Re: (OPE-L) Re: Negative values in pure joint production

From: Philip Dunn (pscumnud@DIRCON.CO.UK)
Date: Wed Oct 13 2004 - 11:40:15 EDT


Hi Jerry

uoting "Gerald A. Levy" <Gerald_A_Levy@MSN.COM>:

> >>> DumÚnil and LÚvy (1999, p.17, 2000) reach an impasse:
> "Each joint product is disaggregated into as many single production
> processes as commodities produced.  The difficulty lies in allocating
> inputs to the various commodities.  A problem of indeterminacy is
> posed, that the theory of value, in the strict sense, cannot solve." <<<
> 
> Phil,
> 
> Although the issue as posed by Sraffa et al concerned basic theory,
> did you ask whether there is a _real_ indeterminacy?  If one
> considers actual cases of joint production (such as the chemical
> industry where a single technology can be used by a single firm to
> produce dozens of distinct commodities) then the determination
> of value and market price on the micro  level -- especially given
> the degree of product differentiation and advertising -- becomes
> very complex, to say the least.

DumÚnil and LÚvy have, I think, correctly analysed the problem as framed in
physical quantities I/O theory.  There is simply no _technical_ rule for
splitting inputs among outputs in rigid joint production.  I would agree that
rigid joint production is not very important in the real world.
  
> 
> >>> If we were to follow Sraffa here I think we would have already
> gone wrong.  Firstly, we should not operate with industries or
> processes.  We should talk about firms rather than processes. <<<
> 
> Why not talk about industries or branches of production?  Why
> not talk about different technologies/processes being used within
> an industry/branch of production by capitalist firms?   You obviously
> must have reasons for arguing that the focus should be on firms
> rather than industries and processes but you have not indicated
> what they are.

The firm is the entity that does the buying and selling. Industries and
branches involve aggregation.  Why complicate things? The contrast is with
Sraffa's process which abstracts from buying and selling. Things like old
machines and partly finished goods have prices, even though they are never
sold.

> 
> >>> Further, we assert the principle that no two firms produce the same
> commodity.  <<<
> 
> Why?
> 
> >>> They may produce very similar, even practically indistinguishable,
> use-values but never the same commodity. <<<
> 
> This is generally the case in late capitalism, but the explanation is
> to be found by examining the changing forms of competition.
>

Farm A and Farm B both grow corn.  There is no practical difference between A's
corn and B's corn.  As use-values they are the same (although there are
material differences between A-corn and B-corn -- A-grown was grown on Farm A,
B-corn was grown on Farm B.).  But the similarity of use-value does not entail
the sameness of the commodities. 


> >>> Sraffa's joint production processes are rigid in the sense that the
> joint products are produced in fixed proportions.  If there is only one
> firm producing them we do not know how to split the constant capital
> transferred and the labour-power expended between the two products.
> Is this a problem?  It would be a problem if, in this situation, the firm
> were producing two commodities.  But is it?  It produces two different
> types of use-value certainly.  But why should we assume it is producing
> two different commodities?  I shall argue that in rigid joint production
> there is only one "composite" commodity.
> 
> I'm not sure if the following example is one of 'pure' joint production
> but you can tell me if I'm mistaken.   Suppose there is a single firm  using
> a single technology/process to produce shoes and boots.  Aren't the
> shoes and boots 2 different commodities?  It is hard to imagine a
> single 'composite' commodity  (a shoot? ... a bhoe?).  In any event,
> in this case what would prevent a firm from, for instance, selling shoes
> at a price below their value and boots at prices above their value?
> 

It is always an option, ontologically, to treat a firm's production as one and
the same commodity.  This does not rule out recognising several different
commodities.  It is preferable, epistemologically, to do so but useful to have
the one commodity option to fall back in case 'negative values' and the like
crop up.

Prices deviating from values? Impossible!

> >>> Rigid joint production of limited interest.  Production where outputs
> are produced in flexible proportions presents a more challenging
> problem.  <<<
> 
> OK.  What do you see as are the issues posed at that more challenging
> level of analysis?

With flexible methods of production something like Sraffa's two methods returns,
and with it the possibility of negative values.


Philip Dunn


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