Shane please correct correct me if I have misunderstood you.
But are you not saying here that the price flow of the machine *is* the value transferred from the machine even though the value of the consumed means of production will differ from the market price (or production price) of the depreciating machinery as it enters to the determination of cost price?
And wouldn't this be the same claim which you advanced in your critique of Sweezy's handling of the Bortkiewicz transformation problem in your dissertation (p.242) from the early 60s? (Your brother John was kind enough to give me a copy of this dissertation--by the way, do you know anything of the dissertation by Bernice Shoul, The Marxian Theory of Capitalist breakdown. Radcliffe April 1947--I am waiting for the library here to order a copy).
As I see it there are some problems with your formulation, though I certainly agree with you that Sweezy was wrong to follow Bortkiewicz in charging that the cost PRICES in Marx's transformation tables were left in the form of commodity values (I think this criticism is at least implicit in what you write, no?).
The cost prices certainly do reflect the money capital which was advanced as constant and variable capital to purchase means of production and indirectly wage goods at market prices which tend to be close to prices of production. There is certainly no reason to transform the inputs from values to prices, as one hundred years of dogma has had it. You may have been the first to point this out (if I follow you); now Fred Moseley, Paul Mattick, Jr, Alejandro Ramos, Mino Carchedi and I follow you.
But I believe there are problems with your interpretation.
Note that Marx argues that one of the two reasons why the value of a commodity differs from its price of production is that while value is in part determined by the *value of the consumed means of production* (the other part is of course the newly added value by current labor), price of production is calculated on basis of the cost price into which *the price of production or market price of the depreciated means of production* enters (Capital 3, p. 309).
But if the value transferred from the means of production were the same as the price flow of the machine, then the discrepancy between the price flow and value flow of the means of production could not be a reason for the divergence between value and price of the commodity output, as Marx says it is both in Capital 3 (p. 309) and TSV III.
That is, your interpretation makes it impossible for you to explain why Marx says there are two reasons why the value and price of production of a commodity differs.
I would argue that Marx himself points out (Capital 3, p. 265) that he was wrong to do exactly what you say he should be doing. That is, Marx himself realizes that in his transformation tables he determined the value transferred from the machines by equating it with the price flow of the machines, as is visible in his transformation tables.
What Marx is saying is not that the inputs have to be transformed from values to prices (the standard interpretation of where Marx went wrong) but rather that he was wrong to infer the value transferred from the machine from the cost price data. Since his transformation procedure makes it clear that the value of the consumed means of production could not have been the same as the price flow, Marx then notes that he was wrong to have made that assumption in the determination of commodity values in his transformation tables in Capital 3, ch 9.
In other words, Marx failed to transform the prices of production of the input means of production BACKWARD from prices of production to values in the determination of the values of outputs.
I thus argue that Bortkiewicz, Sweezy, Foley and many others pretty much understand Marx to himself be admitting to the exact opposite error he does lay bare on p. 265 of Capital 3.
To put it yet another way: In construcing the tableaux Marx had forgotten his fundamental principle that value relations cannot treated as if they are observable and directly measurable. This follows from how the fetishistic price form represents and necessarily misrepresents value.
Value, like Boltzmann's atomic hypothesis, after all is a category of understanding, not a category of depiction. This of course no more makes value a useful fiction or Sombartian gedankensbild than atoms. It's no less reasonable to attribute reality to value though we cannot observe and directly measure it than it is for a child to learn that a teddy bear which is shown and then put behind a screen is still there but out of sight. Of course unlike the teddy bear, value is indeed detectable.
The urge to attribute reality to objects we cannot see is something we all learn at an early age, and which is essential to our being able to navigate in the real world. But the Machian stricture against unobservable has been applied by several critics against Marx's value theory on the grounds that it represents unfounded theoretical speculation.
There are a few other challenges which I would put to you. But that's enough for now.
Yours, Rakesh