[OPE-L:4699] lovely appeal-to-authority-cum-ad-hominem-attack-on-Marx

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Thu Dec 14 2000 - 17:31:25 EST

re 4698

>  A variant of this that has
>been floating around this list recently is the lovely
>appeal-to-authority-cum-ad-hominem-attack-on-Marx launched by
>Sinha:  "every sensible person on this planet thinks that Marx has
>a transformation problem."

Hi Andrew (K),
If I remember correctly, Ajit was implicitly taking issue with 
Sweezy's "ok" to use the unit of labor time as the unit of account in 
the so-called price scheme as a way of keeping the equality between 
the totals in the so called value and price scheme. Makoto Itoh has 
expressed the same criticism (Basic Theory of Capitalism, p 
214--which Paul B seems to have edited).

Like you (I think), I don't think there is a value and price scheme 
but a simple price and price of production scheme (Makoto does not 
find this unreasonable on p. 219). By simple or direct price, I mean 
prices proportional to value (P <> V).  The simple (or direct) output 
prices in Marx's first table are already an expression of labor 
values * the monetary expression of labor values (MEL). Since in 
Marx's second table he changes neither labor values nor the MEL 
thereof, he keeps the equality between the totals in the simple price 
and price of production scheme.

  If we understand Marx's transformation as one from simple or direct 
prices (rather than values) to prices of production only for the 
purposes of determining how the principle of the average rate of 
profit modifies the form in which the law of value asserts itself, 
then we basically need to identify the same system in the state of 
simple prices and prices of production (Paul C has made this point 
well).  So that we can see the same system in two different states, 
Marx then assumes that the totals of simple price and price of 
production will remain the same--which of course means that he is 
assuming a constant monetary expression of labor value.

So for his own purposes not of developing a realistic price theory 
but demonstrating the change in the form in which the law of value 
asserts itself, I don't think Marx was insensible at all in assuming 
a constant MEL.

I find misplaced Ajit's argument that the monetary expression of 
labor value has to be allowed to change at this point in Marx's 
argument-- this only muddies up the specific question; Allin seems to 
agree with Ajit. They are saying  that Marx committed two great 
errors in his transformation procedure: he left the inputs unmodified 
and left out the unit of account (while subscribing to a commodity 
theory of money).

By the way, I do find it persuasive (or at the very least utterly 
reasonable) that Marx has assumed that the cost prices in his tables 
are already given preconditions, which is the money which capitalists 
had to lay out for constant and variable capital. As you know, I do 
still have an objection to your and Alejandro's and Fred's 
interpretation at this point. Because Marx begins and constructs his 
first table with the assumption of P <> V, then Marx makes the error 
of assuming that the prices which capitalists have paid for the means 
of production can be equated with their value, as they are consumed 
and reappear in the final product. But this error does not lead to 
the transformation problem, and it does not sanction the use of 
simultaneous equation to transform the inputs and outputs into 
identical unit prices. So this seems to be a minor disagreement.

All best, Rakesh

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