[OPE-L:4563] Re: Re: reply to Fred (1)

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Wed Nov 22 2000 - 12:06:50 EST

re: 4562

>But, Rakesh, this argument is completely irrelevant to my interpretation
>of Marx's theory. According to my interpretation, the cost price DOES NOT
>CHANGE as a result of the determination of prices of production.  Since
>the cost price does not change, there is no question of having to choose
>between whether a change of the cost price causes a change of total value
>or of surplus-value.  The cost price remains the same and so does the
>total value and the total surplus-value.  According to my interpretation
>(as I have argued before), NONE of the aggregate variabels change as a
>result of the determination of prices of production in Volume 3.  Since
>none of the aggregate magnitudes change, ALL of the aggregate equalities
>are true simultaneously.

Look, Fred, I received a jolt of excitement from reading your lucid 
and brilliant interpretation of how how the presuppositions are 
posited, how  in Capital 3, ch 9 Marx can finally explain to us that 
the inputs have always been given to us in the form in which they 
would have appeared in a market society (by the way, are you saying 
that Marx has the inputs given to us in real market prices or prices 
of production?) I think this interpretation is clever and brilliantly 

But I think it's wrong.

You seem to be admitting that Marx has until Capital 3, ch 9 only 
allowed outputs to exchange at value or that Marx has assumed that 
all outputs exchanged as if they were the product of capitals of 
average organic compositions (Paul Z has in my opinion convincingly 
argued that Marx had been working under the latter assumption).

So--you seem to be arguing--while taking the aggregate variables of 
total price and the sum of surplus value as already given,  Marx 
transforms the outputs in the second of his juxtaposed tableaux. This 
simply redistributes the already given aggregate magnitudes of total 
price and surplus value.

But why does Marx need to transform the outputs? Is it not because he 
has assumed that they have exchanged at prices determined by or 
proportional to their values? And if he has assumed this about the 
outputs, why hasn't he been assuming this about the inputs?  You of 
course disagree that Marx himself is underlining that he has been 
making this assumption.

Why would Marx rigorously control the exchange of outputs at (or 
proportional to)  value until volume 3 while always having assumed 
that the inputs exchanged at prices of production or real market 

Why this asymmetry?

If you can explain this to me, then I may well be willing to 
subscribe fully to the monetary-macro interpretation (of course for 
some on this list my assent would only damage you). I already think 
the macro part is a decisive and  most important contribution in 
understanding what Marx is doing, and found your replies to Steve K 
quite persuasive.

>Your argument is against the interpretations of Bortkiewitz and Sweezy and
>Meek and Allin and Duncan (for them the cost price does change; actually
>for Duncan, only the constant capital).  You are arguing with Allin, et
>al. about the appropriate "invariance condition" in the transformation of
>values into prices of production.  But according to my interpretation,
>there is no need to choose between these two invariance conditions.  Both
>conditions are satisfied simultaneously.
>Now, you of course disagree with my interpretation that the cost price
>does not change in the determination of prices of production, and we can
>continue to discuss this point.  But all your arguments about which
>invariance condition and the adding up theory of value (your "main
>point") are irrelevant to my interpretation.  Do you see what I mean?

You are correct about this.

>P.S.  The passages that you quote concerning Marx's critique of the
>"adding-up" theory of value are mostly from Part 7 of Volume 3.  It is
>certainly true that Marx argues in these passages that, if wages rise,
>then surplus-value will fall.  However, the rise in wages that Marx is
>talking about in these passages has nothing to do with the transformation
>of values into prices of production.  The rise in wages happens due to
>other causes.  Marx explicitly stated at the beginning of Chapter 49 that
>he was ignoring in this analysis the distinction between values and prices
>of production:
>"For the analysis now following, we can ignore the distinction between
>value and price of production, since this disappears whenever we are
>concerned with the value of labor's total annual product, i.e. the value
>of the product of the total social capital."  (p. 971)

However cost price is modified--whether it is due to the rise in the 
value of the input goods, an increase in ground rent or the price 
transformation of the inputs--surplus value has to move in the 
opposite direction once we are given a fixed magnitude of value (of 
course assuming m remains constant). I argue that this is implied, 
not directly stated, by Marx's acceptance of Ricardo's critique of 
Smith's adding up theory of price. Am I wrong?

Yours, Rakesh

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