Re: [OPE] [1] Marxian equilibrium & reply to Wright.

From: Dave Zachariah (
Date: Sun Feb 10 2008 - 14:20:55 EST

Hi Alejandro,

I think there is a misunderstanding here. When I said that "prices tend 
to be proportional to labour values" I was using a simplified language. 
"Tend" refers here to "tendency". In a more precise language I meant the 

    The variance of the distribution of price-to-labour value ratios of
    all transactions during a fixed period in an economy is bounded and
    sufficiently low that there is a strong correlation between market
    price and labour value.

It does *not* mean in any way that price *is* proportional to labour 
value. Now if this statistical law holds over time -- and there is 
empirical evidence for this -- then one can claim that labour value is 
an attractor to market price, or what the classical economists would 
call a "center of gravity".

During a given period a single commodity-type has a fixed or slowly 
varying labour value but a multitude of market prices varying for 
different transactions all over the economy in time and space. Therefore 
it would be nonsensical to say that "labour values spin around market 

In sum, the theory gives a mechanism for the redistribution of social 
labour precisely because market prices deviate from the "equilbrium 
prices" determined by labour values. It gives an explanation to Adam 
Smith's "invisible hand".

I believe you are wrong to say that mechanisms need an overall goal or 
purpose. The theory evolution is the perfect example of this. Given (a) 
the immediate and local need for firms to meet their wage-bills in (b) 
an integrated economy, the law of value emerges as a statistical 
phenomenon with no goal or purpose.

//Dave Z

on 2008-02-10 19:07 Alejandro Agafonow wrote:
> Dear Dave:
> Market doesn’t lack criteria to redirect labour toward the production 
> of useful effects. Such criteria are lacking in Marxist theory of the 
> market.
> It is not true that (1) market prices tend to be proportional to their 
> values. The truth is just the contrary, that is, (2) that values tend 
> imperfectly to be proportional to market prices. Values spin around 
> market prices.
> Due to the fact that -as I argued when answering Ian Wright- labour 
> time has not any link with the utility a commodity provides to 
> consumers, if you accept the premise (1) you don’t have any mechanism 
> to determine the social character of production, unless you trust in  
> a planner to determine that character (Cockshott & Cottrell didn't 
> even propose this). This was until short time the option chosen by 
> Marxists, and /The ABC of Communism/ of Nicolai Bukharin and Evgeni 
> Preobrazhenski expressed the usual way to follow:
> «[…] it must be free from anarchy of production, from competition 
> between individual entrepreneurs, from wars and crises. […] If all the 
> factories and workshops together with the whole of agricultural 
> production are combined to form an immense cooperative enterprise, it 
> is obvious that everything must be precisely calculated. We must know 
> in advance how much labour to assign to the various branches of 
> industry; what products are required and how much of each it is 
> necessary to produce; how and where machines must be provided. These 
> and similar details must be thought out beforehand, with approximate 
> accuracy at least; […] Without a general plan, without a general 
> directive system, and without careful calculation and book-keeping, 
> there can be no organization. But in the communist social order, there 
> is such a plan.» (Bukharin y Preobrazhenski, 1920: Chapter III, 
> Marxist Internet Archive)
> A mechanism -either the temperature setting or the market- must have a 
> goal or purpose, a software that tells to it toward which way turn the 
> system. What is the reason? That, on the contrary, the mechanism 
> itself wouldn’t have any raison d’être. An economy must serve to human 
> necessities. If serves to natural laws of physics, cost of production 
> or metaphysical laws of Greek gods, it wouldn’t have any sense for 
> humans –unless we worship Greek gods.
> Sincerely,
> Alejandro Agafonow

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