# [OPE-L:4598] Re: Re: Re: Part of My Confusion on the Transformation

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Mon Dec 04 2000 - 02:15:35 EST

```Ajit,

I understand that you think the transformation procedure needs a
numeraire like the standard commodity (if I understand Meek) so that
there is aggregate price invariance of the total output with
distributional shifts.  So you won't allow me to read Marx as having
fixed that the monetary expression of value before the original
tableau (you said that I was a faux scholar to have assumed that this
is how Marx was proceeding).  But of course Marx was assuming such a
fixed value of money (you said that I took the quote out of context;
I have more for you if you wish); perhaps in ch 9, Marx has assumed
that the unit of account is  an hour of labor time, as Sweezy finds a
reasonable interpretation. But something like this has to be correct;
otherwise Marx would not have set the sum of simple prices (or
values) in his first tableau equal to the sum of prices of production
in the second tableau.

You said you want go any further unless I drop this assumption; will
you reconsider since I am simply beginning with the same assumptions
and equations Sweezy gave us. I don't think Paul C or Allin think
that the assumption regarding the unit of account is terribly
unreasonable, especially as an interpretation of Marx's own procedure.

The original simple price, simple reproduction situation
(1) c1 + v1 + p1 = c1 + c2 + c3
(2) c2 + v2 + p2 = v1 + v2 + v2
(3) c3 + v3 + p3 = p1 + p2 + p2

Transformation equations for prices of production.

(4) (1 + r) c1x + v1y = x(c1 + c2 + c3)
(5) (1 + r) c2x + v2y = y(v1 + v2 + v3)
(6) (1 + r) c3x + v3y = r[(x[c1 + c2 + c3]) + (y[v1 + v2 + v3])]
(7) (c1+c2+c3+v1+v2+v3+p1+p2+p3) - [x(c1 + c2 + c3) + y(v1 + v2 + v3)] =
r[(x[c1 + c2 + c3]) + (y[v1 + v2 + v3])]

My equation seven defines on the left hand side surplus value as the
invariant total price (the first term) minus cost price (which itself
is modified by the transformation procedure); this is then set equal
to the sum of branch profits as they appear on the right hand side.

As I have been trying to explain I do not think the mass of surplus
value should remain invariant in the complete transformation as cost
price is modified.

There is no doubt that in Marx's *incomplete transformation* he holds
total total price, total cost price and total surplus value invariant.

But I argue that it was not Marx's idea that if we were going to keep
the first fixed (total price) and modify the second (cost price) that
the third (total surplus value) should remain fixed too. After all,
Marx never did the complete transformation and even assuming that he
would have accepted a simultaneous approach, he never specified what
should remain invariant in this complete procedure.

Allin tried to tease out the implicit definition of surplus value in
the way he carried out the iteration, and I do not think he has
denied his definition (value of the outputs minus the value of the
inputs) leaves him unable to fend off an adding up theory of price.

How does my set of equations not maintain the second equality? How is
surplus value to be defined?

Would you at least consider giving me your textually based
understanding of what Marx's *definition* of surplus value is?

Thanks, Rakesh
```

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