# [OPE-L:2125] Re: Transforming the Transformation

S.Mohun (S.Mohun@qmw.ac.uk)
Thu, 9 May 1996 09:33:43 -0700

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Simon wrote
>So let's recapitulate what we know and can calculate:
>1. Prices of production and the uniform rate of profit. Hence the price
>aggregate of net output.
>2. Total labour hours worked; hence the value of money.
>3. The average hourly wage rate; hence the VLP per hour of labour worked;
>hence the rate of surplus-value.
>4. Aggregate variable capital and aggregate surplus-value.
>5. Measures of unequal exchange, in the sense outlined above.
>6. Hence the individual labour values in money terms of the means of
>production, and given the prevailing value of money, the labour values
>themselves. (But I don't see why one would ever want this information.)
>
>This completes how I see the derivation of values from prices of
>production.
> What else do we want to know and why?

>John replied:
>
>Let me grant you, for the sake of argument, the six things we
>can calculate. My original point concerned the differences that
>can occur as we move from one period to the next. I added the
>assumptions that
>
>1. in the first period there was enough output for accumulation
> to take place in the next period.
>
>2. one of the sectors are departments not of average composition
> grew at a faster or slower rate than the others.
>
>3. there was no technical change from one period to the next.
>
>
>Based on these assumptions I stated that we would, in Period II,
>calculate a different "value of money." Thus, the value of
>money could change without any technical change at all. For me,
>this calls into question the manner in which this "value" was
>determined. That is, if it is a one-time calculation, what is
>the difference? You could simply use it to "see" values via the
>prices of production. You'd be dealing with prices and values
>the way Marx does in Vol. I when he states that the more productive
>labor is capable of producing more value when the forces of
>competition do not force prices down on the world market. In our
>example, we would simply say that the labor in the "odd" sector is
>producing more or less value than the others and go on with the
>analysis. What do we lose?
>
>Well, there goes any hope of actually deriving prices from values.
>But, the alternative is to perpetually compute the value of money
>since the value so computed is only valid for a point in time
>and hence can never be part of comprehensive picture of an
>accumulation process taking place in real time. Toss in technical
>change and fixed capital and the thing becomes a mess we've yet
>to capture with any mathematical techniques.
>
>Thus, if nothing else, we could go beyond Chap IX of Vol. III and
>treat prices of production as values recalling Marx's instruction
>to remember the possible difference between the two magnitudes when
>it comes to a given amount of output.
>
Now Simon replies:

I'm sorry for the delay, but I am enmeshed in tedious admin here. Anyway, if
py is net output in money terms and lx is (productive) labour hours worked,
then anything which alters the ratio lx/py by definition alters the value of
money. If productivity changes are ruled out by assumption 3, then by your
assumption 2 yes, the value of money will change. (There are other
possibilities too: inflation of course, but also a firm transferring some of
its shop-floor labour into its marketing and sales department.)

I suppose this matters if you want to derive a price from a labour-time via
the value of money. Is this what is troubling you?

Simon
Simon Mohun,
Dept of Economics,
Queen Mary and Westfield College,
Mile End Road,
London E1 4NS,
UK
Telephone: 0171-975-5089
Fax: 0181-983-3580