# [OPE-L:4011] Re: The Transformation Non-Problem and the Non-Transformation Problem

From: Andrew_Kliman (Andrew_Kliman@email.msn.com)
Date: Sun Oct 08 2000 - 10:24:42 EDT

```Rakesh had written:

"Marx admits that the inputs have to be transformed into prices of
production. He does not say that they have to be transformed into the
SAME prices of production as the outputs."

Lefteris [OPE-L:4010] responded:

"The above proposition ( that is approved by Kliman) I find ... highly
problematic, to say the least, because it implies two systems of prices
of production [--] one for inputs and another one for outputs [--] and
as a result two average rates of profit."

This isn't true.  The proposition implies a single system with a single
average profit rate, namely

P[t+1]*B = (1+r)*P[t]*A

(or something similar), where the P's are the price vectors of two
different moments t and t+1, r is the uniform profit rate, and A and B
are matrices of inputs and outputs.

Lefteris:  "Furthermore, what is an input and what is an output is also
problematic because inputs are outputs and outputs are inputs at the same
time[,] i.e. there is a single market for both inputs and outputs when
the economy is viewed as a totality."

Inputs and outputs are not distinguished by the nature of the good.  They
are distinguished functionally.  Inputs are what are used in a production
process.  Output is the result of that process.  Generally the process
takes time, so that inputs precede output.  I see no ambiguity here.  The
inputs into a production process are never the outputs of that process,
nor are the outputs of a production process ever the inputs into the same
process out of which the output issued.

Lefteris:  "So either we have a single system of prices of production or
we simply do not have prices of production at all. We just have prices
without the equalization of the profit rate which can be called whatever
but prices of production."

Again, this isn't so.  See the single equation system above.

Andrew Kliman
```

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