Andrew Kliman recently wrote > I, Kliman, am NOT an advocate of what is *generally* called the "new solution" > to the "transformation problem," i.e. the interpretation of Dumenil, Lipietz, > Foley, etc. I have been arguing for several years (in print, since 1988 > _Capital & Class 35, "The transformation non-problem and the transformation > non-transformation problem," [with Ted McGlone]) that Marx's OWN account of > the transformation is indeed logically consistent and appropriate to his purpose. >The so-called "new solution" diverges from Marx in important respects. > In particular, the rate of profit is not Marx's s/(c+v). > > I also believe it is misleading to view my work as advocating ANY sort of > "solution" to the "transformation problem." Since I think there is no "problem" >with Marx's own account, there is nothing to be "solved" by us moderns here. and I'm glad he did, because it gives me an opportunity to raise the following questions about his (non-)solution the (non-)transformation (non-)problem: As I recall, Kliman and McGlone's approach (or if you'd prefer, their clarification of what Marx was about in Volume III, Ch. 9) presupposes a series of iterations in real time which begin with a set of input prices or values taken as primitives and "ends" (or approaches an end) with a system of equations which approximates the Sraffian prices of production solution for a given set of production conditions. 1) On what authority does one consider that the primitive input prices or values have any intrinsic connection to *labor* values? There are two issues here: first, the iterations would converge in the manner indicated above from a number of starting points, as for instance one using Sraffian standard commodity units. Second, what is the economic logic that would yield primitive values with any systematic connection to labor values? [Keep in mind here that the underlying conditions of production are held constant.] [Mathematical digression: all that's being demonstrated in the Kliman/McGlone approach is that this equation system is stable, in the sense of converging to a certain fixed point from a given starting point--in this case, *by assumption*, labor values. But the assumption is essentially arbitrary: such a system would be stable starting from any number of equally arbitrary initial points.] 2) What reason is there to believe that an economy would iterate in the manner suggested by Kliman/McGlone, when production conditions are invariant? Basically the iterations result from an assumption that the (cross-departmental) profit-equalization tail wags the (intertemporal) price-equalization dog. This suggests the following dilemma: either the intertemporal price path is foreseeable or it isn't. If it is, arbitrage in futures markets would quickly smooth out the intertemporal price path, contradicting the logic of the iteration. If it isn't, it is at best unclear how such uncertain price signals would promote profit-rate equalization across sectors, much less instantaneous profit rate equalization. But it is just this instantaneous profit rate equalization that prompts the iterations. Bottom line, I suspect that the Kliman-McGlone (non-) solution renders labor values essentially irrelevant (which is fine with me) and depends on the operation of a mythical economic process. Gil Skillman
