[OPE-L:6290] Re: Re: recent science and society and Fred M's interpretation

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Sat Jan 12 2002 - 10:44:13 EST

>Hi Rakesh!
>1. Do you have a brief presentation of your "inverse transformation

Alejandro, Fred argues that the mistake that Marx was pointing to on 
p. 265, Capital 3 is the false assumption that the cost price of the 
commodities is proportional to their value (P<>V). Fred says that 
Marx was trying to ensure that readers did not continue to assume 
this; but then Fred also argues that after underlining the 
disproportionality between the cost price of commodities and the 
value of the inputs, Marx does not admit to any mistakes in the 
transformation tables that he had constructed earlier in the chapter. 
The tables are fine as they are; there is no reason to complete or 
correct them, according to Fred. Just don't assume the value of the 
inputs is proportional to the cost price. Marx is just trying to free 
us from mental error; he's not pointing to any mistakes or 
incompleteness in his own tables.

I disagree but not for the traditional reason.

I am arguing that Marx is himself underlining a mistake in his own 
tables. The problem is not that the inputs are in the form of values 
of simple/direct prices and need to be transformed along with the 
outputs into identical prices of production--the standard 
interpretation your and Fred's critique of which I accept!

  The problem however is that in the tables Marx had assumed that the 
value transferred from the means of production is the same as the 
flow *price* of the machine, which Marx records in the consumed c 
column of his tables.

But upon completion of his tables Marx has shown why the price of 
production of the outputs has to be disproportional to their values.

Well this implies a second reason for divergence since  the values of 
the inputs should not now be identified with their price, but in 
determining the value transferred from the means of production  in 
his transformation table Marx had indeed assumed that the value 
transferred can be identified with cost price of the used up means of 
production. He was wrong to make that assumption, and this is what I 
am calling the inverse transformation problem.

Strictly speaking then we do not know how much value was transferred 
as a result of using up the means of production and thus we do not 
know the value of the respective commodities. The hiding of labor 
time relations after all is inherent in fetishistic price form.

Marx does not think this error is of great import because whatever 
the value of the used up means of production and thus the value 
transferred to the output, the output will have greater value (as 
monetarily expressed) than the cost price of the commodities, and 
that total mass of surplus value will still tend to proportioned 
according to the capital advanced.

Marx's admission of an inverse transformation problem--viz., his own 
faulty  assumption built into his transformation table that we can 
identify the value transferred from the means of production with 
their visible flow price or cost price--changes nothing about the 
mechanics of how, formally speaking, the average rate of profit is 
formed out of the collective exploitation of the working class by the 
collective of capitalists.

So quite correctly Marx does not bother with fixing the tables 
because they have served their purpose quite well. Marx has shown 
that not only does the formation of an average rate of profit not 
contradict the law of value, its magnitude can only be explained on 
the basis thereof.

And strictly speaking Marx could not fix the tables, anyway, as it is 
impossible to know beneath the fetishistic price form what the real 
value of the used up means of production was and thus how much value 
was transferred from them to the commodity output in the respective 

There is the same problem in how Marx posits the rate of 
exploitation. Let us say that when Marx wrote up the tables he made 
the assumption that each wage good allows the capitalist to extract 
labor time of twice the value of the wage good. That is, Marx makes 
the assumption of a rate of exploitation of 100%. But now we know 
that wage goods could have above value, which means that Marx has 
overestimated the rate of exploitation in his tables. Or wage goods 
may have sold below value, which means that Marx has underestimated 
the rate of exploitation.

Well I'll leave it here for now, and get to the problem of double divergence.

I am arguin for the inverse transformation interpretation because it 
makes sense of double divergence and shows why and how Marx had gone 
wrong in constructing his tables. That is, I am arguing that my 
interpretation gives a more persuasive reading of p. 265 than Fred's 
interpretation allows.


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