# [OPE-L:4797] Re: Re: Re: modified significance of the cost price

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Sat Jan 27 2001 - 14:34:54 EST

Fred, I am truly sorry for misrepresenting you. Months ago, I asked
you to lay out your formula for value determination. There was not a
reply. In a very recent  post you had argued that cost price remains
the same in the formula for value and price of production. This meant
that you had proposed this formula for value determination:

(1) k + s => V

I on the hand think Marx only at times represents value this way:

(1a) V = k + s

You  agree that (1) cannot be strictly correct as a formula for value
determination, and reasonably argue that this has been implicit in

Now my interpretation of value is indeed a monetary one through and through.
For me a commodity simply does not have value unless it is sold (even
inventories are in a superposition until collapsed by monetary
measurement!). If the commodity is sold, only then does it has value
(V), the monetary expression of which (W) depends on the value of
money or rather its inverse.

(2a) Lmp + Lc => V
(2b) Vm => W (implies V<>W, where <> means proportionality)
(2c) W => k + s

so in (2c) that value as monetarily expressed (W) is then resolved
into cost price  and surplus value. Surplus value is thus a
monetarily expressed residual once cost price has been taken from
total value, as monetarily expressed. (Of course it follows that a
rise in k, ceteris paribus, means a equal fall in s--this is the
practical meaning of Ricardo's critique of Smith's adding up theory
of price.)

I still think my three criticisms apply to your formula, so I'll
await your next post. Moreover, I am quite unclear as to how you are
defining constant capital. And like Allin,it seems to me that your
interpretation simply collapses price and value.  I just wanted to
clarify here that my interpretation has a stronger monetary side than
I think you are recognizing.

All the best, Rakesh

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