[OPE-L:6373] RE: Re: Historical, real and current costs

andrew kliman (Andrew_Kliman@CLASSIC.MSN.COM)
Sun, 29 Mar 98 14:26:41 UT

A reply to the PIAF:

From: owner-ope-l@galaxy.csuchico.edu on behalf of C. J. Arthur
Sent: Saturday, March 28, 1998 4:37 PM
To: ope-l@galaxy.csuchico.edu
Subject: RE: [OPE-L] Re: Historical, real and current costs

I'm glad that Chris and I seem to be in agreement on the methodological

Yet I do not understand this comment of yours, Chris:

"But one has to be very careful - for example in a multi-good economy in which
most products are 'dry' the price level rises between these two times when
equalisation of profit kicks in."

I gather that you're going back to the original problem of the wine fermenting
example. The price of wine is greater than the price of a good that requires
the same amount of labor, because, due to its longer production period,
interest accrues as a "cost" of the wine. Marx's solution to this paradox is
that surplus-value is redistributed from other branches to the wine branch, so
the fact that it sells above value means only that other goods sell below
value, but total price = total value.

This much I understand. But I do not understand the connection of this to the
change in the price level. Are you saying that, if we have two phenomena
occurring at once (a rise in the price level *and* redistribution of
surplus-value), it is necessary to separate them analytically in order to see
how each, individually, affects things? I agree with this, of course, and it
is another way of explaining the method of the one-good example: it is a
_ceteris paribus_ assumption, in that it allows us to examine the effect of a
change in the price level independent of redistribution of surplus-value.

But I'm not sure this is what you're saying. Could you please explain


Andrew Kliman