What transformation problem? 2 of 3

I know that many of you are clamoring for more videos on crisis theory. This video began as a minor tangent to my crisis series and ballooned into a major project, taking up way more time than I expected. I hope to return to crisis theory soon. In the meantime, this video should be helpful for those interested in the relation of value to price and the debate around this issue.

Full Text can be read at: http://kapitalism101.wordpress.com/what-transformation-problem/

math supplement:
http://kapitalism101.wordpress.com/transformation-math-supplement/

Bibliography

Reclaiming Marx's Capital by Andrew Kliman

One System or Two? The transformation of values into prices of production vs. the transformation problem a paper by Andrew Kliman and McGlone. This available on Klimans website: http://akliman.squarespace.com/

Marx's Theory of Value and the Transformation Problem- an essay by Anwar Shaikh from the book The Subtle Anatomy of Capitalism ed. Jesse Schwartz

Limits to Capital by David Harvey

Das Kapital vol. 3 Karl Marx

Category:

Education

Tags:

• bortkiewicz
• into
• karl
• marx
• of
• price
• prices
• problem
• production
• transformation
• value
• values
• walras

[clubsandwedge]

I understand the mechanism of the average rate of profit in a particular industry but I don't understand how the average rate of profit applies to more or less mutually exclusive industries where competition is not present between businesses (eg. McDonalds aren't really in competition with Walmart). I expect I am not seeing the whole picture here. Care to give me a hand?

[brendanmcooney]

@clubsandwedge. Average rate of profit between industries is the result of the flow of capital between industries, searching out the best profits. High profits attract more investment which increases production, eventually bringing profits down. however, though there is a tendency toward average profit rates, in reality many factors interceded to keep rates between industries from actually becoming average.

[Questfortruth86]

When I look at a tooth brush, I generally don't care about how many hours it took to make, nor do I care about the working conditions of the worker, the complexity of the capital, or the fertility of the land. Rather, I ask myself if this tooth brush will satisfy my desired end, and then I ask myself what else could be bought with my money which may satisfy that end better, or satisfy another end I deem more valuable.

[brendanmcooney]

This comment has nothing to do with the transformation problem. Instead it is another boring repetition of your subjective experience of an objective phenomenon. Just because you have a subjective experience of an objective phenomenon doesn't mean that the objective phenomenon doesn't exist. I will delete further off-topic comments left on this video.

[geor8219]

i was paying close attention to everything you said.... until i saw that hat LOL... it threw my concentration off....

excellent vids brendan, thanks for making and posting these

[clubsandwedge]

@MajorRoy So would I be missing anything if I said that underlying the average rate of profit mechanism is a tendency for the organic composition of capital to equalise due to investment?

[MajorRoy]

@clubsandwedge Because more machines means fewer people, a machine replaces workers, makes the factory less dense on humans. This means fewer people have jobs wich of course means lower demand for products, meaning that it becomes an increasingly worse deal to invest in factories over time. Thus enters the financial sector.

[clubsandwedge]

@brendanmcooney How is it that increased production within an industry in general eventually brings profits down?

[bernd9000]

somehow i did not get the statement from 7:05 on. and i guess it is kind of crucial to the topic at hand. maybe someone can clarify this or indicate further reading??? thx in any case.

[brendanmcooney]

@sacredsoma. If I understand your question correctly: No exploitation is not a market phenomenon. All goods, including labor power, can trade at their values and profit can still be made thru exploitation. This because there is a difference between a wage and labor power (the ability to produce value).

re. "financial schemes are more devastating w/o any real value". Financial schemes can only be more or less devastating in relation to the real world of value that these credit $'s lay claim to.

[sacredsoma]

@brendanmcooney

I understand this power to produce a varying about of value but isnt the eventual reflection of this exploitation a distortion which is not dissimilar to a price hike or manipulation possible outside the sphere of value production (industries which have at least some workers(v)) ...why is a disparity in the workshop considered as the core ...financial schemes appear to be more devastating without any real value (as defined LTV)involved

[sacredsoma]

@brendanmcooney

Sorry dude but didnt u just explain in the course of the video that even though most times prices in general average out to reflect, not equate values (in free markets without monopoly etc...which dont exist anyway) that it is more than common that they would not correspond to the value or the labor time required to produce those commodities...so how does this differ from price of labor power not corresponding to the value it produces.

[SecularNumanist]

@Questfortruth86

that has nothing to do with the transformation problem. thats just you repeating the mudpie argument. try watching the video