re Allin's 4570: >On Thu, 23 Nov 2000, Rakesh Narpat Bhandari wrote: > >> You said that surplus value, defined as total value minus the value >> of the inputs, would not be equal to the sum of profits in the final >> modified scheme. >> >> I then showed that your definition of surplus value could not be >> Marx's for it leads to an adding up theory of price. > >This is paradoxical. How can a definition on which surplus >value is explicitly a residual lead to an "adding up" theory? > >Allin C. Because you do not accept Marx's definition of surplus value as the residual once the cost price has been taken from total price, that is dM as M' minus M. You define surplus value as the residual after the value of the inputs has been taken from the value of the output. As I wrote in my 4559 (just slightly amended): Given your definition of surplus value as the value of the output minus the value of the inputs, surplus value and cost price cannot remain resolved, antagonistic components of total value but rather become (at least partially) independently determined magnitudes. You have glossed over my criticism. Ricardo allowed for the possibility of the price of wage goods rising due not only to their increased value as greater outlays of labor are needed for agricultural produce with the increasing cultivation of inferior lands but also to rising ground rent payments. Now as long as we are assuming that total value and the value of money remain constant, you would allow surplus value to be diminished only by the rise in the value of wage goods, not the rise in ground rent as well. To this only partially diminished surplus value you would then add on the increased cost price. So if we stick to your definition of surplus value--total value minus the value of the inputs--the sum of your (only partially modified) surplus value and (raised) cost price would in the classic Ricardian case no longer be the total price, as determined as the product of the value of the output and the monetary expression of labor value both of which we are assuming to be constant. You are led to break the labor theory of value here. If we have price determined by your sum, then a rise in cost alone has not lead to diminished surplus value alone but rather to partially higher prices. That is, your definition leads you to accept Smith's adding up theory of price. This is grossly antithetical to Marx's theory. Your definition of surplus value cannot be accepted as Marx's. Moreover, your textual support is weak. However, once we accept the definition of surplus as total value or price minus cost price itself, it becomes obvious that any modification of cost price--whether it results from the rising value of the input wage goods or increased ground rent or the *price* transformation of the inputs--implies an inverse change in the mass of surplus value as long as we are taking the value of the output and the value of money to be fixed magnitudes (which is exactly what Sweezy inititally did before he decided it was too mathematically complicated a problem). Once we accept the challenge of transforming the inputs in terms of a vector of equilibrium prices--which I am only doing for the purposes of argument--we have a more complicated problem at hand than B-S-M realized. The problem now is to have the mass of surplus value modified in inverse direction to the modification of cost price consequent upon the transormation of the inputs while at the same time having the sum of Dept profits determined by this (modified) mass of surplus value. If this can be done, then the second equality can be preserved. The first equality is already given by stipulation. This also means that there is no way to reduce the set of equations to three with three unknowns, as Sweezy had hoped for the purposes of mathematical tractability. I am happy to find however that the four equations which I propose are happily neither over- nor under-determined. I will stick to the assumption of simple reproduction. I argue that it follows from Marxian theory that once the value and the price of the total output are given, it is basic theorem of Ricardian-Marxian 'economics" that the difference between the modified cost price and the unmodified cost price is equal to the difference between the sum of the unmodified surplus value and the modified sum of surplus value. VALUES I c1 + v1 + s1 = c1 + c2 + c3 or C II c2 + v2 + s2 = v1 + v2 + v3 or V III.c3 + v3 + s3 = s1 + s2 + s3 or S IV (C+ V +S) - (C + V) = S PRICES OF PRODUCTION V c1x + v1y + r(c1x + v1y) = c1x + c2x + c3x or Cx VI c2x + v2y + r(c2x + v2y) = v1y + v2y + v3y or Vy VII.c3x + v3y + r(c3x + v3y) = r(c1x + v1y) + r(c2x + v2y) + r(c3x + v3y) VIII.(C + V + S) - (Cx + Vy) = r(Cx + Cy) Equations IV and VIII defines the sum of surplus value as total price which is being held invariant minus cost price; this then the determines the sum of profits, which is given on the right hand side. This set of transforamtion equations thus has the second equality built into them while the the so called first equality is given by stipulation. If this set of equations can be solved, then Marx's transformation procedure does not break down upon inclusion of the inputs even if we are assuming the burden of having to solve in terms of simple reproduction.
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