# [OPE-L:4356] Re: Re: Technical change and general truths

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Sun Oct 29 2000 - 14:47:32 EST

```>
>My take on this is that, from a TSS point of view, the initial
>proposition--that labour is the only source of surplus--is only sustainable
>in a consistent way in the analysis of a multi-sectoral economy when these
>rates of change are non-zero.

Fine, Steve, the rates of change in unit prices of production are
zero. Then take the PV ratios Allin derived from the
Bortkiewicz-Sweezy model. Apply them to the inputs. They now sell
above value at 693, instead of 675.

Subtract this modified cost price from the total value of 875. You
now have the mass of surplus value as 182, instead of 200. Now
distribute that 182 in terms of an average rate of profit. That mass
of surplus value still determines what the mass of branch profits
amounts to. This is the the meaning of the second equality. It is not
an identity;it is not an invariance condition between an unmodified
and modified scheme (in looking for an invariance condition,
Bortkiewicz invented this meaning of the second equality means which
has been repeated by every  entrant in the transformation
sweepstakes);  it is a relation of determination, from the macro to
the micro. The mass of surplus value changes as result of the
modification of cost prices (inputs sell above their value in the
B-S-Cottrell model). But the mass of surplus value still determines
what the branch profits add up in the unmodified and modified scheme.
In the unmodified scheme where inputs sell at value, branch profits
add up to the mass of surplus value of 200; in the modified scheme
where inputs sell above value, branch profits add up to the mass of
surplus value of 182.  The whole argument that both equalities could
not be maintained after the transformation of the inputs is based on
a fantastic misunderstanding of what the second equality--mass of
surplus value=sum of branch profits--means. If I am the first person
to point this out, fine. I am right. It seems to me that everyone has
got wrong the meaning of the second equality.
Yours, Rakesh
```

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