[OPE-L:2451] Re: response to Andrew, Part II

McGloneT@aol.co (McGloneT@aol.com)
Mon, 3 Jun 1996 11:54:18 -0700

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Allin--How do you know when the transformation is complete? TSS
interpretations understand this differently than simultaneists. The TSS
interpretation understands that even if there are stationary prices there
still must be another period in which values are transformed into prices.
Take the following tableau: Dept. I C=120, V=40, S=60 so Value (W) equals
220; Dept. II C=120, V=80, S=120, so W=320. The rate of profit is 500r 180
over 360. Average profit in Dept. I is 80 and in Dept. II 100. Prices of
production in Dept. I are 240 and Dept. II's are 300. Assume workers in
Dept. I get 40 breads and in Dept. II 80 breads. The per unit prices of
machines is 1=$120 and in Dept. II $1 per bread. Examine the tableau. Value
(W) in Dept. I of 220 is not equal to Price of $240. Value of 320 is not
equal to price of $300 in Dept. II. YET, we have stationary prices!
Because value is not equal to price, if there is a next period and
everything remains the same there still must be another transformation. So
the transformation is never complete.
The TSS demonstrations also show this in each period with an equal rate of
profit and with input prices not equal to ouptut prices. The stationary
prices "solution" is no better or worse than any other period as a "solution"
of the transformation.

Ted M.