Dominique LEVY -CEPREMAP (levy@msh-paris.fr)
Tue, 20 Feb 1996 11:01:41 -0800

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First a message for Jerry Levy: Thank for ringing the bell. It is
difficult not to enter the discussion; but there would be so much to

My points below are related to Simon Mohun's, Ducan Foley's and Fred
Moseley's messages. I begin with two quotations from Duncan: (1) "On
this ground it makes most sense to view Volume I of Capital as an
attempt to work out the consequences of the labor theory of value to
the level of the aggregate commodity." (2) "For essentially
pedagogical reasons Marx often works through examples on the
assumption that prices are proportional to embodied labor times, but I
don't read the text as limiting the conclusions to that assumption."
(I will also refer to the discussion concerning "neoclassical

(1) This statement is too general. I guess Duncan will agree with
that. Volume I of Capital begins with the analysis of commodity,
exchange, and money, and then turns to capital (its valorization and
accumulation). The "attempt to work out the consequences of the labor
theory of value to the level of the aggregate commodity" refers to the
analysis of capital. The problem can be stated as follows: beginning
with the theory of value established in the first part of the Volume,
how can we account for surplus-value? In this analysis, the point of
view is that of aggregates. In the chapter on exchange (chapter 2),
Marx obviously deals with individual commodities.

(2) It is one of the fundamental statements of the "new
interpretation" of the so-called transformation problem, that the
basic relationships Marx wanted to established are not subject to the
assumption that commodities are exchanged at their value or at PRICES
OF PRODUCTION. The historical controversy concerning aggregates
values and surplus-value had no reason to refer to equalized profit
rates (except the fact that Marx was dealing with several issues
simultaneously). The same concept of value and the same analysis of
surplus-value apply to an economy in which profit rates are not
equalized, and this for any reason (competition, everyday
gravitation...). The relevance of Marx's analysis of exploitation in
a capitalist economy does not rest on any assumption on a specific set
of prices. Two further points:

- Marx generally assumes that commodity exchange at their values.
This is the case in Volume I and Volume II (for example in the
analysis of reproduction schemes), but also in volume III (for example
in some of his developments related to the falling profit rate,
although not in all). I agree with Duncan: this is a simplifying

- The fact that prices prevailing on the asymptotical trajectory of a
general intertemporal equilibrium model are (under certain
assumptions) prices of production is interesting to debate with people
who, like Franck Hahn, look down to prices of production as a
particular case of the neoclassical model. However, it is totally
irrelevant to the discussion of the law of value and theory of