[OPE-L:4400] Re: Transformation & Fixed Capital

Fred Mosele (fmoseley@laneta.apc.org)
Sun, 16 Mar 1997 22:53:12 -0800 (PST)

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John E. wrote in (4388):

>Has anyone tried his or her transformation procedure with
>fixed capital? Or do you know of anyone who has? I am
>not really interested, at this point, in those procedures
>that only deal with relative prices but rather those that
>attempt to preserve the idea of value.
>In Chap. 9 of Vol 3, Marx seems to simply "abstract from"
>fixed capital as he transforms values into prices of
>production. I'm not sure if his transformation procedure
>works at all with fixed capital.

John, I don't think that Marx abstracted from fixed capital in Chapter 9,
or at least not completely. His two examples on p. 256 (Penguin) take fixed
capital into account and calculate prices of production according to the
following equation:

ppd(i) = k(i) + r F(i)

where k(i) is the cost price (flow), F(i) is the fixed capital (stock) and r
is the general rate of profit. k and F are taken as given and r is
predetermined by the analysis of capital in general in Volume 1.

What is the problem with this? I think the key is NOT to start with given
physical technical conditions. Then fixed capital poses insurmountable