[OPE-L:3666] Re: Re: cost-price

From: Steve Keen (s.keen@uws.edu.au)
Date: Tue Aug 15 2000 - 01:59:13 EDT

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Hi Fred,

No argument at all with your comment on my profferred piece from WL&C. I
was simply trying to put forward a statement in which it was quite clear
that, contra Rakesh's statements, Marx used "cost of production" in
different ways, some times in the "prices of production" sense, other times
in the "costs not including profits" sense.

I failed to convince Rakesh on that front--and have abandoned the
endeavour--but I completely concur with your statements on the subject.

At 01:46 PM 8/14/00 -0400, you wrote:
>This is a comment on the discussion on "cost price".
>John E. is correct: Marx used the term "cost price" with two different
>meanings in Theories of Surplus Value (TSV) (i.e. in the Manuscript of
>1861-63) and in Volume 3 of Capital (C.III) (written in 1864-65). However,
>this is merely a change in terminology, with no change in substantive
>content. Marx emphasized throughout that profit is not a cost. On this
>substantial issue, Rakesh is correct (I imagine John would agree).
>In TSV, Marx began to develop for the first time his explanation of prices
>that equalize rates of profit and he used the terms "average price" and
>"cost price" to refer to these prices (TSV, Vol. 2, especially Chapter 10
>on "Ricardo's and Smith's Theory of Cost-Price"). In this sense, "cost
>price" obviously includes profit. However, this does not mean that Marx
>considered profit to be a "cost". Marx clearly distinguished between the
>actual costs (constant capital and variable capital) and the surplus-value
>or profit over and above these costs. Later in the Manuscript of 1861-63,
>in a part recently published for the first time (Marx-Engels Collected
>Works, Vol. 33, pp. 78-103), Marx discussed the "costs of production"
>(which is what he later called "cost price" in C.III.). To quote just one
>"Profit therefore = the excess of the value of the product … ABOVE the
>value of the capital advanced… Cost of production means everything, all
>the components of the product the capital has PAID FOR." (p. 81; emphasis
>in the original)
>In C.III, Marx changed his terminology, perhaps in order to make this
>distinction between costs and profit clearer. He then used the term "price
>of production" to refer to prices that equalize rates of profit, and the
>term "cost price" to refer to the actual costs of constant capital and
>variable capitial.
>Marx's main point with respect to the concept of cost of production, and
>the later concept of cost price, is that no distinction is made between
>constant capital and variable capital, and hence the source of
>surplus-value or profit is obscured.
>In this context, we can see that Steve K.'s passage from "Wage Labor and
>Capital" is largely irrelevant. This text was written in 1849 (on the
>basis of speeches given in 1847) when Marx was just beginning his economic
>studies and before he had developed his own theory and his own system of
>concepts, and a long time before he had reached terminological clarity with
>respect to prices that equalize rates of profit. We should always
>consider specific passages of Marx's within the chronological context of
>the development of his thinking.
Dr. Steve Keen
Senior Lecturer
Economics & Finance
University of Western Sydney Macarthur
Building 11 Room 30,
Goldsmith Avenue, Campbelltown
PO Box 555 Campbelltown NSW 2560
s.keen@uws.edu.au 61 2 4620-3016 Fax 61 2 4626-6683
Home 02 9558-8018 Mobile 0409 716 088
Home Page: http://bus.macarthur.uws.edu.au/steve-keen/
Workshop on Economic Dynamcs: http://bus.macarthur.uws.edu.au/WED

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