[OPE-L:2125] Re: Transforming the Transformation

S.Mohun (S.Mohun@qmw.ac.uk)
Thu, 9 May 1996 09:33:43 -0700

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Simon wrote
>So let's recapitulate what we know and can calculate:
>1. Prices of production and the uniform rate of profit. Hence the price
>aggregate of net output.
>2. Total labour hours worked; hence the value of money.
>3. The average hourly wage rate; hence the VLP per hour of labour worked;
>hence the rate of surplus-value.
>4. Aggregate variable capital and aggregate surplus-value.
>5. Measures of unequal exchange, in the sense outlined above.
>6. Hence the individual labour values in money terms of the means of
>production, and given the prevailing value of money, the labour values
>themselves. (But I don't see why one would ever want this information.)
>This completes how I see the derivation of values from prices of
> What else do we want to know and why?

>John replied:
>Let me grant you, for the sake of argument, the six things we
>can calculate. My original point concerned the differences that
>can occur as we move from one period to the next. I added the
>assumptions that
>1. in the first period there was enough output for accumulation
> to take place in the next period.
>2. one of the sectors are departments not of average composition
> grew at a faster or slower rate than the others.
>3. there was no technical change from one period to the next.
>Based on these assumptions I stated that we would, in Period II,
>calculate a different "value of money." Thus, the value of
>money could change without any technical change at all. For me,
>this calls into question the manner in which this "value" was
>determined. That is, if it is a one-time calculation, what is
>the difference? You could simply use it to "see" values via the
>prices of production. You'd be dealing with prices and values
>the way Marx does in Vol. I when he states that the more productive
>labor is capable of producing more value when the forces of
>competition do not force prices down on the world market. In our
>example, we would simply say that the labor in the "odd" sector is
>producing more or less value than the others and go on with the
>analysis. What do we lose?
>Well, there goes any hope of actually deriving prices from values.
>But, the alternative is to perpetually compute the value of money
>since the value so computed is only valid for a point in time
>and hence can never be part of comprehensive picture of an
>accumulation process taking place in real time. Toss in technical
>change and fixed capital and the thing becomes a mess we've yet
>to capture with any mathematical techniques.
>Thus, if nothing else, we could go beyond Chap IX of Vol. III and
>treat prices of production as values recalling Marx's instruction
>to remember the possible difference between the two magnitudes when
>it comes to a given amount of output.
Now Simon replies:

I'm sorry for the delay, but I am enmeshed in tedious admin here. Anyway, if
py is net output in money terms and lx is (productive) labour hours worked,
then anything which alters the ratio lx/py by definition alters the value of
money. If productivity changes are ruled out by assumption 3, then by your
assumption 2 yes, the value of money will change. (There are other
possibilities too: inflation of course, but also a firm transferring some of
its shop-floor labour into its marketing and sales department.)

I suppose this matters if you want to derive a price from a labour-time via
the value of money. Is this what is troubling you?

Simon Mohun,
Dept of Economics,
Queen Mary and Westfield College,
Mile End Road,
London E1 4NS,
Telephone: 0171-975-5089
Fax: 0181-983-3580