# [OPE-L:4604] Re: Re: Re: Re: Re: Part of My Confusion on theTransformation

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Mon Dec 04 2000 - 12:37:40 EST

```re 4600

>
>
>Rakesh, to measure something you need to have something to measure it with.
>Now, if the measure of the thing that you are measuring is changing, then
>how much it is changing and whether it is changing or not crucially depends
>upon whether whatever you are measuring it with remains constant or not. Let
>us suppose that you want to measure the length of an iron rod over different
>seasons. Our theory suggest that its length should be relatively larger
>during summer and smaller during winter. Let us suppose that to measure the
>length of the iron rod we have chosen a copper rod. Now, if the length of
>the copper rod itself is affected by the variation in temperature, then we
>lose the ground to establish the fact that the length of the iron rod has
>changed by so much or if at all. Thus to prove our hypothesis about the iron
>rod we need to first establish that the copper rod will not be affected by
>the change in temperature. If we could do that then we have an invariable
>measure for our purpose in this context. Otherwise, our theory about the
>variation in the length of the iron rod becomes baseless. Note the point
>that assuming that copper rod remains invariant through changes in
>temperature is not satisfactory in this case. So now you can understand that
>you or fred or Marx or even God has no power to fix the monetary expression
>of value. You have to have a theoretical argument that proves that when
>prices of all the commodities are changing, how could your monetary
>expression of value remain constant. This is your first theoretical problem,
>unless you establish this first, all your subsequent moves on the board are
>baseless. This is true for you, Fred, and TSS, etc. as well.

Ajit,

I already took up this problem, and as you know you did not respond.
Marx agrees that that there is not, and cannot be, any invariable
measure of value. Yet through prices the fluctuations of a given
capital in the course of its
circuit become expressed in money, which serves as measure of value
required for accounting. And with respect to this measure of value marx
proceeds from the assumption, which is purely fictitious and which forms
the basis of his analysis, that the value of money is contant. At first
sight this appears to be all teh more suprising in the sense that, in his
polemic with Ricardo's 'invariable measure of value,' Marx emphasizes that
gold can only serve as a measure of value becuse its own value is variable.
But science needs invariable measures: 'the interest in comparing the value
of commodities in different historical periods is, indeed, not an
*economic* interest as such, but an academic interest.' (Marx)

From the historical surveys of the development of thermometry we know that
a reliable measure of heat variations was established through the
fundamental work of Amonton, with the discovery of two fundamental points
(boiling point and the absolute null point of water) for liquid used as the
measure of heat variations. This alone could establish the constant
reference points with which it became possible to compare the variable
states of heat (Mach)

There are no such constant reference points for gold as the measure of
value. So an exact measure of the value fluctuations of commodities would
be impossible. On the one hand changes in teh value of the money commodity
may differ from the changes in the value of individual commodity types. In
this case we have no exact measure to ascertain how far, say, the rising
prices of a given commodity have been caused through changes in its own
value and how far through changes in the value of the money commodity. In
this case, suppose we were studying variations in the magnitude of surplus
value; ten, with a variable value of money, it would be difficult to tell
whether a given increment in value (or price) was not something merely
apparent and caused purely by changes in the
value of money.

'In all these examples there would however have been no actual change in
the magnitude of capital value, and only in th emoney expression of the
same value and the same surplus value...there is, therefore, but the
appearance of change in the magnitude of employed capital.' (Marx)

Alternatively the value of money varies in the same proportion as the
values of other commodities, for instance due to general changes in the
productivity--a limiting case that is scarcely possible in reality. In that
case there would have been enormous absolute changes in the real relations
of production and wealth, but these actual changes would be invisible on
the surface, because the relative proportions of individual commodity
values would remain the same. The price index wold not register the actual
changes in productivity.

Thus it was entirely valid for Marx to substitute the 'power of
abstraction' for the missing constant reference points, so falling into
line with Galileo's principle: "measure whatever is measurable, and make
the nonemeasurable measurable.' For instance to ascertain the impact of
changes in productivity on the formation of value and surplus value, Marx
is forced to introduce the assumption that the value of money is contant.
This assumption is therefore a methodological postulate that equips max
with an exact measure for ascertaining values of industrial capital during
its circuit. It is an assumption underlying all three volumes of Capital.

>___________________
>
>>
>>
>>  You said you want go any further unless I drop this assumption; will
>>  you reconsider since I am simply beginning with the same assumptions
>>  and equations Sweezy gave us. I don't think Paul C or Allin think
>>  that the assumption regarding the unit of account is terribly
>>  unreasonable, especially as an interpretation of Marx's own procedure.
>
>_____________________
>
>You don't seem to understand Sweezy's point. If you measure value in
>labor-time units, then of course values don't change during the
>transformation procedure, since they are independent of prices of
>production.

I do understand Sweezy, and he says that the only reason that he does
not keep the unit of account as an hour of labor time, as Marx he
thinks has done in his own incomplete transformation, is that he is
left with four equations and four unknowns. By turning dept III into
the producer of the unit of account, he can set its transformation
multiplier at 1, and have just three equations with three unknowns.
He gives no theoretical reason for pursuing this way other than
mathematical tractability. Read it yourself.

>  But you are imposing a price value relationship in terms of your
>monetary expression of value at the outset, and then you go on to suggest
>that during the transformation procedure all the prices are changing but
>your initial price-value relationship in terms of monetary expression of
>value remains constant. This is illegitimate.

No it is not. Marx rules out changes in prices due to changes in the
value of the medium in which price is expressed. Ricardo does the
same thing in the first chapter of his Principles, I have recently
discovered.

Yours, Rakesh
```

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