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

From: Allin Cottrell (cottrell@WFU.EDU)
Date: Sun Mar 25 2007 - 11:26:16 EDT

On Sat, 24 Mar 2007, Rakesh Bhandari wrote:

> 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.

Rakesh, I don't really see how the "inverse transformation"
differs from the "forward transformation", other than verbally. In
each case, one is recognizing that if you write down a set of
"prices" for inputs, you can't take these magnitudes as both

(a) indicating the value transferred from inputs to output, and

(b) indicating the price of the inputs as would enter into
     the formation of a price of production for the output.

Yet, it seems to me, that is just what Marx tries to do in his
transformation arithmetic.  So there is a breakage to be fixed.

I remain of the view (Shaikh, Morishima) that Marx's
transformation should be seen as the first step in an iteration
that would produce a consistent set of prices of production.

> Marx never admitted the need for an equilibrium price theory in
> which inputs and outputs are transformed into the same prices of
> production.

He didn't use the phrase "equilibrium prices", but the concept of
price of production depends on the notion of an equalized rate of
profit, and that is surely an equilibrium idea -- in fact, an
excessively strong one.

> 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.

What's "successivism"?  I think questions of dynamics and
temporality are a red herring in this context, not because they're
not important, but because -- if we're discussing Marx -- his
transformation procedure is purely logical and static.  Some
people have attempted a dynamic analysis of the formation of
prices of production (for example, Dumenil and Levy).  To do this
you have to model inter-sectoral capital flows and the resulting
shifts in supply (and face the tricky question of whether this is
going to produce stable convergence on anything -- that has to be
a derived result, not an assumption).  There's nothing of that
sort in the passages from Marx that deal with the transformation
in a quantitative manner.


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