[OPE-L:4209] Re: Re: Part Two of Volume III of Capital

From: Duncan K. Foley (foleyd@cepa.newschool.edu)
Date: Sat Oct 21 2000 - 17:38:30 EDT

In reply to Rakesh's comments:

I think the Classical long-period concept of natural price does allow 
for the natural price to change gradually, probably most often as a 
result of changes in labor productivity (though that's not the only 
possible reason). It's also plausible to suppose that the average 
rate of profit evolves on an even broader time scale, since some of 
the fluctuations in natural prices across sectors will cancel out.

I think the difficulty in interpreting Marx's transformation tableaux 
is to situate them in the Classical long-period theory of competition 
and the emergence of natural prices (or prices of production). If 
they were supposed to be a literal representation of the temporal 
evolution of market prices why wouldn't they fall victim to Marx's 
general argument that the laws of capitalist production only emerge 
as the average of ceaseless fluctuations? To put this in another way, 
why should the profit rate be exactly equalized across sectors in 
each period?

Maybe I missed the post in which you included the "textual evidence" 
that convinced you that my general interpretation of Marx as a 
long-periodist was off the mark.


>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!
Duncan K. Foley
Leo Model Professor
Department of Economics
Graduate Faculty
New School University
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