[OPE-L:7005] [OPE-L:497] Kliman on Moseley

Alejandro Ramos (aramos@btl.net)
Wed, 24 Feb 1999 15:17:45 -0600

Dear Fred:

I was guessing that your reply to this question would be in line with a
passage of Moseley [1993], p. 174: "the general rate of profit obviously
does not change in Marx's determination of prices of production, since it
is taken as given in the analysis and not determined simultaneously along
with the prices of production, as in the neo-Ricardian interpretation."

So, in your OPE-L 496, you write:

>My very brief answer to your question is, no, I do not consider myself a
>"simultaneist". I have emphasized that, in Marx's theory of prices of
>production, the rate of profit is NOT determined simultaneously with
>prices of production. Instead the rate of profit is determined PRIOR to
>prices of production. The rate of profit is determined by the prior macro
>analysis of capital in general (or the total social capital) and is then
>taken as a given, predetermined magnitude in the subsequent micro analysis
>of competition, and of prices of production in particular.
>I think Andrew calls me a "simultaneist" because I also argue (with much
>textual evidence presented to OPEL) that, in Marx's theory of prices of
>production, constant capital is valued at current reproduction costs
>(where "current" means, as usually interpreted, at the time of sale of the
>output); in other words, that input prices are assumed to equal output
>prices. But I insist that that does not make me a "simultaneist", at
>least in the usual sense of the term to mean simultaneous determination of
>the rate of profit.

The problem is that, perhaps, your reasoning is difficult to follow, at
least for me. On the one hand, you maintain that the rate of profit is
determined "prior" to the prices of production. In my understanding (and
probably in Andrew's) this would imply that there is a *temporal* priority
in the determination of the profit rate, i.e. it would be a "given
magnitude" when production prices are effectively calculated.

Yet, on the other hand, you *also* maintain that the advanced constant
capital is determined at the end of the cycle (the "time of the sale of
output"). But, as the advanced constant capital *is an element of the
profit rate*, it seems that that rate can be only completely determined *at
the end of the cycle*.

So, one really doesn's know what you mean, in terms of the effective
calculation of those magnitudes, when you say that the profit rate is
determined PRIOR to production prices. In fact, following your reasoning,
one needs to determine the profit rate *along with the prices of
production* arising at the *end* of the cycle.

Additionally, your set of equations in that article are not explicitly time
determined. For example, in your equation [10], the R has no time index
indicating that it is in some way PRIOR to prices of production (there is
no a R[t-1]) and, in this sense, your verbal discussion concerning this
issue has no specific math implications. At least, I can't see them. Then,
when one tries to construct a numerical example following your equations it
is not possible to distinguish the result from that obtained through a
plain simultaneous system as in Roberts [1981], and in my early articles on
this matter.

Maybe this is a good occasion to advance in the clarification of this
interesting matter.