The central idea in the transformation problem literature from Bortciewicz onwards is, I think, that there is an "accounting relationship" such that, by definition, total production prices equal total values, and total surplus value equals total profit volume.
These identities are supposed to hold by definition. They are, if you like, a "consolidation principle", a foundational logical theorem. For some Marxists, it is a mystical or metaphysical truth. Others claims it is a logical or empirical truth, or an epistemological or ontological truth. Once you have those identities, then you can perform all kinds of mathematical operations and investigate equilibrium conditions. That is what Bortciewicz liked to do. In these mathematical operations, you infer distributions of prices, from distributions of values, or vice versa, given various different conditions in the model of the production system, which you can define and test. The model shows that if you have a certain distribution here, then a certain distribution logically follows there. The intellectual challenge is, whether you can devise a model which features all the characteristics, theorems and imperatives which Marx mentions, but which also does not violate the mentioned consolidation principle, and does not run into inconsistencies. The "lawfulness" of this economic "science" then consists in the fact, that the model shows that, if you squeeze the economy here, then it must bulge there, or if there is an imbalance here, then there must be a imbalance there; to balance here, it must also balance there, and so forth. Also, if you alter a condition in the model, then the effect must be "determinate" and law-governed, since, logically, only those effects which meet the "consolidation requirements" are possible. That is the rigour of the model. Any scenario in which the sum of prices does not equal the sum of values, or where the sum of surplus values does not equal the sum of profits is ruled out, and derivatively, all sorts of other scenarios (such as positive profit with negative surplus value) are ruled out. That is the "scientific rigour". The fundamental problem with this approach is just that there exists no scientific proof at all of the mentioned "consolidation principle". There is none. It cannot be proved, whether logically or empirically. It is just an assumption. What makes the transformation problem a "problem" is that purely logical inconsistencies arise in the model of the production system, which cannot be solved. That is, it always turns out that, at some point, the "system of prices" cannot be reconciled with the "system of values". We are then forced to make additional assumptions, but the additional assumptions give rise to new inconsistencies, it never stops. If that is the case, then it is argued there is simply no proof, that there exists a determinate quantitative relationship between values and prices, and there is no proof, that values are the determinants of prices, which can explain those prices. If that is true, then the whole value theory is redundant, because it simply fails to achieve its explanatory or predictive objective from a scientific point of view. We can just as well create a model in which there are only prices, and which features all the structural characteristics Marx mentions, and then explain price variables in terms of other price variables. Ronald Meek already did this, long before Steedman did. But to reach that sort of conclusion, actually, we do not even need any complicated mathematical acrobatics like Samuelson and Steedman offer. The reason is simply that, as I have already said, it is impossible to prove scientifically that that the consolidation principle (the theorem of the two identities) is in fact true. It is only an assumption, considered true by definition. Once you understand all that, the question is raised, "what is the point, then, of value theory" but almost no Marxists have ever answered that question in a scientific way. They just tack value-theory as an "add-on" to bourgeois economics, and consider themselves very radical. The overall result is that, to develop Marx's theory further, you have to bulldozer away most of the Marxist economic theories. Marxism is largely an obstacle to understanding Marx in this sense. Marx is himself partly to blame, since he never provided a detailed discussion of the relationship between value-form and price-form. He simply says: "In Books I and II we dealt only with the value of commodities. On the one hand, the cost-price has now been singled out as a fraction of this value, and, on the other, the price of production of commodities has been developed as its transformed (verwandelte) form." This suggests that the price of production is the "changed form" of the value of commodities, such that "value" is transformed into "price". But this is not really what is meant, since the commodity has a value and a price at the same time. Jurriaan _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
