass 
of surplus value has to be reduced, i.e., not remain invariant, is 
exactly what the labor theory of value implies.

After all, the reduction in the mass of surplus value only means 
capitalists cannot escape the pressure of increased costs (here 
brought about a change in the prices of the inputs in the "complete" 
transformation examples ) simply by adding on to these upwardly 
modified cost prices the old mass of surplus value and having final 
prices thus rise even as the value of that output does not itself 

If this were possible,  then capitalism would truly not be 
characterized by class conflict. Smith would be correct and Ricardo 
wrong, and Marx would have been wrong to sniff around in Ricardo's 
system for a correct theory of surplus value and class conflict.

Only if capitalists could deal with upwardly modified cost prices in 
the manner these "solutions" do! Raising total price until the mass 
of surplus value remains the same despite rising costs! Indeed...

The central question of technical Marxist economics for the last one 
hundred years is not even one which can  be formulated out of Marx's 
own theory, properly understood.

The idea that the first question is  Marx's own arises out of 
"experts" reading commentary on Sweezy's reading of Bortkiewicz, 
instead of reading Marx.

The reign of error has to come to an end.

Yours, Rakesh

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