# [OPE-L:3782] RE: Hairsplitting

Ian Hun (Ian.Hunt@flinders.edu.au)
Wed, 4 Dec 1996 17:18:51 -0800 (PST)

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Chai-on writes
>
>Dear Ian,
>
>Well, in the iteration, you have no right to change the rate of
>exploitation, as it is qualitatively determined in the sphere of production.
>In the result of the iteration, the rate of exploitation should not be
>altered. The iteration is just a process of changing value and price
>accounts. Yet, the s/v is to remain the same because the value accounts must
>change proportionately. If v changes into v*m, then the s, too must change
>into s*m. This is because the v+s is to be proportionate to the amount of
>direct labor. In the iteration, you can only change the calibration of the
>measuring rod of the direct labor, not the division ratio between v and s. I
>myself regard the iteration as a sort of rubbish.
>Since, at each stage of the iteration you have inconsistent input and output
>prices, you may well have different, distinct price systems. But why is the
>rate of exploitation to change? YOU CAN CHANGE INPUT AND OUTPUT PRICES
>PROVIDED THAT THE RATE OF EXPLOITATION IS NOT ALTERED.
>
Well, yes. This is a terminological point really. The rate of surplus value
defined in terms of value quantities does not change at all. However, if
you take Marx's schema for transformation and reapply it in an iterative
solution for prices of production, you will have initial output prices
appearing as "values" in the second step of the iteration, which will lead
to a recalculation of "surplus-value", which will produce new output prices
which will appear as "values" in the third step, and so on. Here "values"
at subsequent stages of iteration are just place holders for partially
transformed prices of production. There is nothing wrong with this as a
mathematical procedure for finding prices of production per unit of value.
The formalism does not demand that you provide a "real" intepretation of
quantities at each step.
Ian