[OPE-L:4814] Re: Re: Re: rent and the working class

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Tue Jan 30 2001 - 14:27:00 EST

In 4800

>Allin, I argue that the quantities of money-capital that are taken as
>given are long-run average prices.  It is assumed that the economy is in
>long-run equilibrium (i.e. equal profit rates across industries) and that
>prices are long-run average prices, i.e. prices of production.  Therefore,
>these quantities of money-capital that are taken as given are not affected
>by the deviations of market prices from prices of production.

here is another disagreement. I was convinced by Andrew K on this 
issue. I don't think Marx thinks there is a real tendency towards 
stationary prices in the long term. There is a powerful tendency 
towards the equalisation of profit rates along with a 
counter-tendency for the search for surplus profit (Grossmann, 
Mandel). Marx is perfectly justified in abstracting from the latter 
in his study of prices of production. But in the analysis of the 
tendency towards the equalisation of profit rates, I do not read Marx 
committing himself to the real existence of any tendency for the 
system to settle down into a set of stationary prices, i.e., unit 
input prices = unit output prices. As Paul Mattick Jr, John E, Andrew 
K, Alan F and Mino Carchedi have all correctly argued, this 
assumption should play no role in the formalisation of Marx's theory 
of price which is thoroughly dynamic (see of course Korsch's chapter 
on some misinterpretations of the law of value in his Karl Marx).

  I have quoted Ricardo himself saying that prices are changing on a 
DAILY basis due to technical change, and in Vol 3, ch 9-10, Marx 
himself says that only in the long term do prices of production 
change due to definite changes in the average rate of profit itself, 
while all other changes--that is, changes in prices of production in 
the shorter term should be attributed to a change in the value of 
commodities themselves. Marx's language here is in fact quite similar 
to Ricardo's. In short, there are no long run average prices. Andrew 
B has found exactly one quote from a footnote in Vol 1, ch 5 in 
support of the claim that Marx believed that there was a real 
tendency towards long term or stationary prices of production, but as 
John Aschcroft would say the totality of the evidence is against him. 
I haven't yet read Abelardo Marino Flores' piece  "Market Price of 
Production: A Structural Interpretation of Disequlibrium in the 
Framework of the Law of Value" in International Journal of POlitical 
Economy, vol 28, no 4: 82-118

All the best, Rakesh

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