[OPE-L:4533] Re: Re: Re: Marxist economists

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Wed Nov 15 2000 - 23:39:13 EST

Paul C wrote in 4524

>I dont see how you simultaneously hold selling prices fixed, whilst
>cost prices change.

Not holding *relative* selling prices fixed.

>Surely the cost prices have only changed because the commodities
>have been sold at a different price?


>Whether prices of the aggregate output should change is a quite
>different question. If denominated in gold, one should expect them
>to change if the exchange value of gold changes in the transformation
>process. If one is using paper money as ones unit of account,
>then one simply renormalises to compensate for changes in the
>value of money - since the exchange value of the unit of paper currency is
>external to the theory.

Use the unit of labor time as the unit of account--Sweezy grants this 
is a perfectly plausible option (p.122).  Then since we are not 
changing the total value at any point in the transformation, the 
simple prices in the unmodified scheme will equal the sum of 
production prices in the modified scheme. We have the invariance 
condition, and the four equations which I propose can be solved. 
Moreover, proceeding this way allows us to see clearly the point of 
the exercise--the divergence of relative prices in the modified 
scheme from relative "values" in the unmodified scheme brought about 
by the equalisation of the profit rate.

Yours, Rakesh

This archive was generated by hypermail 2b29 : Thu Nov 30 2000 - 00:00:05 EST