On Oct 28, 2012, at 3:45 PM, Jim Devine wrote:
> Patrick:
>> Aren't there a great many ways that irrationalities in capitalism
>> introduce
>> deviations of price from value? Isn't that one of the ways you can
>> see how
>> failing to solve the Transformation Problem in Das K was less an
>> indictment
>> of Marx - and more an indictment of a capitalist system that
>> regularly
>> directs investment capital into places that are suboptimal (or often
>> counterproductive) from the standpoint of generating surplus value?
>> (Like
>> rentier activity, or excessively capital-intensive production?)
>
> exactly! (I second Michael's emotion!)
>
> And we shouldn't just be damning Bohm-Bawerk but also Bortkewicz for
> creating a dead-end for Marxists to run into.
What have "irrationalities" to do with it? Marx in vol. 3 shows that
the deviation of price (of production, identical to Marshallian long-
run-average-cost) from value stems both from the basic facts of
technology (some industries being much more "capital-intensive" than
others) and from the *most rational* aspect of the ideal (perfectly
competitive or perfectly monopolistic) capitalist market--the ability
of capital to "flow" easily from areas of low social demand into areas
of high demand.
And the "transformation problem" challenge is not at all trivial--it
challenges the consistency of Marx's system on the grounds that the
invested capital, the basis for price of production, is itself valued
relatively not according to the labor embodied in it but in accordance
with
the relative price (different from the relative quantity of embodied
socially necessary labor time) of the capital goods that make it up.
And the answer, as I pointed out fifty years ago, is that for means of
production to become capital they have to go through a commodity stage
in which their value in the form of embodied labor transforms into
value in the form of money ("price is value in the form of money"--
Marx.)
Shane Mage
"All things are an equal exchange for fire and fire for all things,
as goods are for gold and gold for goods."
Herakleitos of Ephesos, fr, 90
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