[OPE-L:2649] Re: surplus-value and relative prices

Allin Cottrell (cottrell@wfu.edu)
Sun, 14 Jul 1996 11:55:46 -0700 (PDT)

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On Sat, 13 Jul 1996, Fred M. wrote:

> This is a reply to Paul C's (2610) on whether Marx's theory of
> surplus-value is independent of a theory of relative prices.

> First of all, it is not clear to me how a labor theory of relative prices
> can explain why capitalists attempt lengthen the working-day or increase the
> productivity of labor. Does not this implicitly assume that individual
> capitalists are aware that surplus labor is the source of profit?
> Otherwise, a labor theory of relative prices and profit would not explain
> these actions of capitalists.

I don't think Fred's inference is warranted. What is required is that
individual capitalists learn -- somehow or other -- what sort of
actions on their part are likely to result in increased profits. If
Marx's theory (as interpreted by Paul, as a theory -- inter alia -- of
relative prices) is correct, then prominent among these actions will
be those which serve to lengthen the working day, at given wages, and
to increase the productivity of labour. If prices bear no relation to
labour-content then there is no particular reason to expect these sorts
of policies to be especially prominent.

> ... [T]he disagreement between Paul and me raises a very big and
> important methodological issue - whether Marx's theory is based on:
> (1) "methodolgical individualism," or, one could say, subjective
> individualism, in which conclusions are derived from the actions of
> individuals ( i.e. the logical method of neoclassical economics), or
> (2) "methodological holism,", or objective holism, in which conclusions are
> derived from the objective characteristics of the capitalist economy as a
> whole.

Personally, I don't think this is a very useful dichotomy in the
context of the present discussion. Paul is not espousing methodological
or subjective individualism. The point is although structural tendencies
are of great importance, a "structural tendency" that lacks any sort
of causal mechanism is an idealist abstraction; and in this context
the causal mechanism must involve the behavior of individual capitalists.
Their motivations and calculations must somehow be appropriate to the
realization of the tendency in question. (To this extent, I think
that Roemer, Elster et al are quite correct, though I certainly do not
subscribe to all of their positions.)

Allin Cottrell
Department of Economics
Wake Forest University