[OPE-L:2087] Re: Kliman-McGlone interpretation of the transformation problem

Alan Freeman (100042.617@compuserve.com)
Mon, 6 May 1996 02:42:09 -0700

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Allin [2070] writes

"The variable that, as I claim, is _not_ equalized (prior to convergence
of input and output prices) is: (income from sales of output - the outlay
required to continue production on the same scale)/(initial outlay)."

Couldn't agree more. The variable which _is_ equalized is:

[(income from sales of output)
less (the outlay made to produce this output)]
/(initial outlay)

The numerator here is what most capitalists call 'profit', that is
revenue minus cost. It is what you get, less what you paid: not
what you get, less what you might pay if you started all over.

I have never met anyone in business who defines profit as the variable
Allin refers to, and if they did, they wouldn't stay in business for long,
unless perhaps they were teaching marxist economics. I am sorry it isn't
equalised but there is no reason it should be. Marx certainly never claimed
it was.

If I could define my profits as my sales revenue minus what I would
*now* pay for the computers on which I do my business, I would
be extremely happy, especially if I could persuade my banker to agree
with me.

The numerator I give above is what Marx equalises in Volume III.
Indeed in Volume III we can't even calculate Allin's variable because
we don't know which outputs serve as inputs.

The superposition of Marx's schemes of reproduction on Marx's
transformation procedure was not done by Marx but by his little

The idea that profit is 'what would be need to continue production
on the same scale' is a wholly Dmitriev/Tugan/Bortkiewicz invention.