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>I would like to raise a new topic. That's fine, Paul C. But do note that for decades now critics like you have been accusing Marx of having suffered from a fatal logical defect to which only obscurantists can remain blind. This is a serious charge which has been made with absolute arrogance. I have tried to meet this argument head on, given the assumptions of the critics, viz. that the inputs have to be transformed into the same prices of production as the outputs. Nor have I denied that Marx did not include the inputs in his transformation procedure. Now I have won enough high school and college debating rounds and tournaments at the state and national level to know that you want to move on before responding to my counterargument. 1. I assume the unit of account is a unit of labor time. Ajit has cried that this is bloody arbitrary, but note that Bortkiewicz and Sweezy never claimed that it was any less justified than choosing Dept III's good as both the value and price unit, thereby setting p3 or z at 1. In fact Bortkiewicz and Sweezy themselves begin with my assumption, and Sweezy grants that it is a perfectly logical assumption in the handling of the transformation problem (see p. 117 and 122). In fact it is less arbitrary than assuming that Dept III is only gold production, and that since gold is the money commodity, Dept III can be set equal in the value and price schemes (look at the mental gymnastics Sweezy peforms to justify this assumption at the bottom of p. 117). 2. On the basis of this assumption of one hour of labor as the unit of account, Sweezy initially (and correctly) sets the sum of prices in the unmodified scheme equal to the sum of the prices of production in the modified scheme. He then has this invariance condition plus the three Dept transformation equations (see top p. 117). The reason Sweezy gives for not proceeding on this basis is not that this set of equations is incorrect (in fact I and many others have argued that it is the only invariance condition permissable in terms of Marxian theory) but rather that it is too mathematically complicated (4 equations, 4 unknowns), so he searches for a way to reduce the problem to 3 equations, 3 uknowns (p.117-18). 3. Meek then argues that proceeding this initial way is even more damaging to Marxian theory because the sum of profits will no longer in any meaningful sense be derivable from the predetermined sum of surplus values in the unmodified scheme (see Meek, Smith, Marx and After, also p. 117). 4. I argue that it is grossly antithetical to Marxian theory to suppose that if we are given a commodity output with a fixed magnitude of value or price (its monetary expression), a modification in cost price will not lead to an inverse modification in that predetermined sum of surplus value. Meek is simply wrong that the sum of surplus value should on the basis of Marxian theory remain invariant as the inputs are included in the transformation procedure. Total value is always broken down in Marxian theory into the components of cost price and surplus value which vary inversely. Since the complete transformation modifies cost price on the basis of the transformation of the inputs, it must allow for the mass of surplus value to be modified in the opposite direction if both cost price and surplus value are to remain inversely related, resolved components of total value, rather than independently determined magnitudes. This simply follows from Ricardo's critique of Smith's adding up theory of price. 5. This means that the complete transformation procedure in which the inputs are included is much more complicated than Bortkiewicz or Sweezy or Meek or Cottrell realize. For now we can no longer assume that we are simply distributing the same fixed magnitude of surplus value. The mass of surplus value will change in opposite direction to the change in cost prices brought about by the transformation of the inputs. We have to allow for this modification of surplus value while still having the sum of Dept profits set equal to this modified sum of surplus value. 6. Towards that end, I have proposed both a set of equations and a method of iteration by which a. the mass of surplus value remains derived entirely from unpaid labor, thereby not putting a chink in the theory of exploitation and b. the sum of profits in the modified scheme has been determined by the sum of surplus value. You have questioned the unit of account which I suppose, though you do not deny that for the purposes of the transformation it not unreasonable to assume that the unit of account is a unit of labor time; Allin has argued for a different definition of surplus value without proving that with his definition he will not be caught in adding up theory of price any time the cost price of a commodity is modified. You are of course free to ignore this message. But I don't take to being called an obscurantist lightly, and I don't think Marx's value theory is in the least damaged by completing the transformation so that the inputs are included. It may still be true that the neo Ricardian method for profit and price determination is superior due to its ability to handle joint production, the long life of capital goods and various other real world complications, but Marx's value theoretic transformation procedure does not collapse upon inclusion of the inputs. Yours, Rakesh

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