**Next message:**Rakesh Narpat Bhandari: "[OPE-L:4406] Re: Re: Re: Re: Technical change and general truths"**Previous message:**P.J.Wells@open.ac.uk: "[OPE-L:4403] Edgeworth as precursor of Farjoun and Machover"**In reply to:**Rakesh Narpat Bhandari: "[OPE-L:4400] Re: Re: Technical change and general truths"**Next in thread:**Rakesh Narpat Bhandari: "[OPE-L:4406] Re: Re: Re: Re: Technical change and general truths"**Reply:**Rakesh Narpat Bhandari: "[OPE-L:4406] Re: Re: Re: Re: Technical change and general truths"**Reply:**Allin Cottrell: "[OPE-L:4407] Re: Re: Re: Re: Technical change and general truths"**Messages sorted by:**[ date ] [ thread ] [ subject ] [ author ]

Jerry, let me make the point even clearer. Basically what I am saying that both equalities can be maintained even if one so called invariance condition is given up. This is the logical possibility which I demonstrate here. Let me show this: We are all agreed that there are two equalities: (1)sum of value=sum of prices of production (2)sum of surplus value=sum of profits. We have Marx's transformation procedure: The initial value table: c v s value I 225.00 90.00 60.00 375.00 II 100.00 120.00 80.00 300.00 III 50.00 90.00 60.00 200.00 Tot. 375.00 300.00 200.00 875.00 Marx's first-step transformation takes the given total s and distributes it in proportion to (c+v). Thus: c v profit price pvratio I 225.00 90.00 93.33 408.33 1.0889 II 100.00 120.00 65.19 285.19 0.9506 III 50.00 90.00 41.48 181.48 0.9074 Tot. 375.00 300.00 200.00 875.00 1.0000 Marx argues that unless the inputs are transformed as well,it is possible to go wrong. So we have to transform the inputs. We will be changing *the prices* at which the inputs represented in the c and v column will sell. I will accept the backwardly causal method of applying the output PV ratios on the inputs. Now we are NOT changing the indirect and direct labour embodied in the output whose value will thus remain invariant (875); this total value will continue to determine the sum of the prices of production in the transformation or throughout the iteration. However, the point of this exercise is to modify the cost prices or the quantity of the capital advanced and to see how this changes our results. Marx defines surplus value as total value minus cost price or total capital advanced, i.e., the money paid for the direct and indirect labour embodied in the commodity (see Capital 3, ch 2). Since we are modifying cost prices, the sum of surplus value and the rate of profit determined in terms of it cannot remain invariant. Of course the sum of surplus value as changed by subtracting from the invariant total value modified cost prices must still equal the sum of branch profits. We have to preserve the second equality. So the logic of Marx's argument about the need to transform the inputs implies that both equalities remain intact but the second so called invariance condition is given up: The mass of surplus value simply change because from total value modified cost prices are being taken, as shown in equation 6 below. So we have the following transformation equations: (3) 225x+90y+r(225x+90y)=225x+100x+50x (4) 100x+120y+r(100x+120y)=90y+120y+90y (5) 50x+90y+r(50x+90y)=r(225x+90y)+r(100x+120y)+r(50x+90y) (6) 875-(225x+100x+50x+90y+120y+90y)=r(225x+90y)+r(100x+90y)+r(50x+90y) (7) 875=375x+300y+r(225x+90y)+r(100x+90y)+r(50x+90y) If I take the (rate of profit + 1) to be m, I have these equations (8) m(225x+90y)=375x (9). m(100x+120y)=300y (10). m(50x+90y)=(m-1)(375x+300y) (11) 875-375x-300y=(m-1)(375x+300y) which implies (12) m(50x+90y)=875-375x-300y As Andrew tells me, m and x/y can be solved for by (10) while (11) allows me to determine the absolute levels of x and y as well. So we have the transformation in which both equalities (1) and (2) are indeed maintained in equations the (6) and (7). Now Allin objects that I have preserved the two equalities by trickery. But it makes no sense to read the second equality as also an invariance condition. It would make no sense to keep the mass of surplus value invariant with total value as we modify the cost prices since Marx defines surplus value as total value minus cost price. It would also make no sense not to treat total value as invariant since we are only changing the prices of inputs and outputs, not the quantity of direct and indirect labor in this single system. So the breaking of an invariance condition is the not the breaking of either of the two equalities. Moreover, I do not think the point of this exercise is to provide additional warrant for the two equalities. The point is to show that since the average rate of profit and prices of production do change when we transform the inputs, Marx was correct to conclude that it is possible to go wrong if the cost prices remain unmodified. all the best, Rakesh

**Next message:**Rakesh Narpat Bhandari: "[OPE-L:4406] Re: Re: Re: Re: Technical change and general truths"**Previous message:**P.J.Wells@open.ac.uk: "[OPE-L:4403] Edgeworth as precursor of Farjoun and Machover"**In reply to:**Rakesh Narpat Bhandari: "[OPE-L:4400] Re: Re: Technical change and general truths"**Next in thread:**Rakesh Narpat Bhandari: "[OPE-L:4406] Re: Re: Re: Re: Technical change and general truths"**Reply:**Rakesh Narpat Bhandari: "[OPE-L:4406] Re: Re: Re: Re: Technical change and general truths"**Reply:**Allin Cottrell: "[OPE-L:4407] Re: Re: Re: Re: Technical change and general truths"**Messages sorted by:**[ date ] [ thread ] [ subject ] [ author ]

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