# [OPE-L:3779] Re: Re: Re: surplus value and transferrred value

From: Ajit Sinha (ajitsinha@lbsnaa.ernet.in)
Date: Thu Sep 07 2000 - 09:17:37 EDT

clyder wrote:

> Is Fred's theory helped by introducing a gold producing sector?
> Does it then become determined?

_____________________

Probably it will create more problem for him. He does not want to have the
concept of relative prices with commodity money. Cheers, ajit sinha

>
>
> > Let's cut through this merry go around, and put Fred's arguments in
> equation form to
> > show its absurdity. Let me accept Fred's assumption that Ci's and Vi's are
> "given".
> >
> > Let us suppose we are in two good economy say iron and wheat. According to
> Fred's
> > theory, for iron sector we "observe":
> >
> > \$300 (iron) + \$100 (wheat) + 10 hrs of labor, and for wheat sector
> > \$200 (iron) + \$100 (wheat) + 10 hrs of labor
> >
> > Given this, according to Fred
> >
> > 20hrs x m = \$700 + \$700r, where r is the rate of profits.
> >
> > --> r = (\$20m - \$700)/\$700
> >
> > Now Fred's equations for the prices of production would be
> >
> > \$400 + \$400r = \$y, say (for iron sector) and
> >
> > \$300 + \$300r = \$z, say (for wheat sector)
> >
> > Still we don't know the prices of production until we know how many units
> of iron
> > and how many units of wheat was produced. Now Fred will say, okay! let us
> suppose
> > now that the right hand side of the Sraffian equations are given to us
> too! So let
> > us suppose that 5 units of iron and 10 units of wheat were produced. Now,
> Fred's
> > prices of production of iron would be \$y/5, and for wheat \$z/10. Now, from
> here Fred
> > would like to derive the inputs. So the technology is now derived as:
> >
> > 1500/y units of iron + 10 hrs of labor --> 5 units of iron
> > 1000/y units of iron + 10 hrs of labor --> 10 units of wheat
> >
> is used
> > in producing iron and wheat may not have anything to do with this derived
> technology
> > because it crucially depends upon the value of "m". You change the valume
> of "m"
> > arbitrarily, and your technology will keep changing accordingly. This is
> the
> > absurdity of Fred's theory, which he keeps attributing to Marx.
> > Cheers, ajit sinha
> >
> > Fred B. Moseley wrote:
> >
> > > This is reply to Ajit's latest (#3765). Ajit, thanks again.
> > >
> > > On Wed, 6 Sep 2000, Ajit Sinha wrote:
> > >
> > > > The problem I'm trying to bring home to you
> > > > is that your so-called givens presuppose the Sraffian givens. That is,
> the
> > > > Sraffian givens are prior to your givens, and so your givens have no
> > > > legitimate theoretical status.
> > >
> > > ...
> > >
> > > > When you say that "We know that in a certain period of
> > > > time a certain amount of money-capital is invested to purchase means
> of
> > > > production and labor-power. This amount of
> > > > money-capital is in principle observable; it is an empirical given",
> you
> > > > must accept that this *observation* cannot take place independently of
> > > > what was "purchased" and how much at what price. Your empirical givens
> > > > are *derived* by taking the amounts of inputs and labor and their
> > > > prices. By claiming that my theory closes its eyes to it does not
> change
> > > > the objective situation that the theoretical givens in your theory are
> > > > Sraffian givens plus the prices of all inputs.
> > >
> > > Ajit, I have already answered this criticism in a recent post (I lost
> > > track of the number; it is between 3734 and 3741). Marx's givens do not
> > > depend in any way on the Sraffian givens. Sraffian theory is not the
> only
> > > way to determine the magnitude of constant capital (as the unit price
> > > times the quantity of the means of production). As I have explained,
> Marx
> > > determined the magnitude of constant capital in a different way. He
> first
> > > took the magnitude of constant capital as a given and then later
> explained
> > > this magnitude as equal to the price of production of the means of
> > > production. Marx's prices of production are not the same as Sraffian
> unit
> > > prices. Furthermore, contrary to Ajit, Marx's determination of prices
> of
> > > production does not depend in any way on either physical quantities or
> > > unit prices. Marx's prices of production are indeed identically equal
> to
> > > the product of quantities times unit prices. But Marx's prices of
> > > production are not determined by this product, but rather by the
> > > redistribution of the aggregate surplus-value in such a way to equalize
> > > the rate of profit across industries.
> > >
> > > > When a theory takes something as given, it
> > > > claims that those givens are determined in a space outside of its
> particular
> > > > theoretical space. For example, utility function in the neoclassical
> economics
> > > > is taken as given. By this the theory is claiming that the utility
> function is
> > > > determined by the psychology and the socio-psychological determinants
> that are
> > > > outside the scope of the economic theory. In your theory you do not
> claim that
> > > > those money variables are determined by the variables that are outside
> of the
> > > > scope of your theory.
> > >
> > > Ajit, I don't understand this. It seems to me that it would be BETTER
> to
> > > be able to eventually explain a theory's initial givens (i.e. to "posit
> > > the presuppositions"), rather than taking a theory's initial givens as
> > > determined outside the given theory. Why is this a problem?
> > >
> > > > Furthermore, when you go about determining your prices of production
> > > > by taking the disaggregated Ci's and Vi's, you never explain how do
> you get
> > > > these disaggregated figures without the knowledge of the Sraffian
> inputs.
> > >
> > > This is easy. Marx "gets" the disaggregated Ci's the same way he
> > > "got" the aggregate C - by taking them as empirically given. Just like
> > > the aggregate C is in principle observable and can serve as an initial
> > > given, so also are the disaggregated Ci's in principle observable and
> can
> > > serve as initial givens. Marx said this explicitly in the Theories of
> > > Surplus-Value:
> > >
> > > "If we take society at any one moment, there exists simultaneously in
> all
> > > spheres of production, even though in very different proportions, a
> > > definite constant capital - presupposed as a condition to
> > > production." (TSV. I: 109)
> > >
> > > A knowledge of the physical inputs is in no way necessary to determine
> > > these disaggregated Ci's. Indeed, I don't see how a knowledge of the
> > > physical inputs could help one disaggregate the total C into individual
> > > Ci's. Just dividing by the physical inputs won't do it, because the
> > > different means of production have different unit prices. Ajit, would
> you
> > > please explain? Why is it better to explain a theory's givens outside
> the
> > > theory, rather than inside it?
> > >
> > > > Just saying that I take everything as given given given don't make a
> > > > theory.
> > >
> > > Ajit, one more time: Marx did not take "everything as given given
> > > given". Rather Marx assumed that:
> > >
> > > NV = m L
> > >
> > > and that
> > >
> > > P = C + m L
> > >
> > > and from these two key fundamental assumptions, together with a small
> > > number of initial givens, Marx's theory is able to explain surplus-value
> > > (dM = mL - mLn), the rate of profit, prices of production, and much,
> much
> > > else.
> > >
> > > Fred
> >
> >

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