Paul: ----- Marx's main clause is 'differences in the average rate of profit in various branches of industry do not exist in reality'. Well this just is not true. Empirically there are very substantial differences in profit rates between industries. One can only make it true by abstracting from these real differences on the grounds that they are mutually compensating. But any deviations from a mean are mutually compensating, so one could make the same observation about any economic statistic. One could by the same logic assert that everyone in the US recieves the same average income, since differences in income are only incidental and are anyway mutually compensating. If the statement that differences in average rate of profit do not exist *in reality* is to have any scientific content there must be some set of data which could be used to check on its validity. If one is able to disregard all contrary evidence as merely accidental, then the assertion that an equal average rate of profit really exists is content free. ____________________ May be there is a serious problem of communication here. As far as I know, you have been posturing to be the defender of Marx's theory of value against all those "neo-Ricardians" and others. When you are asked to come up with some references you say Marx was wrong and his theoretical set-up is vacuous. My concern is not about what "real prices" happen to be--rather what is Marx's theoretical argument. As a matter of fact, for what I have seen on pen-l, I will not bet my money on your all that bold emperical claims. Converting all the price data to labor values would be an exceedingly difficult job and its results would probably have high degree of unreliability. But in anycase, what your real data says is not an issue here. The basic thing Marx is saying is that up till then, i.e. chapter 8, vol.3 of *Capital*, he has been assuming that commodities exchange in proportion to their labour-values, which gives rise to different rates of profit in different sectors if their organic compositions happen to be different. This for him is not an acceptable solution because,*according to his notion of capitalist competition*, when technical change and other "inessential" factors are abstracted from, the relative prices must insure an equal rate of profit across sectors--thus the transformation problem. So I think you are going of your own tangent unnecessarily. Cheers, ajit sinha
