[OPE-L:5154] Re: Re: Re: Re: Comments on 3 recent debates

From: Allin Cottrell (cottrell@wfu.edu)
Date: Mon Mar 12 2001 - 13:43:44 EST

On Sat, 10 Mar 2001, Fred B. Moseley wrote:

> I am finally getting around to replying to Allin's (5051) of Feb.
> 23.


> Allin, you seem to be suggesting that prices of production may
> change in a given period, even though productivity remains
> constant in that period, due to changes in productivity in a prior
> period (i.e. that prices of production will change from period to
> period as part of a "lagged adjustment process").  Do I understand
> you correctly?


> If so, then you seem to be confusing two different concepts -
> prices of production and market prices.... Assume a given change
> in the productivity of labor.  This change in productivity
> determines a new price of production for at least one commodity
> (let's assume just one).  However, the actual market price of this
> commoditiy does not immediately adjust to the new price of
> production, but rather adjusts over a number of periods (i.e. a
> "lagged adjustment process").  In each period of this adjustment
> process, the actual price of this commoditity is equal to a market
> price that it is not yet equal to the new price of production.

I see your point.  And that's the way I'd look at at myself (insofar
as market prices do in fact tend to adjust towards prices of
production.)  But I was commenting on your critique of Andrew, and his
view is a bit different: his prices of production are prices which
equalize the rate of profit (on the "output" side) on the basis of
whatever prices for inputs happened to be in force at the "start of
the period".  These prices of production of Andrew's (which, N.B., are
_not_ market prices, since an equalized rate of profit is never
observed in the market) are subject to a lagged adjustment of the sort
I described, the end point of which (ceteris paribus) is the vector of
prices of production in the sense you (and I) favour.

To rephrase my point in [5051], I'm saying that your textual evidence
from Marx in terms of what does and does not cause prices of
production to change does not seem to me decisive in adjudicating
between Andrew's concept of prices of production and the alternative.

Allin Cottrell.

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