[OPE-L:917] Re: Price-Value Equivalence

Allin Cottrell (cottrell@wfu.edu)
Thu, 1 Feb 1996 14:16:24 -0800

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Some responses to a sample of the points recently made by Alan.

1. I had said that Marx's example of calculating the rate of exploitation
in cotton-spinning moved from money magnitudes to labour-time magnitudes
in a way that was legitimate only on the assumption of value-price
proportionality (and as Simon also pointed out, Marx explicitly says this
a couple of paragraphs later). Alan replies:

> The passage Allin refers to seems to me to establish exactly
> the opposite of what he sustains. The 'constant capital' of the
> spinner includes the following:
> "The rent of the building we suppose to be L300 per year"
> ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
> Now without wishing to stir up sleeping horses, I always understood
> rent to be an irrational price, that is, a price independent of
> the labour embodied in the product. Yet we find that Marx
> calmly and without batting an eyelid includes it in the constant
> capital of the spinner. Nor can we assume he simply means the
> depreciation of the building, since in the immediately preceding
> passage he refers to the depreciation on the machinery, making it
> clear that the rent is a distinct category.

A red herring, IMO. Rent is a distinct juridical category since in the
concrete case considered by Marx the machines are owned by the capitalist
in question (so he's responsible for depreciation), but the factory
building is owned by somebody else. Whether the L300 "rent" represents
pure depreciation on the building or includes ground rent is moot.
Besides, Marx tells us he's not paying much attention to this part of the
calculation: "We put the constant part of the value of the product to
zero, as it plays no part in the creation of value".

2. Alan says (and I'll take him at his word that this is "critical"):

> The critical point is that Marx does not at any point, as far
> as I can see, impose price-value equivalence as the basis of
> his definition of value...

How on earth could he do so? This is a straw man. If one is to talk of
the equivalence of prices and values in any substantive way, value must be
_defined_ independently of price; and of course we find this -- value is
defined in terms of socially necessary labour-time. Equivalence is
clearly not "the basis of his definition of value"; it is a relationship
posited as a representation of commodity exchange in its "pure" form, or
"on average". (And it also happens, though Marx was not in a position to
calculate this himself, to have a high degree of empirical validity.)

3. On "averages" and all that...

> The problem with the idea that value is merely an average,
> attractive and fruitful though it is, is that one is immediately
> driven to ask: an average of what? Unless, Nils-Bohr-style, you
> take the view that *only* the average has meaning, so that we
> are not entitled to enquire into an individual exchange, I do
> not see how you can avoid this question. Particularly since
> Marx asks it.

Boltzmann, not Niels Bohr, is the relevant figure from physics.
It's not that "only the average has meaning", but that only the average
(well, actually, not just the first moment, but in general the moments of
the statistical distribution) is susceptible of fruitful theorization.

> So, I think the citations given by Allin allow us further to
> illustrate the precise role played by the *temporary and
> contingent* assumption of value-price equivalence in *certain
> limited deductions* of Marx, a role which it could not play
> unless it was a *special case* of exchange at any arbitrary
> prices, for which purpose Marx uses a category of value
> *derived from* exchange at any arbitrary prices.

Not a special case of exchange at arbitrary prices, but the statistical
law operating amidst the manifold exchanges of commodities at random
prices, like the statistical laws operating amidst the random collisions
of the molecules in a gas. (Of course I'm not saying that Marx conceived
things in precisely this way, as he did not have the conceptual equipment
to do so.)

Allin Cottrell
Department of Economics
Wake Forest University