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

From: Andrew Brown (A.Brown@LUBS.LEEDS.AC.UK)
Date: Mon Jan 30 2006 - 13:44:28 EST

Thanks Ian,

It may be insignificant but the notion of Marx's LTV being 'redundant'
or 'inconsistent' does not capture the notion you are stressing of there
being 'no necessary relation' between value and price systems. E.g.
labour-time could be redundant even if there is such a relation.

I just had a quick look at Steedmans' 'Marx after Sraffa'. His summary
of key points at the end does *not* stress the 'no necessary relation'
point. It stresses redundancy and inconsistency. In fact, Steedman
argues that values are derivative of the profit rate, rather than vice
verse (since production techniques are chosen according to the principle
of profit maximisation). In that sense there is a relation between
values and prices, on Steedman's account, but allegedly running in
reverse direction to that in Marx's theory. 

Imo, the economic basis for refuting neo-R critique lies in the
necessity for there to be limits on prices, to ensure enough needs of
workers are met, and enough profit needs of capitalists are met, across
the economy and through time. These limits are given by SNLT. 

The theory of exploitation shows in essence how the system actually
enforces these limits. But it is folly to think that at any point in
time the aggregate equalities actually hold at market prices because the
limits take effect only through rupture and crisis.


-----Original Message-----
From: OPE-L [mailto:OPE-L@SUS.CSUCHICO.EDU] On Behalf Of Ian Wright
Sent: 30 January 2006 17:09
Subject: Re: [OPE-L] price of production/supply price/value

Hi Andy

> Which references would you suggest most clearly put the Neo-R critique
in this way?
> Steedman's famous book (which I haven't studied closely) doesn't
really pursue this line of
> argument systematically, in the sense that he is much more concerned
with systematically
> showing redundancy and inconsistency of Marx's LTV.

The disconnect of labour value and price in the aggregrate is implicit
from Sraffa onwards. Sraffa's reduction to dated labour representation
is a function of the profit rate (r); hence, according to
neo-Ricardians, price is irreducibly dependent on income distribution
(the value of r). In contrast, Sraffa's representation of labour
values (implicit in footnotes and appendices) is invariant over income
distribution, and does not depend on r. Hence there is an
"informational gap" between the two accounting systems. Samuelson's
Sraffa-inspired 1971 paper in Journal of Economic Literature brings
this out fairly clearly (his "eraser" critique). Pasinetti emphasises
the disconnect between the dual accounting systems in his classic and
very clear presentation of the neo-Ricardian critique of Marx's vaue
theory in "Lectures on the Theory of Production". Steedman repeats
Samuelson's eraser critique (his "scissors" or two prongs diagram;
can't quite recall how he describes it), and adds new criticisms.
Fast-forwarding, Abraham-Frois and Berrebi's "Prices, Profits and
Rhythms of Accumulation" (1997) is probably the most mathematically
complete and concise presentation I know. They derive a condition that
must be satisfied for all Marx's conservation claims to hold. The
usual suspects -- zero profits, uniform organic compositions of
capitals and production in `standard' proportions -- are those special
cases that satisfy the condition. The critique is, essentially, that
*there is no economic reason* why the condition should hold -- hence
the disconnect. (Again, I don't agree with this critique, but I
appreciate its logical force).


This archive was generated by hypermail 2.1.5 : Thu Feb 02 2006 - 00:00:02 EST