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

From: Andrew Brown (A.Brown@LUBS.LEEDS.AC.UK)
Date: Tue Jan 31 2006 - 13:42:47 EST

I do not follow the specifics of your argument. It has value (labour-time) and price categories all meshed together confusingly to my eye. Whatever the specifics your argument, it clearly turns on dynamic considerations not evident in the static TP (potentially reinforcing my point about abstraction and causation). Where are cycles, crises, bubbles in fixed and financial capital, boom, bust etc. in your account? 

	-----Original Message----- 
	From: OPE-L on behalf of Paul Cockshott 
	Sent: Tue 31/01/2006 09:51 
	Subject: Re: [OPE-L] price of production/supply price/value

	Andrew Brown wrote:
	>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.
	I think this understates the power of value constraints. They operate
	all the time and are considerably stronger than profit equalising
	A firm whose selling price does not cover the direct and indirect wage
	has a short life expectancy, whereas a firm can go on indefinitely
	with a rate of profit below the economy average, provided that its gearing
	ratio is low.
	Assuming price/direct costs are normally distributed, the first criterion
	means that the standard deviation of this distribution must be small.
	Suppose the rate of surplus value is 50%, then we would expect that
	coefficient of variation of the price / value ratio would have to be less
	than 0.25, because otherwise more than 5% of firms would not even
	be meeting their direct and indirect wage costs ( and hence since the
	indirect wage costs are always less than C, would be running at
	a large loss ).
	It is hard to see that the constraints on the coefficient of variation of
	the rate of profit are anything like as tight. Provided that the rate of
	profit was still positive, a firm could continue operating with a profit
	rate 2 SDs away from the mean.
	Paul Cockshott
	Dept Computing Science
	University of Glasgow
	0141 330 3125

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