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

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Thu Jan 26 2006 - 20:37:10 EST

>Hi Rakesh
>>  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.
>Say that "age" is a "form of time". Jim tends to lie about his age and
>subtracts 5 years when filling out forms. Bob tends to lie in the
>other direction and adds 5 years. If we sum the age on the forms, the
>aggregate age is equal to the actual time that Jim and Bob have been
>alive. But the individual ages diverge from the actual time.

But for the purposes of the pension system Bob is in fact five years
older. Tell Jim that he is really the same age as Bob as he must labor those
five more years. If it's a mine in Bolivia or West Virginia, he
may not even make it. Because the lie is a matter of life and death,
the distorted ages are more real, of greater practical importance
than what you are taking to be real ages of these two chaps.I am saying that
the ages on which the pension system acts determines the real age of
these two guys.

In other words, value as simple price is a magnitude of no real
importance. Just
as for the purposes of the pension system the so called real age is
not important.
In fact value as simple price is of much less importance that total
value and total surplus value.
In bourgeois society, the value of a commodity is its price of production
multiplied by the value of money.

The classical economists had no idea of how complex the social mediations
were in the determination of value, so they simply equated simple
price with price of production, allowing for a small perhaps 7% error.


>The purpose of my example is to suggest that terminological
>considerations aren't sufficient to ground your claim that there there
>isn't divergence between values and price of production.
>>  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.
>You can do that. But, according to the neo-Ricardian formalisation of
>the transformation problem, it is difficult to believe that price of
>production is a form of value, because the accounting doesn't add up
>-- there is non-conservtion of value in price. Simplifying a lot, the
>ages on the forms do not add up to the total time Jim and Bob have
>been alive.

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