Jim Devine wrote: Hi, Ajit! I hope every thing's going well in OZ. ___________________ Things are great in OZ, and we hope to see you here soon. ____________________ 1. Ajit tears my missive apart, because I spend a lot of time talking about what (I think) Marx's Law of Value (LoV) is NOT rather than what it was. But I did say what (I thought) it was: if anything, it's a metatheory. ____________________ So what is a metatheory? ____________________ Further, there was (unstated) method to my madness. The reason why I accentuated the negative was that I want to push people to re-examine their preconceptions. It seems to me that the whole so-called "transformation problem" debate is sterile and excessively academic (not to mention scholastic) because hardly anyone ever examines what the purposes of Marx's use of value are. The neo-Ricardians (e.g., Howard & King), Morishima, and "Analytical Marxists," following the long traditin of Bohm-Bawerk and Bortkewitz, assert or assume that the purpose of value is to develop a price theory. They dismiss references (such as John Ernst's) to Marx's own assertion that the purpose of his book is to figure out the laws of motion of the system. Many of Marx's defenders (a group that overlaps with the neo-Ricardians) take up the same perspective. We all know that economists have to be concerned with price theory, so Marx must have been also, right? But did Marx ever say that his aim in using values was to calculate prices? ____________________________ Since you are not going to tell me what is the nature of the 'transformation problem', I will venture out to suggest a few points. What Marx is attempting to prove by transforming values to prices of production is that his basic theoretical categories given by constant capital (c), variable capital (v), and surplus value (s) are determined from outside the market forces. All the three variables are defined and measured in *embodied labour* units. C is given by the current technology, V is determined by the social and historical forces, and S is determined by the class struggle. Market forces only determine prices or "prices of production" by reallocating the total surplus among the exploiting classes so that the condition for reproduction is established in the bourgeois accounting: "The various different capitals here are in the position of shareholders in a joint stock company, in which the dividends are evenly distributed for each 100 units." (K III, 258) (Now who says prices of production has nothing to do with equal rate of profit?). Though Ricardo's problem of the "invariable measure of value" is not identical to Marx's 'transformation problem' (in a paper which is sitting with a journal for many months now, I have argued that Sraffa's standard commodity is *not* a solution to Marx's 'trnasformation problem'), it is closely related to it--as was quite clear to Marx (cf. TSV II). In the 'Preface' to the *Principles* Ricardo says: To determine the laws which regulate this distribution [rent, profit, and wages], is the principal problem in Political Economy: ..." And in a letter to McCullouch dated November 16, 1820, Ricardo wrote: "After all, the great questions of Rent, Wages and Profits must be explained by the proportions in which the whole produce is divided between landlords, capitalists, and labourers, and *which are not essentially connected with the doctrine of value*". That is the law of distribution is determined from outside the market forces, which basically determines value/prices. Those "Marxists" who criticise Ricardo's theory for being concerned only with prices are standing on their head. And to club Bohm-Bawerk and Bortkiewicz is simply wrong. Bohm-Bawerk's critique is that Marx arrived at his labour values on the basis of his postulation that they were the equilibrium market prices, and so to arrive at the conclusion that equilibrium market prices diverge from labour values would amount to theoretical contradiction. Bohm-Bawerk could not figure out that there was an inconsistency in the mathematical formulation of the 'transformation' procedure. Bortkiewicz's contribution as a matter of fact is a critique of Bohm-Bawerk and a defense of Marx. Similarly, in the earlier post you had suggested that "embodied labour" and "dated labour" were identical concepts. Another simple mistake. "embodied labour" and "dated labour" are quite distinct. Dated labour have multipule (1+r)^n, where n refers to the date, but embodied labour are completely independent of the rate of profit. Moreover, you had suggested that "dated labour" means earlier technologies or the technologies with which the means of production were produced. Another simple mistake. Dated labour is just another procedure to arrive at the same result as the simultaneous equation method. All the labour units are measured by the contemporary technology. I'm pointing these things out to make simply one point. Don't get shallow when criticising others in the name of Marx. It does not do any good to Marx or Marxism. ________________________ No I don't call what I said a "theoretical discourse": rather, I was trying (probably in vain) to push people to consider alternatives. I was _referring_ (without citation, I admit) to a long-time alternative to the "Marx was a price theorist" tradition which goes back to I.I. Rubin, among others. That tradition (ignored almost entirely by the neo-Ricardians, Morishima, and "Analytical Marxists") emphasizes the notion of commodity fetishism. Again, I think that theory is a constant theme in CAPITAL. _________________________ Jim, Please read Rubin's ch. 8 ( I hope my memory is correct, it could be 9. But in anycase, where he develops his demand and supply graphs) and tell me if you still think that his tradition is what you should uphold. Rubin is quite neo-classical in my opinion. Cheers, ajit sinha
