Re: [OPE-L] The Law of Value and Rib Tips

From: Gerald_A_Levy@MSN.COM
Date: Thu Feb 10 2005 - 08:09:58 EST

> I think it is entirely a joint production problem.
> First, suppose that the division of rib and rib tip is held constant in
> some sense, some regulation that specifies what a rib tip is and
> what a rib is. So an amount a of rib tip is always produced with
> an amount b of rib.  That seems to be a case of rigid joint production.
> So there is only one commodity, the embodied labour value of the
> rib tip part of the commodity is equal to the value of the money it
> sells for, and the same for the rib part.  Costs,  labour-time etc. are
> then divided between the two parts in proportion to revenue.

Hi Phil:

Let us recall again Red Kronstadt's question:

"At every step *these two erstwhile commodities share identical costs
of production*.  And yet, in spite of the fact that there is a greater
weight per pig of ribs than rib tips, at any given BBQ stand *a, say,
pound of ribs will cost you more than a pound of rib tips*. Why?."

In other words, the costs of production of a pound of ribs and a pound
of rib tips are identical, but the *price* of the two will be different.

So, when you say that there is "only one commodity" that posits a
condition that is fundamentally different from the one RK asked about.

> Second, suppose that the division is variable.  It is then possible for
> the butcher to vary the ratio, by weight say, of rib tips and ribs.  Then
> think we have two commodities.

RK suggested a situation in which both rips and rib tips are sold by
the pound.  Of course, there *are*  2 separate commodities.  The question
-- which unless I missed it you haven't answered -- is:  *what explains the
difference in price where you have two related commodities produced by
the same firm with identical costs of production*?

I have a couple of  additional, special questions *for you* (which seek
to probe your perspective further):

1. How can it be that:

*  the value of ribs (Rv) /pound is = to the value/pound it sells for (Rp)
*  the value of rib tips (Tv) / pound is equal to the value/pound it sells
for (Tp)
*  when Rp does *not*  = Tp
*  but the costs of production of ribs (Rcop) / pound =
   the costs of production / pound of rib tips (Tcop)  ?

2. Has demand no role at all in determining the relative prices of ribs and
rib tips?

In solidarity, Jerry

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