# [OPE-L:4036] Re: Re: Re: Re: transforming the inputs (was no subject)

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Mon Oct 09 2000 - 15:28:42 EDT

re 4032

Allin,

Where are the time subscripts? You can't answer me (or really
Carchedi) if you refuse to allow for them when all I am saying is
that they are  the only saving assumption one has to make to free
Marx's value theory of logical contradiction so that it can enjoy the
right to be tested against rivals in explanatory power.

So let me allow for time subscripts, but do note first that your
model does not specify quantities.

So I have made the reasonable assumption that productivity increases
5% a year. I begin with one natural unit of any good being
represented by one unit of value for the outputs. So the outputs
represent a physical quantity of 375 mp, 300 wg, 200 luxury good.
This also means that the inputs represent 357 physical units of the
mp, 286 physical units of wg.

I then calculated separate unit prices for the input mp/wg and the
output mp/wg. I showed a small and reasonable interperiodic change.

>
>
>There's a problem though.  The iteration has stabilized (there's
>no further tendency for the numbers to change when the algorithm
>above is re-applied), but we can't give the table a coherent
>economic interpretation.  Try cross-referencing the entries in
>the "price" column and the column totals for c and v.
>
>Dept I has an aggregate price of output of 420.00, yet the
>purchases of its output come to only 405.00.

No, no! The \$405 represents the money sum invested to buy means of
production as inputs at prices of production (t); the \$420 represents
the money sum which  is needed to buy *a greater physical quantity of
means of production* as outputs at their prices of production (t+1).
I do not assume unit price (t)= unit price (t+1); I only assume that
the difference is realistic for a two period time span. And this is
easily shown.

>
>  Dept II is
>producing output to the monetary value of 280.00, yet the
>purchases of wage-goods amount to only 270.00.

Similarly, the \$270 represents the money laid out to buy a smaller
physical quantity of wage goods as inputs at prices of production (t)
while the \$280 represents the money sum which is needed to buy at
prices of production (t+1) a greater physical quantity of wage goods
as outputs or, to say the same thing, as inputs for the next period
ending at t+2. Again, it is easily shown that unit prices are
changing in entirely realistic and reasonable ways (especially if we
maintain money as a theoretical reference point).

>  Profit is
>appears to be "equalized", but only on the impossible assumption
>that the price realized by the sellers differs from that paid by

No problem with time subscripts.

So far you have not responded to me at all. I do not understand the
transformation in terms of equilibrium or simple reproduction or as
an iterative or recursive exercise or in terms of linear homogeneous
equations or matrix algebra but, following Carchedi, as one period in
a sequence in which labor productivity, unit prices and even r are
changing. This is the only assumption one has to make to allow Marx
up to the plate. And it is the only reasonable assumption to make.

All the best, Rakesh

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