[OPE-L:7008] [OPE-L:500] Re: Kliman on Moseley

Fred B. Moseley (fmoseley@mtholyoke.edu)
Thu, 25 Feb 1999 00:42:12 -0500 (EST)

Hi Alejandro,

Thanks very much for your questions of clarification.

My very brief answer is that, no, by "prior determination" I do NOT mean
termporally prior. I mean logically prior. As in Vol. 1 (the
determination of aggregate magnitudes) is logically prior to Vol. 3 (the
determination of individual magnitudes). I have tried to clarify this
distincition several times before on OPEL.

You are right that my equation for prices of production (e.g. equation 10
in my 1993 article that you cite) has no time subscripts. This equation
is taken from p. 265 of Vol. 3 of the Penguin edition of Capital. There
we find Marx's own equation for prices of production, very clearly stated:

The formula that the price of production of a commodity
= k + p, cost price plus profit, can now be stated more
exactly; since p = kp' (where p' is the general rate of
profit), the PRICE OF PRODUCTION = K + KP'. If k = 300
and p' = 15 per cent, the price of production k + kp" =
300 + (300 x .15) = 345. (emphasis added)

Please note that there are not any time subscripts in Marx's equation,
either. Nor are there ANY time subscripts in ANY of Marx's many
discussions of prices of production.

Doesn't this make you wonder about the validty of the temporal
interpretation of Marx's theory of prices of production?


On Wed, 24 Feb 1999, Alejandro Ramos wrote:

> Date: Wed, 24 Feb 1999 15:17:45 -0600
> From: Alejandro Ramos <aramos@btl.net>
> Reply-To: ope-l@galaxy.csuchico.edu
> To: ope-l@galaxy.csuchico.edu
> Cc: multiple recipients of list <ope-l@galaxy.csuchico.edu>
> Subject: [OPE-L:497] Kliman on Moseley
> 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.
> Abrazos,
> Alejandro