[OPE-L:5534] Re: Re: Re: Re: the assumptions necessary for the two equalities to hold?

From: Steve Keen (s.keen@uws.edu.au)
Date: Thu May 10 2001 - 07:02:06 EDT

Hi Fred and Rakesh,

Just an aside; as you might guess, I still remain a critic of this!

At 04:05 PM 5/10/01 Thursday, you wrote:
>re 5529
>>In this case, I think Marx's assumption of the prior determination of the
>>total surplus-value (in Volume 1) continues to hold.  The monopoly
>>industries would get more surplus-value, but the competitive industries
>>would get less.  The total surplus-value is not affected by this unequal
>>distribution of surplus-value, just like the total surplus-value is not
>>affected by the equal distribution of surplus-value.  This point was made
>>by Paul Mattick, Sr. in his critique of Baran and Sweezy's Monopoly
>>Capital back in the 1960s.  That is how I first learned about Marx's
>>assumption of the prior determination of the total surplus-value (prior to
>>its distribution) and about Marx's distinction between capital in general
>>and competition.
>>I look forward to further discussion.
>Fred, believe it or not, I agree with your argument about the prior 
>determination of surplus value (Steve K is the one who has been your most 
>important critic here). Remember you convinced me that the since the 
>inputs are already in the form of prices of production they do not have to 
>be transformed. What I am saying is that while indeed the magnitude of 
>surplus value is determined before its distribution through the formation 
>of prices of production, we cannot exactly know what the magnitude of that 
>mass is. In his transformation tables, Marx assumes that he can exactly 
>determine what the mass of surplus value is. He picks a rate of surplus 
>value out of thin air and then assumes that the value transferred from the 
>means of production is the same as their flow price. This allows him to 
>calculate a mass of surplus value for each branch and total capital. That 
>surplus value is then distributed.
>The point of my inverse transformation problem is that Marx had been wrong 
>to assume--as he himself underlined on p. 265--that he could calculate the 
>mass of surplus value by using the flow price of the machine. Strictly 
>speaking, we cannot infer the value transferred from machines from their 
>flow price since value is in principle unobservable and not directly 
>measurable. But this only enters an element of uncertainty into our 
>estimate of what the mass of surplus value actually is; it does not deny 
>that the total value surplus (whatever it exactly is) is a real magnitude 
>that is determined before distribution, and sets the limits within which 
>all capitals move.
>All we can really do is infer from output price data what the total mass 
>of surplus value that was determined before distribution was. We can then 
>make some estimate of what the rate of surplus value was and thus what 
>value was transferred gratis by the working class from the means of production.
>Now I also accept for the purposes of argument that the inputs are in the 
>form of direct prices. This is indeed not Marx's problem in vol 3. But 
>let's say we accept the Bortkiewicz/Sweezy problem and have to complete 
>the transformation on the inputs as well as the outputs. You refuse to 
>engage the critics on their own turf, but I am only doing so for the 
>purposes of argument.
>In this case--which is not Marx's--then I argue that only one invariance 
>condition (total direct price=total price of production) is compatible 
>with Marx's critique of the adding up theories of value; and while the 
>second equality (total surplus value=total profit) can indeed be 
>maintained in the complete transformation (this is most easily seen in an 
>iterative solution to the complete transformation problem which again is 
>not Marx's own), it cannnot on Marx's own assumptions be an invariance 
>Yours, Rakesh

Dr. Steve Keen
Senior Lecturer
Economics & Finance
Campbelltown, Building 11 Room 30,
School of Economics and Finance
s.keen@uws.edu.au 61 2 4620-3016 Fax 61 2 4626-6683
Home 02 9558-8018 Mobile 0409 716 088
Home Page: http://bus.uws.edu.au/steve-keen/

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