[OPE-L] The Antichrist

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Sun Apr 29 2007 - 09:05:34 EDT

Thank you Fred for your clarifying paper. However, may I ask what you make
of the following quote from Marx Cap. 3 ch. 21:

"If supply and demand coincide, the MARKET PRICE of the commodity
CORRESPONDS to its PRICE OF PRODUCTION, i.e. its price is then governed by
the inner laws of capitalist production, independent of competition, since
fluctuations in supply and demand explain nothing but divergences between
market prices and prices of production - divergences which are mutually
ARE EQUAL TO THE PRICES OF PRODUCTION. As soon as they coincide, these
forces cease to have any effect, they cancel each other out, and the general
law of price determination then emerges as the law of the individual cases
as well; market price then corresponds to price of production in its
immediate existence and not only as an average of all price movements, and
the price of production, for its part, is governed by the immanent laws of
the mode of production. Similarly with wages. If supply and demand coincide,
their effect ceases, and wages are equal to the value of labour-power."
(Pelican edition, p. 477-478).

The reason why Marx says all this is, because he wants to contrast the
regulation of commodity prices by "natural" prices with the regulation of
the cost of loan capital, i.e. he argues there is no "natural" (or
equilibrium) rate of interest, only a rate of interest that results from

Marx says here that market prices deviate from production prices only
because of supply/demand imbalances, but when supply and demand adjust to
each other over time, then at least the *average market prices* would be
empirically *equal* to the production prices.

It would of course be a mistake to interpret simply that production prices
ARE actual market prices, or to assume that production prices are
necessarily empirical prices rather than theoretical (ideal) prices. Indeed
Marx implies the developmental trajectory of capitalist production is
governed precisely by the divergences between product-values, production
prices of products and market prices of products; these divergences set the
parameters of competition in costs, sales and profits.

However Marx does appear to say here that if there are no fluctuations in
supply and demand anymore (a stabilized market), average market price and
production price for a type of good will be empirically identical. If there
exists no observational evidence for production prices of any kind
whatsoever at any time, then it is in principle impossible to give any proof
that market prices are regulated by production prices, or that market prices
will gravitate long-term towards production prices.

Take for example the bread market. It's a fairly stable market annually
worth between about 16 and 23 billion dollars in the US, or about 3 billion
pounds in the UK, growing at around 2% annually. It is possible to obtain
very detailed information about the units of bread produced, prices, capital
and labour costs. So it should be possible to estimate the cost prices and
profits for different types of bread from the data as well as labour costs,
and thus estimate empirically the production prices, product values and
average market prices.


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