[OPE-L:2368] response to Andrew, Part II

Fred Moseley (fmoseley@laneta.apc.org)
Sun, 26 May 1996 22:54:44 -0700

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This is a response to Andrew's (2310), Part II of the recent discussion
between Andrew and me.

A. In recent posts I have made the following criticisms of Kliman and
McGlone's interpretation of the transformation problem presented in their
previous papers:

1. KM argue that the transformation of values into prices of production
takes place over a number of successive periods and there is absolutely no
textual evidence to support this multi-period interpretatioin.

2. The logical method assumed by KM across period of production is
essentially the same as the Sraffian interpretation of Marx's theory in the
following respects:

a. the fundamental givens that remain constant across periods of
production are the physical quantities of the technical conditions of
production and the real wage.

b. Constant capital and variable capital are derived from the above given
physical quantities, and therefore change across periods of production

3. KM's interpretation across period of production leads to the same
quantitative results (prices of production and the rate of profit) as the
Sraffian interpretation. Therefore, Marx's two aggregate equalities are not
both true over the whole transformation process and the rate of profit
changes as result of the transformation.

B. In response to these criticisms, Andrew has presented a new illustration
that again assumes that the transformation takes place over multiple
periods, without responding to my earlier criticism of this multi-period
interpretation. I continue to insist that Marx NEVER explicitly stated,
or even hinted, that the transformation process takes place over multiple
periods, or that his discussion and illustrations of the determination of
prices of production was only one period of a process that takes place over
multiple periods. I argue that this complete lack of any explicit mention
of this important point is very strong evidence against KM's multi-period
interpretation. Surely, if Marx intended that the transformation takes
place over multiple periods, he would have at least mentioned this important
point somewhere in his various discussions.

C. In addition, Andrew's new model also assumes expanded reproduction and
technological change. Since these new assumptions require multiple periods,
I argue that, for this reason alone, these additional assumptions are also
not consistent with Marx's logical method in the determination of prices of
production. There is also an additional reason why these additional
assumptions are not consistent with Marx's determination of prices of
production: Marx's logical method was to carefully distinguish between two
stages of analysis: (1) the DETERMINATION of prices of production, as part
of the process of the equalization of profit rates, with technology and
eveything else held constant, and (2) the CHANGES in prices of production
due to changes in technology, changes in wages, etc.

For example, in Chapter 11 of Volume 3, Marx analyzed the effects of changes
in wages on prices of production (Ricardo's question). He emphasized that
this analysis assumes the establishment of a general rate of profit and
prices of production as a given fact. The only question addressed is how
these already determined prices of production are affected by an increase in
wages. Marx said:

In this entire chapter, we have assumed that the establishment of a general
rate of profit, an average profit, and thus also the transformation of
values into production prices, is a given fact. All that has been asked is
how a general rise or fall in wages affects the prices of production,
prices we have assumed to be given in advance. This is a very secondary
question compared with the other important points which have been dealt
with in this Part. Yet it is the only question Ricardo deals with ...
(p. 306) (a similar criticism is made of Ricardo in TSV.II., pp. 189-203)

This same method would also apply to an analysis of technological change on
prices of production. Such an analysis would assume that the prices of
production have already been determined by a separate analysis.

Andrew's new illustration collapses and confuses these two stages of
analysis. His method makes it impossible to assess the logical consistency
of Marx's determination of prices of production, separate from the
complicating effects of technological change. In particular, his method
makes it impossible to address one of the main controversies in the
literature over Marx's transformation procedure: does the rate of profit
change as a result of this transformation? Obviously, the rate of profit
changes in Andrew's new illustration; but, since technological change is
assumed, it is impossible to determine whether this change in the rate of
profit is due to the transformation process or to technological change. In
order to answer this question, one must first analyze the determination of
prices of production separate from the effects of technological change.

D. KM have repeatedly emphasized in their previous papers that their
previous illustrations have refuted Bortkiewitz' criticism that Marx's
transformation procedure does not satisfy the conditions of simple
reproduction. Since Andrew's new illustration no longer assumes simple
reproduction, it does not answer Bortkiewitz' critique. Thus, at the very
least, my criticisms could be reformulated as follows: KM's answer to
Bortkiewitz' critique, as presented in their previous papers, is subject to
the criticisms I have made and summarized above. According to these
criticisms, KM's refutation of Bortkiewitz: (1) is inconsistent with Marx's
logical method in the determination of prices of production, (2) is based
ultimately instead on essentially the same logical method as the Sraffian
interpretation of Marx' theory, and (3), because of this similar method,
leads to essentially the same Sraffian quantitative results. In the absence
of a response to these criticisms, KM's retutation of Bortkiewitz appears to
be invalid, in the sense of inconsistent with Marx's logical method.

Response to Part I forthcoming.

In solidarity,