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

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Wed Apr 11 2007 - 06:04:46 EDT

Hi Fred,

you called our attention to this passage--I think the strongest
textual evidence you have in favor of your idea of long term
equilibrium price (quoted at the bottom).

You write about this passage:

>There is one passage from Chapter 50 of Volume 3, in which Marx
>comments on the fluctuations of market prices around prices of
>production as long-run center-of-gravity prices, and this passage seems
>to suggest that Marx thought that changes in values certainly do not
>happen continuously, and probably do not happen frequently.
>Therefore, in order to conduct this kind of empirical analysis of the
>fluctuations of market prices, there must be some industries in which
>the actual value of a commodity DOES NOT ALTER "over a prolonged
>period".  Futhermore, the implication seems to be that such alterations
>of value would happen in only a few industries over this "prolonged


Well first this passage is not actually about the infrequency of
changes in unit values.  The constancy in prices of production for
any branch of production is compatible with changing unit values in
the respective branches. As long as productivity growth is fairly
proportional across branches, their prices of production may remain
fairly stable in both absolute and relative  terms, and the periods
of excessive market prices for any one branch may well be balanced by
periods of weak market prices, such that over time the respective
branches will all have made an average rate of profit.

In using this passage as proof of the constancy of unit values, you
are ignoring your point that prices of production should not be
conflated with unit prices and values!

Secondly unit values are not affected only by or even mainly by
changes in labor productivity to which Marx refers in the passage
below but by changes in the unit values of the means of production.
But Marx focuses on only one reason for a change in unit values in
the passage below--change in direct labor productivity. Why?

Well, it is quite possible that changes in the absolute and relative
level of prices of production for any one branch would change if
there were explosive growth in direct labor productivity. In other
words, if a branch were all of a sudden to leap from a low OCC to
high OCC, then one would see the sum of the market prices of that
branch's produced commodities changing both absolutely and as a
relative portion of total prices. Market prices would not be seen to
be hovering around stable prices of production in that case.

But it does not follow that Marx thinks unit values are constant in
all the other branches as the unit values of the goods which are
consumed as means of production will have tendentially continued to
decline, bringing about a constant reduction in unit values. The
prices of production--which are defined at the branch level--can
remain stable with market prices hovering around them while unit
values and use values continue to move in inverse direction.

As far as I can see this is the only passage from volume 3 that
either you or Allin has quoted to demonstrate that Marx believed that
unit values were even roughly constant over time.

And I don't see how it does that. Moreover, the assumption of
constant unit values is not realistic and makes changes seem as if
they appear by magic, sleight of hand or through a deus ex machina.

Here is the passage which you cited:

"If we call the surplus-value thus limited and calculated on the
advanced total capital - the profit, as I have done, then this
profit, so far as its absolute magnitude is concerned, is equal to
the surplus-value and, therefore, its limits are just as much
determined by law as the latter. On the other hand, the level of the
rate of profit is likewise a magnitude held within certain specific
limits determined by the value of commodities. It is the ratio of the
total surplus-value to the total social capital advanced in
production. If this capital=500 (say millions) and the
surplus-value=100, then 20% constitutes the absolute limit of the
rate of profit. The distribution of the social profit according to
this rate among the capitals invested in the various spheres of
production creates prices of production which deviate from the values
of commodities and which are the real regulating average
market-prices. But this deviation abolishes neither the determination
of prices by values nor the regular limits of profit. Instead of the
value of a commodity being equal to the capital consumed in its
production plus the surplus-value contained in it, its price of
production is now equal to the capital, c, consumed in its production
plus the surplus-value falling to its share as a result of the
general rate of profit, for instance 20% on the capital advanced in
its production, counting both the consumed and the merely employed
capital. But this additional amount of 20% is itself determined by
the surplus-value created by the total social capital and its
relation to the value of this capital; and for this reason it is 20%
and not 10 or 100. The transformation of values into prices of
production, then, does not remove the limits on profit, but merely
alters its distribution among the various particular capitals which
make up the social capital, i.e., it distributes it uniformly among
them in the proportion in which they form parts of the value of this
total capital. The market-prices rise above and fall below these
regulating prices of production, but these fluctuations mutually
balance each other. If one examines price lists over a more or less
long period of time, and if one disregards those cases in which the
actual value of commodities is altered by a change in the
productivity of labour, and likewise those cases in which the process
of production has been disturbed by natural or social accidents, one
will be surprised, in the first place, by the relatively narrow
limits of the deviations, and, secondly, by the regularity of their
mutual compensation. "

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