European Unions

Rakesh Narpat Bhandari rakeshb at Stanford.EDU
Sat Apr 7 11:05:56 PDT 2001



> > Dennis (P), I would have advised you against writing such vulgarity
>> as it may give people the impression that you hate even the idea of
>> a such a jerk only because you are painfully embarrassed about the
>> size of yours.
>>
>> RB
>
>The old "my dick's bigger than yours" bit. See, you're getting closer to the
>people already.
>
>DP

Look Dennis, I don't see what your problem is. You are now striking out against Yoshie though just a while ago you were praising her command of social theory. So I take it that you are angry about some of the technical questions which I asked Shane Mage about the major bourgeois economic criticism of Marx's labor theory of value. I used a lot of Marx's concepts and a few other concepts (flow price and rental of the machine). If you want to debate Marx's labor theory of value in terms of the criticism called the transformation problem, read Sweezy's Theory of Capitalist Development or Foley's Understanding Marx's Capital.

Here is the problem. Marx argues that value is determined by labor expended, yet it is also observed that capitalists claim profit on the basis of the money they have invested in the purchase of means of production and the hiring of workers.

So say you have capitalists who have invested

MP W I. 80 20 II 70 30 III 60 40

Now each capitalist will want the same mass of profit on the money which he has invested--$100 in all cases.

Now assume that each dollar purchases one worker. So in case I you have 20 workers, the second case 30 workers and the third case 40 workers. So that would suggest that less labor has been expended in the first branch and that its commodity output thus embodies less labor than in the second branch and the third branch.

Now if labor expended determines value, then the output of branch one should sell for less than branch two than branch three. But if that were the case, then capitalists would not be making equal profits on their investments. Capitalists would leave branch one and move to branch three where they could make bigger profits.

In his debate with Ricardo, Malthus argued the observable equalisation of the profit rate runs counter to the determinatin of value by labor time since in advanced capitalist production the relation between means of production and labor hired would vary quite a bit.

This is quick and VERY dirty; there are numerous careful expositions of the problem. If you want to understand and take a position in the debate, I urge you to do so.

Rakesh



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