From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Sat Sep 29 2007 - 09:43:59 EDT
Quoting glevy@PRATT.EDU: > Fred: > > You move between referring to a "long-run theory of equilibrium > prices" and "real-world equilibrium prices" as if they are the > same thing. In what sense, can the equilibrium prices that you > are referring to be said to be "real-world" prices? > > (Among many other issues), in the real world there are barriers > to the mobility of means of production and labor power. In the real > world it is doubtful whether there is some phenomenon which > corresponds to "prices of production". In the real world, there > are unequal exchanges. Etc. Etc. Hi Jerry, thanks for your comment. Sorry for my delay in responding. I agree (of course) that there are many barriers to capital and labor mobility, which inhibit the equalization of the rate of profit in the real world. But both Marx’s theory and Sraffa’s theory assume that there is at least a tendency toward equalization, and both theories attempt to explain what the long-run equilibrium prices would be if the equalization process were completed and not inhibited. So we have two different theories of long-run equilibrium prices. My question is: which one of these two theories more accurately describes how long-run equilibrium prices are determined in the real capitalist economy? Let me rephrase the question in terms of the rate of profit, a key component of long-run equilibrium prices: which one of these two theories more accurately describes how the rate of profit is determined in the real capitalist economy? The two theories are: 1. MARXIAN: the rate of profit that is equalized is the annual rate of profit, which is determined by the ratio of the total surplus-value produced in the economy as a whole during a year to the total capital invested in that year. 2. SRAFFIAN: the rate of profit that is equalized is the “week” rate of profit (or some similar unit short period), which is determined simultaneously with prices of production, including hypothetical prices of production of partially used machines and partially finished products which are not actually exchanged at the end of each week. Which of these two theories do you think more accurately describes how the rate of profit is determined in the real capitalist economy? You know my answer. Comradely, Fred ---------------------------------------------------------------- This message was sent using IMP, the Internet Messaging Program.
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