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Another matter is that VFT
indeed is not a price theory (but this was, I would think, neither
Marx's concern -- to the extent that this is relevant at all: I fully
agree with Jerry's 1705 on this and other matters).
I find this assertion that Marx did not think that prices were
broadly proportionate to embodied labour contents disingenuous.
His account of things in Value Price and Profit is quite explicit:
"What then is the relation between value and market prices, or between
natural prices and market prices? You all know that the market
price is the same for all commodities of the same kind, however
the conditions of production may differ for the individual producers.
The market price expresses only the average amount of
social labour necessary, under the average conditions of production,
to supply the market with a certain mass of a certain article. It
is calculated upon the whole lot of a commodity of a certain
"So far the market price of a commodity coincides with its value.
On the other hand, the oscillations of market prices, rising now
over, sinking now under the value or natural price, depend upon
the fluctuations of supply and demand. The deviations of market
prices from values are continual, but as Adam Smith says:
"The natural price is the central price to which the prices of commodities
are continually gravitating. Different accidents may sometimes
keep them suspended a good deal above it, and sometimes force
them down even somewhat below it. But whatever may be the
obstacles which hinder them from settling in this center of repose and
continuance, they are constantly tending towards it."
"I cannot now sift this matter. It suffices to say the IF supply and
demand equilibrate each other, the market prices of commodities
will correspond with their natural prices, that is to say with their
values, as determined by the respective quantities of labour
required for their production.
His position here is identical with that of Smith and Ricardo, that
the value or natural price of a commodity is determined by its labour
Your attempt to replace this with a statement about agregate
prices is vacuous and of no scientific value you give the formulation
Y = mL , which given an appropriate choice of m, (undetermined
in your theory) must be true. Such a formulation is not a theory
of value at all.
The relevance to Freds point about the impossibility of defining
a theory of the rate of surplus value in your scheme is derives directly
from your attempt to divorce relative prices from relative labour contents.
It is only if prices and values are proportional that the division of
added by labour in the economy between profits and wages ( ignoring
overheads for now), will reflect the labour required to produce wage goods
and surpls goods. If one holds to an embodied labour theory of value
one can predict the profit/wage ratio by looking at the labour required
to produce the wage bundle relative to the total labour expended. In the
absence of an embodied labour theory you can not predict the ratio.
Instead you have a back reflection theory which imputes labour quantities
on the basis of observed prices.
The problem with a back reflection theory is that it is coneptually
the objection to the labour theory of value raised by Steedman. Abstract
labour is then just an adornment of your theory with no causal or predictive
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