# [OPE-L:5338] Re: Re: Re: double divergence

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Sat Apr 07 2001 - 13:40:15 EDT

```>
>(4)	W = K + S
>
>Equation (4) is one way of expressing the determination of value, after
>the theory of surplus-value expressed in equations (1) and (2) has already
>been presented.
>
>Equation (4) for value may then be contrasted with the equation for the
>determination of prices of production:
>
>(5)	P = K + R
>
>where R is the average profit.

>
>It is also clear from the above equations that, if the cost price is the
>same in the determination of both of value and price of production, then
>there can be ONLY ONE REASON for the divergence between value and price of
>production - profit not equal to surplus-value - which contradicts the
>"double divergence" sentence at the beginning of Section 2.  Therefore, as
>I explained in my previous post, we must choose between the following
>options:  (1) either the "double divergence" sentence is misspoken or
>(2) the entire rest of the section is nonsense.

Fred, I argue that K is the same for both equations only when Marx is
expressing the value and price of production for either total capital
or the synechdocal average commodity.

Once that is realized, it's perfectly possible to advance both the
thesis of double divergence and the thesis of the non effect of wage
changes on the price and production  and value of total capital (as
represented by the average commodity) without falling into logical
problems.

Since with my set of equations for the determination of value and
price of production and the resolution of value, I can reproduce both
theses without contradiction, I urge you to accept my interpretation.

So I reproduce my last post here (I wish I had written this one first):

There is obviously no nonsense here, and it is unfortunate that Fred
agrees that there is a problem.

Total value is determined as the sum of Lmp + Lc (labor value of the
means of production plus current labor); total value, thus
determined, can be represented as or resolved into k + s or k + p.

The difference between total value, as monetarily expressed, and cost
price is the mass of surplus value which then determines the sum of
profits; in other words, s and p are equal in the aggregate.

Now if there is a wage led redistribution, this will change neither
total value (k + s) nor total price of production (k + p)--given
Marx's assumptions about money.

If we could construct a perfect average commodity which serves as a
synecdoche or perfect aliquot of total capital, a change in the wage
level would not change its price of production either.

But of course for all real commodities, a change in the wage level
will change its price of production. This is the point of chapter 11.
Marx is only reiterating the argument here.

All Marx is saying that for total capital or the average commodity, a
change in the wage level cannot in itself change total value and
total price of production--though Marx's argument here does indeed
depend on some assumptions about money which he has not justified.

But in making this point, Marx does not contradict his thesis of
double divergence.

Marx has NOT argued that total value is determined as k + s--yes,
total value can be represented that way for all practical purposes,
but value is not so determined.

Nowhere in this paragraph does Marx write k + s => value. Moreover,
the equality between k + s and value does not hold for individual
commodities but only total capital or the imagined average commodity.

Of course if Marx had said value is so determined--as Fred,
Alejandro and Alan F all claim-- then the only difference between
value (k + s => V) and price of production (k + p => Pp) would be in
the second term-- that is, the difference between s and p.

There would be only one reason for divergence.

And then Allin says the thesis of double divergence would make no
sense, and Fred then says Allin is right and that Marx blundered by

Though Marx seems to have blundered twice since he advanced the
thesis of double divergence in TSV III, right before Fred and Alan F
cut him off.

But it should be obvious that the thesis of double divergence does
not contradict the thesis of the non effect of of wage led changes on
total value and total price of production for capital as a whole (or
for the perfect average commodity).

For any individual commodity its value is determined by Lmp + Lc
while its price of production is determined as k + p. It is obvious
that each of the two respective terms differ from one another.

The first reason for divergence: while value is determined by the
*value of the consumed means of production*, price of production is
calculated on the cost price into which *the price of production of
the means of production* enters

The second reason for divergence: while the value of any commodity
depends on current labor or *the value newly added* over and above
the value of the means of production preserved by labor gratis, the
price of production of a commodity depends on *profit* which of
course tends to represent an equal claim on this sum of surplus value
produced by current labor as a whole.

There is of course no divergence between value and total price of
production for capital as a whole or the imagined average commodity.
This is why Marx writes for the average commodity k + p = k + s. This
identity holds for total capital and the average commodity which Marx
is imagining.

.So, Allin and Fred, why can't Marx advance both theses without
talking gibberish or making a mistake or lapsing into incoherence?

And one more point on Marx's error, confessed to on p. 265. Duncan
repeats the common charge that in Marx's transformation table the
inputs are left in values or simple or direct prices. Meaning that
Marx wrote up his transformation tables in the form of the circuit of
C - C' and then transformed it to C-M'

With the monetary aspect of his interpretation, Fred has made a
persuasive critique of this construal of the error to which Marx is
confessing, though Fred denies that Marx admits to any real error in
his transformation tables.

This has obviously been Fred's greatest stumbling block in winning
people over to his interpretation.

For Marx's error is indeed real, and philosophical in nature: Marx is
admitting that he treated a non-observable, though detectable,
variable (the value flow from the machine) as an observable (by
equating it with the price flow of the machine). But I have said
enough about the inverse transformation problem.

Do note that though for Marx value is in principle not measurable and
directly observable, value is indeed DETECTABLE.

As long as Fred and Alejandro insist that value is in part the
visible price flow of the machine, then we can't get to the debate
about the status of theory in which the explanatory fundamental
variable is unobservable, though detectable.

Yours, Rakesh
```

This archive was generated by hypermail 2b30 : Wed May 02 2001 - 00:00:05 EDT