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

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sat Mar 31 2007 - 18:51:17 EDT

Fred wrote:

"Furthermore, Marx emphasis in these pages is that prices of production
change IF AND ONLY IF the values of commodities change, either in final
goods industries, or in industries that produce means of production. You
seem to have in mind a situation in which prices of production change from
period to period, because input prices are not equal to output prices,
even though the values of commodities remain the same."

Well when does value change if not between the production and realization
of the inputs and the production and realization of the outputs? This is
question Guisanni  has put forth. I put it to Allin. What is the answer?

Fred, just to be absolutely clear: Marx does have prices of production
changing interperiodically because value is indeed changing
interperiodically. Marx shared that assumption with Ricardo. There are
continuous output and price responses to the disequilibrium effects on the
profit rate from the ceaseless and differential productivity growth in the
economy's branches. Some of the responses may even compound the
disequilibrium (Paul C gave an interesting example of how responses to
disequilibrium can compound disequilibrium, the most important example
being of course that oversupply tends to encourage even more supply
through large scale technologically advanced investments--think of how
oversupply is handled in the DRAM market). But the point is that there is
no reason to assume that what would have been the prices of production for
the inputs are the same as the prices of production Marx calculates in his
tables. For this reason it would not have occured to him that he should
have transformed his input prices into the same prices of production as
the outputs.

There is of course other reasons he would have rejected Bortkieweicz's
solution. Marx did not think simple reproduction was compatible with
capitalism, so he would not had prices determined under such conditions.
Foley on the other hand thinks Marx was trying to establish the conditions
of simple reproduction in terms of interdepartmental exchange and the size
of the gold reserves needed. But Marx showed that simple reproduction was
not possible under capitalism, so what is the point of a theory of price
in those conditions? Of course Winternitz showed that simple reproduction
did not have to be assumed, but he also rightly thought that there was no
transformation problem.

Second, Marx would not have accepted gold as a third sector whose exchange
value allowed for no more than average rate of profit.


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