Re: [OPE-L] questions on the interpretation of labour values

From: Diego Guerrero (diego.guerrero@CPS.UCM.ES)
Date: Wed Feb 28 2007 - 04:00:51 EST

Hi, Fred,

You have now understood my "m". It is as you say and I think "actual
long-run center of gravity prices" would be a good name for them. I have to
check later your quotation of Marx, but I think this is my point. Thanks for
calling my attention towards the Marx's "real production price". When Duncan
Foley read my paper he first raised the same objection as you concerning the
meaning of my "market prices". Then I replied him the following:

<<In note xxiv of my paper I wrote: "Note that the m have to be understood
in the statistical sense, i.e. as average magnitudes in time and space,
because it is possible for any commodity that every actual day-to-day
transactions is made at prices that all differ from the average m. The fact
that p prices are averages of the m in another sense should not veil the
understanding that in practice the m that can be known as data at the macro
level are averages of the actual m. Of course, the same can be said of all
categories in my table, which means that in it are represented their annual
(or other periods of time) averages, not their day-to-day magnitudes.">>

And after this he wrote me:

<<It seems that you are interposing another level of abstraction here, which
is the centers of gravity around which actually measured market prices in a
concrete economic situation gravitate. From the point of view of the SSLTV
(the "new interpretation", which Gerard Dumenil and I would like to get
people to call the "single-system labor theory of value") this is perfectly
legitimate, since there is not special significance to prices of production
at this level.>>

Therefore, it seems like if it were a question of names and of levels of
abstraction. Therefore what I am reclaiming makes sense to me: we have to
change from the usual approach in just two levels (values and prices of
production) to a more complete approach in 3 levels:

1) in the first level we make m = w;

2) in the second, m = p;

3) finally, m = what Marx calls "real price of production", that is
different from w and p.

What do you think?



----- Original Message -----
From: "Pen-L Fred Moseley" <fmoseley@MTHOLYOKE.EDU>
Sent: Wednesday, February 28, 2007 4:54 AM
Subject: Re: [OPE-L] questions on the interpretation of labour values

Quoting Diego Guerrero <diego.guerrero@CPS.UCM.ES>:

> Fred:
> I would say Marx mentioned market prices a few times in Capital, mostly
> to deemphasize their importance, compared to prices of production,
> which are long-run equilibrium prices.
> ________________________________________
> Diego:
> Marx often uses the same terms for different concepts. It is true that he
> uses "market price" as you say in most cases. But when I say "market price
> (m)" I am thinking in long-term prices too, and I believe that Marx
> sometimes does the same. The 'm' include the prices of the commodities of
> the sectors where many reasons make their actual rates of profit
> differ-year
> after year and in average terms!!-from the uniform rate of profit included
> in their production prices.
> 1) Think of the influence of the ground-rent. When analysing the absolute
> rent Marx writes that "it is possible for agricultural products to be sold
> above their price of production and below their value, while, on the other
> hand, many industrial products yield the price of production only because
> they are sold above their value". He is clearly thinking of a long-term
> price, I believe, not in short-tem fluctuations.
> 2) Think of taxes. Many sectors use gasoline as an input: the price of the
> gasoline is persistently over its production price, not due to short-term
> fluctuations of any kind, but due to the tax system of almost all actual
> societies where the State is present. In the other pole you have a lot of
> agricultural products that systematically receive subsidies from the State
> that lower their market prices compared with their production prices .
> 3) And think of the following as a general reflection: "if there are
> taxes,
> payments to unproductive labor, rents, or interest payments, the tendency
> may be to equalize net profits after deducting these items" (Foley, 1982,
> p.
> 46). It is clear that it is a "tendency", not a short-term fluctuation,
> and
> also that the resulting prices, that include gross profits, not just net
> profits, would be different from production prices in all those cases.
> However, I think now that I should perhaps call my 'm' prices "actual
> prices" instead of "market prices" even if the ambiguity could remain in
> this case too. I was aware of this problem and I mentioned it in a
> footnote
> of my paper. W hat do you think?

Hi Diego, this is very interesting.

By "market prices", I have been thinking you meant short-run prices
that fluctuate around long-run center of gravity prices, because (as
you say) that is what Marx usually meant by "market prices".

However, now you seem to suggest that by "market prices" you mean
long-run center of gravity prices at a lower level of abstraction than
Part 2 of Volume 3 (taking into account unproductive labor, taxes,
etc.) (and perhaps even with unequal rates of profit).

If you indeed mean long-run center of gravity prices at a lower level
of abstraction, then I will have to think about that some more.  I
think you may be right about that, and then we really would have a

So would you please clarify?  Which of these two meanings of "market
prices" do you mean?

If you mean the latter (long-run center of gravity prices at a lower
level of abstraction), then I don't think "actual" is a good
descriptive term.  Unless it were "actual long-run center of gravity
prices", as opposed to hypothetical long-run center of gravity prices
at a higher level of abstraction. In Part 4 of Volume 3, Marx referred
to prices of production as modified by commercial capital and
commercial profit as "real prices of production".  (p. 399)


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