From: Jurriaan Bendien <jurriaanbendien@online.nl>

Date: Mon Feb 07 2011 - 18:20:30 EST

Date: Mon Feb 07 2011 - 18:20:30 EST

Just for the sake of clarification, I am not a Marxist myself; I reject all

eponymous theories, doctrines and ideologies. Probably "historical

materialism", a term used by Engels since 1892, is a better label, although

Marx never used that term himself.

Some neo-Ricardians conceptualise the equilibrium production price as the

price of an output or commodity which it would have, if (1) supply and

demand were equal, and if (2) the product-price level meant that the average

rate of profit on production capital is reached. But this price is a purely

theoretical price level, and one of the two conditions might exist, but not

the other.

The argument then is, that the theoretical price level is an "attractor" for

the observed distribution of prices, so that a homoskedastic distribution

obtains along the curve of the theoretical price.

The trouble though is that the theoretical price level does not exist in

reality, so how then can it be an "attractor" at all? What causal force can

it have?

The reply to that is that if we compute a production price in said manner,

then we can prove that this price can predict the observable price

distribution, since the majority of observations will be close to the

computed price-level; the probability that such a result would be due to

chance is very small.

But the next question is - even if we succeed in this exercise, which is

technically rather problematic to realize - why is the computed production

price-level able to predict the actual price distribution?

Jurriaan

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Received on Mon Feb 7 18:23:31 2011

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