[OPE-L:4618] Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Part of MyConfusion ontheTransformation

From: Ajit Sinha (ajitsinha@lbsnaa.ernet.in)
Date: Wed Dec 06 2000 - 00:35:35 EST

Rakesh Narpat Bhandari wrote:

> re 4616
> >On Tue, 5 Dec 2000, Rakesh Narpat Bhandari wrote:
> >
> >>  Marx is not allowing the value of money to change  before the
> >>  transformation; and he doesn't allow it to change in the
> >>  transformation.
> >[snip]
> >>  Marx does not think that there is actually an invariable standard
> >>  of value. This is why he has to invent the constant reference point,
> >>  fully aware that it is a purely fictitious assumption.
> >
> >Rakesh, you haven't taken on board Ajit's point.  There are
> >theroretical situations where it's OK to make the "fictitious
> >assumption" that the value of money is constant, and other
> >situations where this assumption just doesn't make sense (at any
> >rate, without recognizing and spelling out the further
> >commitments this assumption entails).
> >
> >Thus at the level of Vol. 1, when Marx is talking about the
> >prices of commodities changing due to changes in technical
> >conditions (with prices = values), it's perfectly OK to assume
> >that the value of money isn't changing at the same time (this is
> >just saying that there's no technical change in gold production,
> >that the labour time required to produce an ounce of gold
> remains constant).
> Allin,
> There is every possibility that I am missing the point; all the
> subtleties and curiosities of a measure of value and a hypothesized
> invariable measure of value are quite perplexing, and will certainly
> take a sharper mind than mine to analyze.
> As HG has it, Marx is saying that (1) the variability of the measure
> of value, or of money, is only one of the causes of price changes.
> Such changes can just as well stem from causes that lie on the
> commodity side of the exchange relationship. And of these latter
> changes, one can be the consequence of  (2a) actual change in value
> (the case in which Marx is initially interested) and the other (2b)
> can stem from imbalances in supply and demand.
> It seems that we are all agreed that Marx is ruling out 1 and 2b in vol 1.
> >
> >
> >When you're talking about the transformation, however, a
> >constant "value of money" in the above sense is insufficient to
> >ensure that the aggregate price of commodities remains constant.
> >You need money to be invariant in a stronger sense: namely, that
> >it's immune to the transformation.  This can't just be "assumed"
> >without cost: it would require that the money commodity is
> >produced under conditions of average organic composition (or
> >something of the sort), thus confining any results obtained to a
> >special case.
> Well, to use Ajit's language, it all depends on what Marx's
> problematic in Capital 3, ch 9. is.
> Marx's second tableau (p. 256) obviously shows, as Gouverneur has
> pointed out, that in his own transformation procedure Marx holds not
> only the total value of the output but also the value of money
> constant; otherwise he could not have equated the sum of simple
> prices which is total value * monetary expression of labor value in
> the first tableau with the sum of prices of production in the second
> tableau. Marx has to be assuming the invariance of m (Gouverneur uses
> E) or he could not have set the two sums of price equal to each other.


That is why every sensible person on this planet thinks that Marx has a
transformation problem. It is simply theoretically illegitimate to hold the
value of money constant. I don't have as much stamina as Rakesh to go on with
this ad nauseam. So most likely i won't say anything on this for sometime.
Cheers, ajit sinha

> Now if Marx's "problematic"  here had been to demonstrate that prices
> should remain invariant in the face of distributional shifts, we
> could say that he has begged the question. If Marx's problematic had
> been to provide a determinate price theory, we could say that his
> attempt has foundered by ruling out changes in the medium in which
> price has expressed.
> But since Marx's problematic here is only to provide at the most
> abstract level an analysis of how the law of value cannot govern
> bourgeois society directly but rather only in the very form which
> seems to contradict it, it seems to me that it is perfectly fine for
> him to ignore the complex and curious effects on relative and even
> total prices the inclusion of the money commodity into the
> transformation procedure would have. Marx is not interested in
> determining prices here but resolving the Ricardo/Malthus debate on
> whether the principle of the average rate of profit modifies or
> contradicts the law of value. That is the "problematic" in the
> analysis of which it remains legitimate to hold the value of money
> constant.
> Yours, Rakesh

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