[OPE-L:1910] Re: Transforming the Transformation

John R. Ernst (ernst@pipeline.com)
Tue, 23 Apr 1996 10:26:49 -0700

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I understand your questions. Let's review and then take a
crack at them.

John wrote:

What does the transformation problem look like if we try to
do it backwards? That is, most "solutions" follow Marx and
attempt to explain the transformation of values into prices of
production. Why not transform prices of production into values?

That is, assume a set of capitals in which the rate of profit is
uniform and the compositions of capital differ. In moving from
this initial state which we call Period I to the next, assume
that one of the capitals which is above average in composition
grows at a faster rate than the others, the rate of profit remaining
the same. Does an hour of abstract labor in Period I create the
same amount of value as it does in Period II? The same problem
arises if a capital of lower than average composition grows at a
faster than the others.

Simon writes:

I don't understand the specification. Why should anything different happen

in Period II if the uniform rate of profit does not change?

John responds:
The relation between total price and total value changes since the
labor added in the production process of period II creates less or
more value than average since it is working with a capital of a
larger or smaller composition respectively. Living labor does not
add the same amount of value expressed in prices as before.

Simon replies:
Sorry, I still don't understand. In Period I all capitals (of varying
composition) earn the same (equalised) rate of profit. You want to disturb
this equilibrium by supposing that some capital of above average
grows faster than all others, and at the same time maintain the equilibrium

by supposing that the actions of this capital have no effect on the rate of

profit (and therefore on prices of production). But if there are no effects

of this capital's actions on prices and the rate of profit, does your
question ('Does an hour of abstract labor in Period I create the same
of value as it does in Period II?') make sense? Is it of any interest? Does

the answer matter?

Am I misunderstanding something?

John says:

Perhaps, we've reached a point where an example is needed. But let
me try to answer your questions without one. I simply assumed albeit
implicitly that there was enough constant capital produced at the end
of Period I for one type of capital to expand production on the same
scale in Period II. To be sure, there would be no effect on either
the rate of profit or the prices of production. Why is this of
interest and does the answer matter? I think so. What this hypothetical
points out is the problematic nature of the relation between price and
value. That is, one hour of labor is represented in some amount of
money in Period I and a different amount in Period II. Indeed, an
hour of living labor adds a different amount of value in each period of
production. What is the significance of this? As one attempts to
reconstruct prices of production from values, the assumption is
often made that an hour of abstract labor creates a given amount
of value. But as we here that given amount is affected by the prices
of production themselves. Thus, it would seem that to carry out the
transformation using the idea that one hour of labor creates so much
value, one has already tacitly assumed the prices of production as well
as the degree to which each process is used.