# [OPE-L:4444] Re: two schemes?

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Sat Nov 04 2000 - 22:07:07 EST

```Ajit,

I am slowly coming to see how correct Fred, Alejandro and Andrew are
that there is not a value and price scheme.

In what is being called your dual system approach, we supposedly know
the input labor value of the means of production (c) and wage goods
(v), and we also know from the original tableau not only the the
indirect (c) but also the  direct labor time embodied (1 +s/v)v in
the output whose total value can thus be resolved into cost price
(c+v) + surplus value (s).

c, v, s are all putatively expressions of quantities of labor value.

However, even Allin agrees that c and v are not in themselves quanta of
labor value. It is clear that they are not; everything is given a
monetary expression. If they were labor values, Marx would not have
called them cost price. c and v are indeed the money sums invested as
constant and variable
capital. There is nothing you or I can do about that. Fred is correct.

Now Allin argues that these monetary sums are just shorthand for quanta of
labor value.

But of course we cannot know how much labor quanta unless we know the value
of money.

Marx has told us that he has fixed the value of money  "Firstly *the
value of money*. THIS WE CAN TAKE AS CONSTANT THROUGHOUT." (capital
3, p. 142 vintage; capitals mine).

Say then \$1=1/2 labor hour

That is,  M (value of money)=1/2 hour; the monetary expression of an
hour of labor (1/M) is thus \$2.

For the purposes of Marx's investigation it does not matter what M
is; only that it remain fixed and constant. I will show that.

Thus the money sums of c and v would have to be divided by M (1/2) to arrive at
the labor value which these money sums represent.

But now we only know the labor value represented by the monetary sums
invested in the inputs. This in itself does not tell us the labor
value of the inputs.

So the short hand to the labor values of the inputs is not as short
as Allin has it.

Of course Marx's assumption has been that the money sums invested as
c and v has been determined on the assumption that means of
production and wage goods sold at value.

So in Marx's transformation tableau the c and v are the labor values
of means of production and wage goods, respectively, already
multiplied by a fixed and constant 1/M (the monetary expression of
labor time).

We are simply not directly dealing with labor values. Fred is right.

And if we wish to change 1/M, it will affect not only c and v
proportionately but also the s which represents the surplus
commodities (the labor value embodied in which will now be multiplied
by the new 1/M)

As Fred has also been arguing,  Marx assumes there to be a unique 1/M
(monetary expression of labor time) in the real economy at any point.

In Marx's theoretical work, he simply fixes it and keeps it constant
throughout.

may of us (me included)  so long to see his point.

So we know that behind the monetary sums of  c, v and s there is a
fixed, economy-wide monetary expression of value which this 1/m has
translated labor values into the money sums we have.

We know that if m or 1/m were different, we would have different
quantities of c, v and s but the changes would be proportional.

That's Fred's point as I now understand it. He seems right to me.

All the best, Rakesh
```

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