Re: [OPE-L] questions on the interpretation of labour values

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Mon Mar 26 2007 - 11:32:10 EDT

>>But that still leaves unaddressed this point: you are just
>>asserting--not demonstrating or proving--that the prices of
>>production of the mop and mos bought with the initial M had to have
>>been the same as the
>>prices of production which you derive with your sequential monetary
>>macro method predicated on the LTV.
>>Simply put, there is a difference between assertion and demonstration.
>Hi Rakesh,
>I am not sure what kind of “demonstration” you are looking for, but
>attached is a simple two-sector numerical example, in which C = Pmp and
>(V + S) = Pms.
>Is this the sort of thing you have in mind?

No. Are K and Z sectors capital good and wage good sectors, Div I and Div II?

I can't follow this example.

It's not that we differ about monetary macro vs 
inverse; we also differ about whether prices of 
production  are long term center of gravity 
price. I think not, as I think equilibrium price 
for Marx means not stationary price but a 
tendency for price and output adjustments over 
the long term to equalize profit rates.  But 
since you accept that  equilibrium price is 
stationary price, you have to show that those 
prices that you derive via your method could have 
determined the prices of the goods bought 
directly and indirectly with the initial M. You 
say that we change our understanding of what 
determined the initial M, but what grounds have 
you given us for believing that the initial M 
could have been determined by the prices for mop 
and mos that your method would allow us to derive?

I don't see how this two sector model gives us grounds.

But if no one else sees a problem in the argument 
here, perhaps it's best to ignore my complaint.

I think you are putting an unnecessary burden on 
yourself by arguing that the prices you derive 
had to have been the same prices which roughly 
determined the market prices of the mop and mos 
bought with the initial M. It's not that I 
believe that Marx is transforming prices into 
prices. He's deriving new prices of production 
from the initial M based on whatever the prices 
of production in the previous period were. Indeed 
the transformation chapter dwells on length not 
on equilibrium prices of production but on the 
causes of their change over time!  So Marx's 
analysis of the transformation is not simply 
logical and timeless and static as Allin has 

Moreover, we have to begin with the price data 
and infer values from that. So I agree with 
taking M as a given precondition, not unknown 
values or modal techniques of production. The 
unknowns are not the prices or even the average 
rate of profit but the value transferred, the 
rate of surplus value. It could not be otherwise 
in a fetishistic economy.

If you drop the neoclassical equilibrium 
assumption, then I agree with your monetary macro 
sequential method.

Yours, Rakesh

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