Re: [OPE-L] monetary macro interpretation

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Thu Jun 08 2006 - 11:49:09 EDT

Dear Fred,
I don't want to defend Shaikh's interpretation by saying that there
is no real change in the magnitude of surplus value through his iteration.
Or that even  a change in the nominal sum of surplus value could be proven
to be perfectly compatible with the labor theory of value (especially if one
understands Marx's critique of adding up theories of value and the residual
nature of surplus value in his theory).

I have my own interpretation of the problem, which you accurately
dubbed the inverse transformation problem. In my interpretation the givens
are indeed in the forms of money prices determined by market prices or prices
of production. The inputs don't have to be tranformed to prices or prices
of production, but in my opinion there is still a transformation
problem. An inverse

My reading is neither yours nor Shaikh's nor the dominant one repeated ad
nauseum for one hundred  years.

  My quibbles with you are two fold--how you understand the transfer
of value from the means
of production and how macro is your macro interpretation.

Indeed the last quibble is with Marx as well as I don't think his thinking was
macro enough at times, perhaps the result of mistaken ontological commitments
coming out of his early period of critique of metaphysical illusions
see eg the Holy

I wrote in my last message about the latter problem (and to this bit you did
not respond):

King's Lexis dissolves the transformation problem and
the "unequal exchange" theory of the transfer of value.

First, an individual firm's quantity of surplus
value is not transformed into so much profit after surplus
value has been aggregated and redistributed according to an equal
profit rate rule.  The individual firm simply
never appropriated, was never in possession of so much surplus value.
There is no transformation of a firm's surplus value into a firm's profit.
There is only a distribution of total surplus value at an irreducibly
macro level to
profit at the micro level of the firm. Distribution moves from macro to micro,
from essence to appearance.
Lexis' response to Engels'  challenge seems not to solve the transformation
problem but to dissolve it.

Moreover, that surplus value may or may not
be distributed according to an equal profit rate rule.
  The rise of monopoly capital
interferes with distribution according to that rule; monopoly price can
exacerbate crises, preventing the price
deflation and/or scrapping that
  would stimulate new investments. That was central
to Preobrazhensky's crisis theory.
  The Sraffian theory, which  must assume profit rate equalization
for the equations to be soluble, cannot
handle this bit of reality. Since it has no theory of the firm, it can't
have a theory of monopoly firms.

Secondly, surplus value is  never transferred between
firms or branches, though it is obviously not
distributed in a rational way to meet social needs.

Surplus value, OCC, s/v are categories for the understanding
of total social capital, understood as a concrete individual.

The law of value asserts itself in a shortage of surplus value in
the system as a whole to sustain accumulation, resulting in
a general crisis (Grossman, Mattick).
That is, the law of value makes itself known
as the law of gravity asserts itself at the point a ceiling falls
down on one's head.

Marx's theory of surplus value is not a micro theory of relative
prices prices but a macro theory of collapse, though even at the micro
level the law of value makes itself felt in the changing of relative exchange
values over time.

Marx's theory is meant to show how the law of value asserts itself despite
non-accidental immediate appearances to the contrary.

>On Sat, 3 Jun 2006, Rakesh Bhandari wrote:
>>  > Fred wrote:
>>  >
>>  > In the past, you have said that you agreed with Shaikh's interpretation.
>>  No, no I don't think the inputs were left in the form of values or
>>  simple prices.
>>  Marxists have misread Marx for over a century. I partially agree with
>  > your argument.
>Perhaps there is more agreement between us than I thought.
>I hope so.
>>  But if one accepts the traditional transformation problem,
>>  Shaikh seems to vindicate Marx just fine.
>According to Shaikh's interpretation, the total surplus-value changes in
>the transformation of values into prices of production.  Thus the
>total surplus-value is no longer determined solely by surplus labor.
>Do you think Marx would have been happy with this result?  Or Lexis?
>Why are you happy with it.
>>  Though I don't think your or Shaikh's
>>  macro understanding of surplus value is macro enough in that it sees
>>  total surplus
>>  value as the sum of each firm's surplus value.
>And I would say that your understanding is less macro than mine,
>because the micro prices of production change the macro total
>surplus-value.  Unless you have changed your mind about Shaikh's
>>  >
>>  > Rakesh, do you agree or disagree that this is Marx's theory of the total
>>  > surplus-value?
>>  But why is this any more a theory of surplus value than I had offered?
>Because it identifies the determinants of the total surplus-value -
>the total surplus labor, which is the difference between the
>total current labor and the total necessary labor.
>You simply defined the total surplus-value as the difference between
>M' and M, which provides no explanation of the determinants of this
>>  >
>>  > Rakesh, do you agree or disagree with this interpretation of Marx's theory
>>  > of the general rate of profit and prices of production, which is
>>  > consistent with, and indeed follows from, Lexis' emphasis on the prior
>>  > determination of the total surplus-value?
>>  As usual, I have only quibbles with your interpretation since I learned Marx
>>  as I was reading your interpretations.
>Again, I am happy that you have "only quibbles" with my interpretation.
>What are the "quibbles", besides "not macro enough".
>>  But the changes from Shaikh's method are only nominal. I don't see
>>  the important difference between you and Shaikh. Between you and Shaikh
>>  and the American economics profession I do see quite a gulf, however.
>Of course, the difference between Shaikh and myself are much smaller
>than with the rest of the economics profession.  But I still think,
>as already discussed, that Shaikh's conclusion that the total
>surplus-value changes as a result of the transformation, and is
>no longer determined solely by surplus labor, is an important difference.
>Shaikh's conclusion is not consistent with the total surplus-value
>determined prior to its distribution by the total social and
>remaining unchanged as a result of its distribution, and is thus
>not consistent with Lexis' interpretation of Marx, which you are
>currently emphasizing.
>Thanks again.

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