[OPE-L:4117] Re: Part Two of Volume III of Capital

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Mon Oct 16 2000 - 14:58:40 EDT

Re Duncan's 4099

>2) I didn't see much positive evidence that Marx was a temporalist. 
>I could discern no explicit discussion of the timing of prices and 
>profit rates. It seems to me that the temporalist claim has to rest 
>on an indirect argument that it is consistent with some of the 
>conclusions Marx drew (the conservation of total value, constant 
>capital, and the profit rate in the movement from the embodied labor 
>accounting to price accounting) rather than on direct evidence. The 
>problem with trying to establish an interpretation through an 
>indirect argument of this kind is that there might be some different 
>interpretation that also preserves those conclusions. (Sherlock 
>Holmes recommends the rather dubious logic that once you eliminate 
>all the impossibilities, whatever remains must be the true 
>explanation. But I never understood how Holmes could be sure that he 
>started with an exhaustive list of all the possibilities.)
>3) Reading the whole of Part Two of Volume III together, I found 
>strong reasons to think of Marx as a "long-periodist", that is, as 
>adopting the methodology of long-period positions in his reasoning. 
>He explicitly links his discussion to Smith's theory of competition, 
>and the adopts characteristic long-period language, such as the 
>distinction between natural and market price.

To repeat my first textually based criticism: while Marx argued that 
changes in prices of production due to changes in the general rate of 
profit would take a long period to manifest themselves in the face of 
random and cyclical fluctuations in the profit rate in the short term 
(see also Capital 3,p.269-70), Marx also recognized  prices of 
production  are changing over shorter periods due to  changes in the 
values of the commodities themselves. Moreover, by maintaining money 
as a theoretical reference point, this shorter term or interperiodic 
change is rendered more obviously visible than in a less rigorously 
conducted thought experiment.

Also, even if total cost prices for any industry were to remain 
stable either in relative or absolute terms over a longer period, 
*unit* prices (as well as surplus value per unit) will still be 
changing interperiodically as a result of rising labor productivity. 
I haven't seen any textual evidence yet that Marx thought unit prices 
would only change over the long term even as he was keeping the value 
of money constant!

  Marx of course considers just this point--changes in unit price as r 
remains stable--at the end of Capital 3, ch 9.

  Again for the transformation to go through, *unit prices* need only 
to be interperiodically changing in statistically insignificant ways 
as I have tried to show in my exchange with Allin.

Once the transforming of the input *unit* and output *unit* prices 
isn't computed simultaneously as with general equilibrium theory 
(have almost finished a fascinating book by Bruna Ingrao and Giorgio 
Israel, The Invisible Hand: Economic Equilibrium in the History of 
Science but have obviously got tied up here and there), the problem 

By the way, Hayek's point that once money is introduced, simultaneism 
disappears seems apposite (though only suggestive):

"From the moment at which the analysis is no longer concerned 
exclusively with prices which are (presumed to be) simultaneously 
set, as in the elementary presentations of pure theory, but goes on 
to a consideration of the monetary economy, with prices which 
necessarily arise at successive points in time, a problem arises for 
whose solution it is vain to seek in the existing corpus of economic 
theory." quoted on p. 232 of Ingrao and Israel.

Moreover, Duncan, if there are presumably no shorter term or 
interperiodic change in prices of production or so called natural 
prices of machines, wage goods and raw materials,  then how are we to 
make sense of Marx's analysis of the release of capital? Do you read 
Marx as saying here that capital is only released over the long term?

Should we Marxists really be in search of the elusive vector of 
equilibrium prices and dismiss any theory by which such a thing 
cannot be determined?

All the best, Rakesh

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