Re: [OPE-L] why does the debate on the "transformation problem" continue?

From: Paul Cockshott (clyder@GN.APC.ORG)
Date: Mon Mar 26 2007 - 16:51:51 EDT

Ian Wright wrote:
>> I am trying to find out, if they think our empirical data is wrong,
>> or do they think that even in the absence of a general rate of profit
>> there is
>> still a transformation problem
> Uniform profits is a simplifying assumption. The debate on the TP
> could take place with a price of production equation that replaces the
> single r with a diagonal matrix of r's. Uniform profits is not the
> cause of the TP (the mere presence of profits is).
The difference is that if you have a non uniform rate of profit

1. You can choose the case where it is a null transform - which is
certainly no less unlikely,
    than the uniform profit rate.
2. If it is not either the null transform or the uniform profit rate you
are providing a whole
    lot of new variables which can be set to whatever you actually
observe the profits and
    market prices to be. At this point the theory no longer has any
predictive ability ( there
    is no economy of information in comparing the theory with the actual
observed data).
   Thus it is no longer a theory, merely a record of observed data.

A scientific theory must be more concise than the data it purports to
explain, if you introduce
as many free variables as the market prices, it becomes vacuous.

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