[OPE-L:4591] Re: Part of My Confusion on the Transformation

From: John Ernst (ernst@pipeline.com)
Date: Sat Dec 02 2000 - 16:01:36 EST

Thanks for the bit of clarity, Duncan (OPE-L 4590).

At 04:37 PM 12/01/2000 -0500, you wrote:
>I think Marx just didn't get that far. He seems to have been 
>following the Smithian theory of competition, which envisions capital 
>as moving from low profit rate sectors to high profit rate sectors. 
>As you've pointed out, when capital goods have long lifetimes, 
>there's always a major expectational or prospective element in 
>estimating the profit rate, so presumably the relevant profit rate 
>for this competitive movement of capitals would be a prospective, not 
>necessarily a realized profit rate. And technical change could make 
>the expectations very wrong. Perhaps this is one of the factors that 
>led the Classical political economists to view competition as a 
>gradual, imperfect tendency, that manifested itself in a 
>"gravitation" of prices around natural prices (or prices of 
>production) rather than as an attained equilibrium.

Given that we are to use an average RRI in computing prices
of production,  I'm still unclear and repeat my question.

"How do you compute the values that are to be transformed from a given
set of physical quantities?" 

In addition, I suspect that the standard correction of Marx will only
"work" in 
circulating capital models.


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