[OPE-L] why does the debate on the "transformation problem" continue?,

[Jurriaan Bendien <adsl675281@xxxxxxxxxx>]

Well I am not an economist, but I am sympathetic to Paul Cockshott's
argument - in my opinion though what is really behind the transformation
controversy is the attempt to understand the modus operandi of the law of
value in a capitalist economy, and what concepts are really necessary to
understand the process of mutual adjustments of labour-time, product-values
and market prices (the process of "market balancing" in a competitive
setting, as distinct from the presumption of equilibrium).

If the motivation of Marxist participants in the TP debate is, to try and
prove that relative market prices of new products (trading ratios) are
strongly regulated by labour-time, then empirical tests such as we are able
to construct are appropriate to corroborate that hypothesis. Because no
purely logical proof of that idea is possible.

But if the aim is to understand the process of market-balancing thru time,
on the hypothesis that it is governed by the law of value, then we need
concepts and models to understand and explicate how this determinism
actually works out. And here the transformation problem literature is
relevant, I think, since it seeks to specify the concepts, conditions and
relationships involved more rigorously, tracing out the quantitative
implications.

Following Marx, Ian Wright thus suggests that if we cannot explain the
process in the simplest/purest cases, we cannot explain it at all. Marx
suggests in his manuscript that a general rate of profit would be the final,
logical outcome of the competitive, market-balancing process, at least "in
the purest case". If that case never obtains in reality (he could not verify
that), that is not necessarily a problem, the theoretical problem here is to
depict consistently what forces will shape the distribution of the
surplus-value, and consequently what the developmental dynamic of capitalism
will be. The additional scientific problem then concerns to what extent the
theorised process of market behaviour is only an idealisation, and to what
extent it accurately mirrors the empirically verifiable events - how we
would move from a simplified model to a richer kind of analysis that would
make sense of the empiria.

So if we forget for a moment questions of doctrinal orthodoxy, the real
problems in the transformation problem literature concern what has to be
modelled, how it is to be modelled, and why - here various foundational
arguments are made about logical coherence and consistency. For example, Ian
Steedman suggested once that Marx is logically committed to the idea that a
product has two different prices depending on whether it is purchased, or
whether it is sold, which he regarded as an absurdity.

It is possible that there are not one, but many labour theories of value
which could be devised. Marx's writing is open to interpretation, and he may
have been justified in some assumptions, but not in others. He may have been
quite correct in the general thesis that the relative exchange-values of new
products in trade, usually expressed by money-prices, are normally
proportional to the modal amounts of human labour-time which are currently
socially necessary to produce them. But he may have been wrong in his theory
of the specific modes of regulation through which that proportionality is
established or ultimately asserted.

Jurriaan