[OPE-L:8622] Re: Re: Re: Re: long term centers of gravity?

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Mon Mar 17 2003 - 13:53:48 EST

Fred wrote

>  >
>>  > More
>>  > frequent productivity change certainly does NOT mean that there
>>  is
>>  > CAUSE of changes of center-of-gravity prices - because input
>>  prices
>>  > are
>>  > not equal to output prices, as in the TSS interpretation.

And then asked:

>Is there no argument here either?  This is the crucial point.

Yes I disagee with this; as I wrote in earlier post: "Well putting 
aside KM, the point remains that prices of production  do  change 
interperiodically, if not continuously,  not because input  prices 
are not equal to output prices but because the productivity of  labor 
changes interperiodically. This is why on your own terms  prices of 
production cannot be long-run centers of gravity."

>Rakesh, please read again the quote from Carchedi below, and my
>paraphrase, which you say you agree with.  Carchedi is saying precisly
>that, when there is technological change in a given period, then constant
>capital is revalued in that period, so that the value transferred to the
>output is the current (i.e. revalued) value of the constant capital;
>i.e. input prices are equal to current output prices.  Carchedi does not
>differ from me on this crucial point.  We agree.

Fred, as I (and Allin) have said before: I think you are conflating 
price and value.

Carchedi and you may agree that the value transferred is changed and 
that value transferred is the revalued value of the means of 
production, but input prices for what are now backward firms (or 
plants) are still a given precondition, and cannot change as a result 
of this revaluation of the value of the means of production. If 
Carchedi himself disagrees with that, then I disagree with him too. 
Of course for those firms which paid more for the means of production 
than they are now worth, they will suffer a loss of profitability. 
Laibman himself underlines this in his critque of Kliman.

Moreover, we have a further disagreement. You argue that *value 
transferred* is determined by the current *price* of the means of 
production while I argue that it is determined by the current *value* 
of the means of production.

Because you make the former assumption, your interpretation cannot 
accomodate Marx's point that there are two reasons for divergence 
between values and price.
As the above paragraph makes clear, your interpretation (as well as 
TSS's!) simply conflates value and price.

Yours, Rakesh

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