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

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sat Mar 24 2007 - 23:21:26 EDT

In my immediately previous and obviously unread posts I have argued that
this passage points not to the need for a transformation of the inputs
from values to prices of production but for an inverse transformation--a
correction of the assumptions of the value transferred from the means of
production and the rate of surplus value in the transformation tables.  In
other words, Marx admitted that he went wrong not in leaving the inputs in
values but in identifying the value of the consumed means of production
with their cost price as recorded in his tables. That is he why he
concludes that price of production and value diverge for two
reasons--first, due to divergence between profit appropriated and surplus
value produced and second because of the difference beween the cost price
of the used up means of production and the value transferred as a result
of their consumption.

Marx never admitted the need for an equilibrium price theory in which
inputs and outputs are transformed into the same prices of production. He
never said that he had left his inputs in the form of values or that they
should have been or be transformed into the same prices of production
as the outputs. As to the error to which he was admitting, he has been
badly misread until I corrected the reading on this list five or so years
ago. Of course if my reading has been offered by anyone else before,
please let me know. But it became obvious to me that this was the crucial
passage as it is trotted out every time one wants to use the
transformation tables to close Marx's system--see, it is said, he implied
that his solution was faulty, too and that there was a need for a
simultaneous solution. But he admitted to no such thing.

He has been mis-read by equilibrium economists and in particular by
Bortkiewicz who wanted to do away with successivism for simultaneism as
Naples has argued.

Marx has been badly misread  so that he could be made to provide his
imprimatur for equilibrium economics, in particular the need for a theory
of equilibrium price.


> On Sat, 24 Mar 2007, Rakesh Bhandari wrote:
>> Modern equilibrium economists, Marxist included, have read Marx
>> as admitting that he needed to transform his inputs into the
>> same prices of production as his outputs. But Marx never said
>> that he should have and failed to transform his inputs into the
>> same prices of production as his outputs.
> Then what the heck did Marx mean when he wrote,
> "Since the price of production may differ from the value of a
> commodity, it follows that the cost-price of a commodity
> containing this price of production of another commodity may also
> stand above or below that portion of its total value derived from
> the value of the means of production consumed by it. It is
> necessary to remember this modified significance of the
> cost-price, and to bear in mind that there is always the
> possibility of an error if the cost-price of a commodity in any
> particular sphere is identified with the value of the means of
> production consumed by it."
> It seems to me that either (a) this is just mumbo-jumbo, or (b) it
> means that Marx "admitted that he needed to transform his inputs".
> (Given, of course, the counterfactual maintained hypothesis of a
> single general rate of profit.)
> Allin Cottrell

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