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

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Thu Jan 26 2006 - 03:52:39 EST

>I think this direction is in general right, but to nail down the
>argument requires more. I too think that Marx's starting point is
>Marx's chapter 9, Vol. 3 has an interesting argumentative structure.
>It seems to go like this (although more than happy to be corrected by
>others more well-versed in this issue):
>(i) Counterfactually, assume (a) the rates of surplus-value in sectors
>are uniform and also (b) assume that prices exchange at values.
>(ii) Deduce from these assumptions that rates of profit are
>non-uniform, which contradicts the principle of uniform returns to
>capital invested.
>(iii) Conclude, then, that (a) and (b) are false; that is rates of
>surplus-value are not uniform and there are price/value divergences.

Ian and Jurriaan,
the question I am getting at is simple: how can we speak of price/value
divergences if price of production is itself a form of value? If price
of production is a form of value, then how can a form of value diverge
from value? Donkeys may be a form of animal, but
we don't speak of donkeys diverging from animals.

There seems to be a lot terminological confusion in Marx.
What I am proposing is that we call simple price one form of value and price
of production another form of value (neither of course is market
price, so we can
still speak of a divergence between value and price;
for example the difference between market price and price of production is
a practically important divergence between price and value, but not
the difference between
price of production and simple price which is simply a difference between
two forms of value).  Simple price and price of production are both
forms of value;
however the former is counterfactual and the latter is actually
social valid (I think
Paul C and Allin grant that there is at least a weak tendency towards
profit rate
equalization). Hence
my equation value=price of production=supply price.

At any rate, just trying to clarify my confusion and the confusion
in Marx's texts. Hope this helps.
Jurriaan, I hope the terminological confusion is clear even if
you take my attempt to resolve it as poetic.

Yours, Rakesh

>Surplus-value is redistributed to capitalists according to capital
>invested, rather than the number of workers they employ in their
>The problem with this argument is step (iii): you can't conclude that
>*both* (a) and (b) are false from the contradiction in (ii). Of
>course, the fact that Marx doesn't transform cost prices, and lacks a
>general equilibrium framework, is cause for further doubt regarding
>the precise details of his argument, at least if we do the Bortkiewicz
>thing and abstract from the dynamic process of the formation of the
>general rate of profit.
>The problem with simply specifying a MELT to translate between prices
>of production and values, as you are proposing, is that, according to
>the neo-Ricardian critique, not all Marx's aggregates (total profit =
>total surplus-value, total price = total value, and rate of profit =
>value rate of profit) will hold. According to this formalisation of
>the problem, there is no MELT that can do this, including Foley's. So
>the quantitative connection between value and price accounting is
>missing, and Marx's thesis of conservation of value in price fails.
>So that's why I think the argument requires more, even if I agree with
>the direction you are taking it.

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