[OPE-L:5127] transformation again

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Thu Mar 08 2001 - 18:03:11 EST

Allin and Andrew K have both correctly underlined that with my 
iteration in which total direct price is set equal to total price of 
production,  the sum of surplus value--defined on the basis of Marx's 
own words as total value, monetarily expressed, minus cost 
price--could turn out be greater in the price of production scheme 
than the direct price scheme.

They have then argued that since  live labor is putatively no longer 
necessarily the sole source of surplus value, I have undermined the 
exploitation theory of surplus value, which is obviously why Meek 
held invariant the sum of surplus value in the transformation, just 
as Allin did in the iteration which he sumbitted to the list.

But this specific criticism will not hold up (Allin has other 
criticisms about how I have defined surplus value and how I handle 

My iteration does no damage to the labor theory of value for several reasons:

1. If the cost prices are reduced by the transformation such that the 
inputs sell below value, the sum of surplus value will not be 
increased thereby *unless live labor transfers gratis the value of 
those means of production to the output*. The source of surplus value 
remains live labor.

2. in my iteration the exploitation of live labor remains a necessary 
and sufficient condition for the production of surplus value. For if 
there were no surplus value in the direct price scheme, there could 
be no transformation.

3. In my understanding, Marx did not argue that inputs selling below 
value can never contribute to an enlargement of surplus value. He 
said that on a systematic basis this could never be a secure source 
of surplus value. And my iteration confirms that since only in truly 
freak and practically irrelevant conditions in which dept III is 
inordinately large and much more relatively capital intensive could 
the sum of surplus value be enlarged through the transformation. My 
iteration therefore stengthens the thesis that the expansion of 
capital depends in practical terms on newly produced value by live 

4. even in the case in which the transformation allows the sum of 
surplus value to be enlarged, surplus value remains derived 
*entirely* from unpaid labor.

So as long as one chooses the correct invariance condition--which 
Sweezy did not solely on the grounds that the mathematical problem 
was too tough--it's possible to show that labor theory of value and 
surplus value is not damaged by the inclusion of the inputs in the 

Yours, Rakesh

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