**Next message:**Rakesh Narpat Bhandari: "[OPE-L:4401] Re: Re: growth rates"**Previous message:**glevy@pratt.edu: "[OPE-L:4399] Re: Technical change and general truths"**In reply to:**glevy@pratt.edu: "[OPE-L:4399] Re: Technical change and general truths"**Next in thread:**Rakesh Narpat Bhandari: "[OPE-L:4404] Re: Re: Re: Technical change and general truths"**Reply:**Rakesh Narpat Bhandari: "[OPE-L:4404] Re: Re: Re: Technical change and general truths"**Messages sorted by:**[ date ] [ thread ] [ subject ] [ author ]

re 4399 >In [OPE-L:4394], Rakesh wrote: > >> I call the above response to the transformation problem on the >> assumptions of equilibrium thinking the >> Shaikh-Gouverneur-Moseley-Bhandari solution. >> It is of course possible that the first three would disavow the >> affiliation. > >Have I missed something? Jerry, are you having trouble keeping up with my posts! > Putting aside the question of the degree to which Shaikh's and >Gouverneur's positions on the TP are similar to your own I am just using Gouverneur's iteration table B.3 on p. 291 of his contemporary capitalism and marxist economics. Gouverneur argues that the table is inspired by Shaikh. >(on the later question, I found Alejandro R's remarks informative), >why should the Bhandari solution be understood as being synonymous >with the "Moseley solution" (I put this in quotes because I don't >recall hearing Fred refer to his "solution")? Gouverneur grants that his iteration violates the second equality, which he seems to understand as the stipulation that the sum of branch profits in both the unmodified and modified schemes should equal the sum of surplus value (the total in the profit column) in the first tableau. I argue that the second equality is not such an 'invariance condition.' Since Marx defined surplus value as total value minus cost price and the rate of profit as surplus value/cost price, he could not have that the modification of the cost price due to the transforming of the inputs--which is what the iteration does--would leave the sum of surplus value and the rate of profit invariant. That is, I argue that the so called second equality interpreted as an invariance condition is the pure fantasy of Bortkiewicz-Sweezy-Catephores and many others. I may be the first to argue this. But then what does the second equality that sum of surplus value=sum of branch profits mean? This is where I turn to Fred (Moseley). Fred has argued correctly that for Marx, the average rate of profit is not determined simultaneously with prices. Rather it is determined by first determining the mass of surplus value as total value minus cost price; then the mass of surplus value is divided by cost price to arrive at the average rate of profit; then each branch cost price is multiplied by this r to arrive at branch profits the sum of which is necessarily the same as the mass of surplus value. That is,the second equality is not an invariance condition but a a macro, logical method of determining from the antecedently derived mass of surplus value both the average rate of profit and respective branch profits such that the sum of the these branch profits equals the sum of surplus value. In each of Gouverneur's iterations, the mass of surplus value is determined first by subtracting from total value cost prices which have been modified by applying the output PV ratios on the inputs. Once this modified mass of surplus value is determined, then the average rate of profit is determined which when multiplied by the respective modified cost prices of the branches ensures that the mass of profit will equal the sum of surplus value in each iteration. Thus, in each iteration the mass of surplus value does indeed determine the sum of branch profits. The second equality is thus in fact preserved. Again: Gouverneur's iterative method does in fact maintain both equalities, properly interpreted. Again Marx could not have meant the second equality as an invariance condition since having defined surplus value as total value minus cost price and the rate of profit as surplus value/cost price, he could not have thought that the mass of surplus value and the rate of profit would remain invariant as the cost price is modified. One may then ask why do I allow for total value/price to remain invariant? Well, this iteration is not changing the quantity of live and dead labor and thus the total value in the system; this iteration is changing merely the prices of the inputs in an iterative manner. But as cost prices change, so must surplus value and the rate of profit for the reasons which I have given. So the second equality is not an invariance condition. It is to the meaning of the sum of surplus value determining the sum of branch profits that I have turned to Fred to interpret this second equality rather as Marx's macro, logical method of determining the sum of branch profits by the antecedently established mass of surplus value. And this macro, logical method is in fact used in each of Gouverneur's iterations. Yours, Rakesh

**Next message:**Rakesh Narpat Bhandari: "[OPE-L:4401] Re: Re: growth rates"**Previous message:**glevy@pratt.edu: "[OPE-L:4399] Re: Technical change and general truths"**In reply to:**glevy@pratt.edu: "[OPE-L:4399] Re: Technical change and general truths"**Next in thread:**Rakesh Narpat Bhandari: "[OPE-L:4404] Re: Re: Re: Technical change and general truths"**Reply:**Rakesh Narpat Bhandari: "[OPE-L:4404] Re: Re: Re: Technical change and general truths"**Messages sorted by:**[ date ] [ thread ] [ subject ] [ author ]

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