[OPE-L] price of production/supply price/value

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Tue Jan 24 2006 - 12:25:47 EST

Something I was thinking about....
Any comment, however critical, welcome.
Yours, Rakesh

If the profit rate did not equalize, the value of a commodity would
be represented as
or (more accurately resolved into) c+v+s, what Marx calls simple
price; however given the tendency towards the equalization of the
profit rate, a tendency which grows stronger with the development
of capitalist markets and the mobility of labour, the value of a
commodity is now represented as m[(1+r)(c+v)], m as the monetary
expression of labor time allowing for the translation between price
of production and labor magnitudes. As Fred has argued, m is given
throughout Marx's theory, and depends in the contemporary economy on
the quantity of fiat money.

At any rate,  such is the value of the capitalist commodity, the
socially necessary abstract labor time it must represent for it to be
produced. In a capitalist society, value is price of production is
supply price.

Value is not the actual labor time required  to produce an object; it
is the abstract labor time, the aliquot of homogeneous social labor
time, that an object must represent for it to be produced. In other
value is the supply price of a commodity.

It may seem that in denying that value is given directly  by the
socially average labor time actually expended in the production of a
commodity, I have dirempted value from the conditions of production
and from the materialist outlook in general. But this is not true.
The overwhelmingly most important factor in changing the social labor
time a commodity represents is  change in (indirect and direct) labor
productivity in that commodity's sector. The conditions of production
are overwhelmingly important but in a mediated way.

At any rate, there is no actual transformation from value to price of
production. Commodities don't possess value or simple price before
they acquire a price of production in and through competition. What
Marx means by value as simple price is counterfactual; simple price
is the value a commodity would have had had there been no competitive
equalization of the profit rate, but the value a capitalist commodity
does in fact have as a result of competition is its price of
production. Because a commodity never has value, qua simple price,
there is never any transformation from value as simple price to value
as price of production. There is no transformation problem. One
cannot transform a counterfactual situtation into an actualized one.
We can however speak of a transformation but a counterfactual one,
from prices of production to simple prices had there been no capital
mobility. That Marx begins in the relevant third volume chapter with
the counterfactual situation has given the false impression that he
is charting in that chapter an actual transformation from one real
set of affairs to another. As I have argued here, what one really has
to do is an inverse transformation, from
price magnitudes to labor values.

Again the value of a capitalist commodity is m[(1+r)(c+v)], with m
giving us the expression of price of production in labor value. That
is the social labor time that a capitalist commodity represents. The
commodity exchanges as an objectification of abstract labor time
(Marx has made that clear from the beginning of Capital, vol 1) but
the determination of its magnitude is a complex social process
that goes on behind everyone's back. No more does an individual
confront sense data
with private and idiosyncratic cognitive equipment (as Kant
demonsrated in his transcendental deduction) than does a producer
alienate a commodity as a private object. Cognition and commodity
exchange are thoroughly social processes.

Yours, Rakesh

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