Social Scientist. v 29, no. 336-337 (May-June 2001) p. 76.


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SOCIAL SCIENTIST

While he had converted the right hand side into prices, it was alleged that on the left hand side he had retained the quantities in terms of values. The transformation of values into prices by Marx, it was alleged, was contradictory. The race was on starting with Bortkiewicz through Sweezy, Dobb and Meek, to Seton's simultaneous 'solution', which is identical to Sraffa's model in Production of Commodities by Means of Commodities. The entire exercise was reduced to a theory of determination of relative prices, as both Marx's followers and critics maintained for almost a century. However, as pointed out by Bellofiore, "the solution that was eventually reached looks rather like a dissolution."

For, "Once the conditions of production are known and real wages quantified, relative prices and equal rate of profit may be fixed without the need to start from exchange values, and hence collapsed any possibility of a prior determination of the rate of profit in value terms. If, as a consequence, Marx's value theory is rejected, then the notion of exploitation runs into trouble. Having glanced at Marx in the 1950s and 1960s, in the mid-1970s mainstream economists found unexpected allies among some of Sraffa's followers, who declared that after Sraffa not very much of Marx's original building stood up - and they soon passed to other themes."

The villain of the piece appears to have been Sweezy who was guilty of projecting Bortkiewicz as a saviour of Marx. Marx's original schemes for determining prices of production were tackled by Bortkiewicz by converting the statements into a system of linear simultaneous equations, and then finding solution sets for such a system. Technically speaking, Bortkiewicz had brought in the mathematical instrument of linear algebra through his assumption of simultaneity.

The only major Marxist economist who did not fall victim of this simultaneist assumption was Ernest Mandel who, writing as far back as in 1962, had declared in his book Marxist Economic Theory, that Sweezy was mistakenly trying to rehabilitate a critic of Marx, namely L. Von Bortkiewicz. In a footnote he says "Von Bortkiewicz shows a similar lack of historical sense when.... he declares that the. transformation of value into prices of production does not reflect any real historical process."

The story is the same with the law of the falling rate of profit. While projecting Bortkiewicz as salvaging Marx's derivation of the prices of production, Paul Sweezy pointed out that with the new formalism, the falling rate of profit theory faces a collapse. His famous



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