[OPE-L:927] price-value equivalence

Costas Lapavitsas (CL5@soas.ac.uk)
Fri, 2 Feb 1996 09:38:51 -0800

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Reference: the debate between Alan, Simon, and Allin on price-
value equivalence in Vol I.

Two points:

1. Quite apart from the problem of the exegesis of the texts (despite
Alan's ingenious interpretations, there is sufficient
evidence that Marx used the assumption of equivalence in Vol I),
there is also the problem of the structure of analysis. For Smith,
market price diverges from natural price due to demand and supply
fluctuations. Moreover, in a capitalist economy, goods cannot exchange
at ratios determined by value because capital and land have to earn
profit and rent. For Ricardo, price diverges from value because
different capitals earn the same rate of profit; capitals have
different turnover times; fixed capitals have different
durability. For both, relative prices necessarily diverge from value
ratios because of the existence of capitalist competition.

This point is fundamental for Vol I (and Vol II). Since Marx operates
at the level of 'capital-in-general', ie he ignores competition among
many capitals, of necessity he also operates with the assumption that
relative prices are proportionate to values. But he knows
perfectly well the limited nature of this assumption.

2. This point might also have a bearing on the 'pure' - 'average'
distinction. Let us assume that for the total social capital, in
conditions of capitalist competition, the existence of the average
rate of profit does not affect the equivalence of the price and
the value of total output. This is, perhaps, a kind of 'pure'
form. What condition should hold for the market price of total
output? Can that be an 'average'? And if this is the case, does it
not also follow that total price and total value need not be equal
even if we resolve the transformation problem?

Costas Lapavitsas