Re: [OPE-L] questions on the interpretation of labour values

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sat Mar 24 2007 - 13:47:09 EDT

>The TP is the logical contradiction that results *when* the inputs are
>also transformed like the outputs.

No the traditional TP assumes not that the inputs should simply be
transformed but that they should be transformed into the identical
prices of production as the output

>In this context, I have a question for you: do you reject simultaneous
>determination as a legitimate method of inquiry?

Can't teach us anything about actual dynamics as technological
progress and product innovation are key features. With simultaneous
determination, outputs have to be the same qualitatively and
quantitatively in terms of pop as the inputs. This is not realistic.
So yes not a legitimate method of enquiry of the real object that is
capitalism but even if there is some logical gain Shaikh's iterative
solution vindicates; no real change in mass of surplus value anyway.

>Andrew Kliman does in his recent book. And so does Fred.

I'll have to read Kliman's book.

>I am
>interested in debating this  question, rather than what Marx really


>>If that's not possible, all that may imply is the incompatibility of
>>capitalist production with equilibrium. Big deal. Time to move on.
>If the TP *did* imply that capitalist production is not compatible
>with equilibrium, and that could be demonstrated, that would be a very
>big deal indeed.

That's what Marx's critics have already proven on their own
terms--that the law of value is not compatible with equilibrium. That
does not invalidate the law of value without further argument.

>>  >> At any rate, Marx never said that the cost prices had been left
>>>>  unmodified in the form of simple prices or price values or values. He
>>>>  has been misread for a very long time.
>Maybe he did, maybe he didn't. There are passages in Vol 3 that
>strongly suggest he knew he did not transform the inputs. But what
>Marx said on this matter is somewhat of a side-issue because the TP is
>essentially *post-Marx*.

No Marx never admitted that he failed to transform the inputs from
simple prices or value prices or values to prices of production.
Bortkiewicz simply misread Marx, so did Sweezy. It's not that people
have failed to recognize that it's unreasonable to look at the
problem as an inverse transformation problem; it's just that people
have no recognized that this is exactly what Marx was saying.

What Marx said is roughly the following:

"In writing up my tables, I assumed
that the value transferred from the used up means of production was
proportional to the cost price of the used up means of production but
since we now know that the means of production had to have been
purchased at market prices regulated by prices of production rather
than value, I really don't have a way of determining the value
transferred in each branch from the cost price of using up of means
of production, but we should not assume that the value transferred is
proportional to (or can be identified with) the cost price of the
used up means of production.  I also assumed that wage goods were
bought at value but as they probably sold above or below value, fewer
or more workers could have been hired with the advanced v than I
assumed, and the rate of surplus value was accordingly lower or
higher than I had assumed. Now that I have introduced the
understanding of the difference between price of production and
value, I should revise my transformation tables so that I do not
identify the value transferred from the means of production with the
manifest cost price of the used up means of production, but I have no
way of determining from what is available to me in a fetishistic
economy--that is, price data--what the exact respective values of the
used up means of production were, but it also does not really matter
to the logic of the transformation as we know the total new value
added will tend to be distributed to equalize profit rates on the
basis of differences in the cost prices of the various sectors. "

Ultimately I think Foley is correct: we can look at the GDP data and
make some estimate from the new value added  what the rate of surplus
value and the value of money are.  But we are not going to be able to
figure out precisely the actual value transferred from used up means
of production in any one branch; there can be no precise calculation
of deviation between value and price of production in each branch.
And Marx clearly does not think anything of importance hangs on
impossible precision in this case.

>>  > Marx's proposal that prices of production redistribute surplus-value
>>>  is in my view correct, even in the special case of equilibrium. But to
>>>  say such things one has to engage with the modern critique on its own
>>>  terms.
>>The modern critique should engage with Marx on his own terms.
>At which point does the modern critique depart from Marx's terms?

see above.

Yours, Rakesh


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