[OPE] The Transformation Problem: A Tale of Two Interpretations

From: Jurriaan Bendien (adsl675281@tiscali.nl)
Date: Fri May 30 2008 - 21:37:00 EDT

I think that when Marx talked about "the transformation (or metamorphosis) of commodity values into prices of production" he meant a (dialectical) modification in the conceptualization of economic categories, which reflected a solution of certain practical-historical problems confronted in commercial trade. I do not think at all he meant a "mathematical conversion" of value quantities into price quantities via some quantitative procedure.

What would it mean to say that a price aggregate "is equal to" a value aggregate? Presumably, it would mean that a certain price aggregate would, at least theoretically, exactly express the value of the commodity output concerned. But how would we, epistemically, know that? What could prove it?

Economic "value" in Marx's theory is a concept which itself can only be observably expressed as a socially recognized quality of a product, a quantity of labour-time, a quantity of money, or a trading ratio (a rate of exchange). This means two things: economic value can only ever be expressed in various observable "forms" (mediations), and economic value refers in the last instance only to three quantitative and qualitative relationships - a relationship between people, a relationship between products, and relationship between people and their products. The idea of economic value as an attribute of products is possible, only because of the existence of those relationships. The substance (content) of value could be theorised about, but in reality it could exist only in a specific observable form. 

Marx emphasized many times that capital could be truthfully understood only "in movement" (dynamically) and thus the utility of the notion of economic value for Marx was not primarily as an accounting principle, but rather as a relationship which, when analyzed, reveals what the characteristics of that movement really is - what is of importance is not any identity of aggregate prices and values, but precisely the pattern of their divergence, since products can be traded above or below their socially recognized value, which is precisely the critical problem of commercial activity, with enormous implications for the economizing and disciplining of human labour. 

Thus, the identity of total values and total prices is only a "methodological assumption", which is made, in order to reveal the basic movement of capitals, and not as an "ontological proposition". At most you can say that Marx believed that for each amount of goods traded above their value, more or less an equivalent amount of goods would be traded below it, such that in aggregate total prices would at least approximately express the sum of values. But in fact he had no way of proving that (there is none, given his own definition of value) and there is moreover no good reason for believing why this necessarily has to be the case in reality. We may be able to prove that values and prices adjust to each other, but we cannot prove any exact proportionality.

The proof of the validity of this interpretation is in fact furnished by Marx himself, insofar as he argues that reproducible labour-products have values in the economic sense quite irrespective of whether they are traded or not, and irrespective of whether they have prices or not. To be perfectly explicit, I think value relations for Marx existed quite independently of price relations (contrary to the TSS interpretation). It is indeed precisely because of this, that value relations could "regulate" price relations, i.e. that traders could in their trading not ultimately escape from the force exerted by relative quantities of labour-time implicated in the production of the products traded.

All that however in turn means that value theory remains irreducibly a theoretical interpretation of commodity exchange, of prices and of markets, which permits of no absolute logical proof. It is an argument about what economic value means and what motivates economic behaviour, and consequently about what it implies for human life. The only proofs possible are empirical proofs, i.e. the ability of this interpretation to make sense of, and explain the facts about commodity trade, and reveal the movement of commodity trade. The interpretation may possibly be proved logically coherent or incoherent, but that aside, its plausibility as a theory just depends on its ability to predict the broad patterns of commodity trade - i.e., if you assume this theory, then trade must necessarily evolve in certain ways rather than others in the long term, some scenarios are ruled out, and some are demonstrably more likely than others.

It is nowadays very fashionable among Marxists to deny any relationship between values and prices, given the reality that many influences on product markets can distort or neutralise the immediate operationality of the law of value as a regulator of commodity trade. But I don't think that was Marx's view either. He did indeed aim to explain longrun price movements with his theory of value. If it was impossible to explain that with his theory of value, this theory would itself be only a metaphysical or moral theory about markets in labour-products, but not a scientific one, since there would be nothing that could test it empirically, even in principle. The problem here is that, while the theoretical literature on value theory is enormously large, the actual investigation of real cost structures of products and real price relativities is astonishingly small. Put simply, the debate is mostly theoretical, not empirical - a coherence criterion of truth is pursued, in lieu of a correspondence criterion of truth. But scientifically speaking, you need both.

Personally, I regret this state of affairs immensely, especially because it means that the discussion takes place at a level of abstraction which is mostly at an astronomic distance from the realities of market trade. Yet these empirical realities might in fact furnish much more powerful corroboration of the validity of the theory, than even the most brilliant mathematical gymnastics in the theoretical area could. Moreover, investigating these empirical realities would clarify the limits and scope of the applicability of the theory.


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