[OPE-L:4834] Re: Re: Re: Re: Re: rent and the working class

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Sun Feb 04 2001 - 15:04:01 EST

re 4830

>Yes, I argue that Marx's prices of production are "long-run center of
>gravity" prices, in the sense that they are prices that equalize profit
>rates across industries as a result of the transfer of capital and that
>they are the "centers of gravity" around which actual market prices

I just don't see how this works. Technical progress is uneven. In 
some branches, steep depreciations in unit values are leading to an 
expansion of the market and  hefty increases in the mass of profit 
realized. Now to the extent that capital markets are efficient (in 
the Michael Jensen sense) they are disgorging capital from older 
industries and channeling it to the more dynamic branches. They 
(capital markets) will thus militate against the the uneveness of 
technical change from disrupting the inter-industry equalisation of 
profit rates. And this of course will happen more or less perfectly. 
But in no sense  are unit prices converging on some equilibrium state 
in this process. I just don't see the justification for input prices 
at t0 being equal to output prices at t1. The idea of stationary 
prices is logically independent of the tendency towards the 
equalisation of profit rates.

Oh well, that's it for now.

>With regard to your second paragraph above: (1) Where is the passage that
>Ricardo says that prices change on a daily basis due to technological

"alterations in the quantity of labour necessary to produce 
commodities are a DAILY occurence. Every improvement in machinery, in 
tools, in builidngs, in raising the raw material saves labour, and 
enables us to produce the commodity to which the improvement is 
applied with more facility, and consequently its value alters." 
(Principles, p. 36, Sraffa's ed; my emphasis).

Yours, Rakesh

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