Re: [OPE-L] Marx on the general rate of profit/rate of interest: a translation error

From: Ian Wright (wrighti@ACM.ORG)
Date: Fri Nov 02 2007 - 12:53:43 EDT

> (2) Let's suppose that labor is homogeneous. Even then
> it is not clear what the labor-values of constant
> capital measures and why it should be conserved?
> Marx's argument of conservation of labor (assuming
> homogeneous labor) works okay if we assume that total
> capital is only variable capital. Marx seems to have
> made this simplifying assumption (even though he
> criticizes Ricardo for doing so) during his argument
> about allocation of total labor (i.e. 'law of value').
> But the argument no longer holds when constant capital
> is introduced. Marx thought that he had solved the
> problem with his rate of profit formula [S/(C+V)],
> that's why he insisted that after transformation the
> total values must be equal to total prices of
> production (i.e., that the conservation principle
> holds). But this rate of profit is itself dependent on
> the assumption that the conservation principle holds.
> So the argument seems to go in a circle. Cheers, ajit
> sinha

You get these kinds of conceptual difficulties with standard
labour-values, which don't correctly measure replacement costs in
terms of labour time. But once one correctly measures replacement
costs, then Marx's conservation claims are ok, and the labour-value
rate of profit equals the price rate of profit etc.

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