[OPE-L:7479] [OPE-L:1016] Re: Re: Re: Re: Re: Marx's concept of prices of

Paul Cockshott (clyder@gn.apc.org)
Wed, 2 Jun 1999 09:38:27 +0100

-----Original Message-----
From: Tsoulfidis Lefteris <lefteris@uom.gr>
To: ope-l@galaxy.csuchico.edu <ope-l@galaxy.csuchico.edu>
Date: Tuesday, June 01, 1999 2:28 PM
Subject: [OPE-L:1011] Re: Re: Re: Re: Marx's concept of prices of production

>Paul Cockshott wrote:
>> > as a long-run tendency, not as an actual fact in every period
>> Fred what is your attitude as to whether or not this assumption is
>> empirically valid.
>> Allin and I have presented evidence that in the US and the UK there is
>> a systematic negative correlation between sectoral organic compositions
>> of capital and rates of profit. This is directly counter to the key
>> assumption above.
>There are many issues involved at the same time. I will try to address
>them simultaneously and this might be confusing.
>I start with the issue of equalization.
>If one tries to test empirically Marx's proposition of the tendential
>equalization of the interindustry profit rates (in a period of fat and
>lean years) by just examining the long run tendencies of interindustry
>_average_ rates of profit it is likely to find convergence of
>interindustry profit rates around the general rate of profit. This
>appears to contradict the tendential equalization of profit rates
>The trouble, however, with these studies is that they do not really test
>Marx's idea. In Marx the equalization of profit rates takes place only
>for the regulating capitals (see also Botwinick 1993), which in general
>differ from the average. An example could be in agriculture where the
>regulating capital is the marginal capital which of course differs
>substantially from the average.
>The operationalization of the concept of regulating capital and the
>associated with it profit rate is discussed in (Shaikh: The Stock Market
>and the Corporate Sector, 1995) but also in Christodoulopoulos
>(dissertation 1996) where it is found that there is equalization of
>profit rates for the regulating capitals for several industries
>internationally. In a book published recently in Greek (Issues in
>Political Economy: The Case of Greece. co-authored by Maniatis, Tsaliki
>and Tsoulfidis. It is shown that there is interindustry equalization of
>profit rates for the regulating capitals and not necessarily for the
>average capitals.

I find this an interesting contribution, Shaik mentioned something
similar to this to me at the last Boston conference. It seems plausible.
I would need to know more about what they mean by the regulating
capital - is it the marginal new capital investment?
I would also be interested in the empirical backup for this.

However, if their hypothesis is true, it does not contradict the
empirical finding of a negative correlation between sectoral organic
compositions of capital and profit rates. It is the latter, relating
to sectoral averages, rather than the former - relating to marginal
capital movements, that is relevant for assesing the theory of
prices of production. If only marginal rates of profit are equalised
whilst average rates systematically diverge from this, then
market prices will systematically diverge from prices of production
and the price of production hypothesis thus fails as a scientific

If that is the case, then continued arguements within the framework
of this theory are a waste of time. Instead of endlessly cycling
round variants of it, we need to formulate some testable hypotheses
about why simple labour values seem, in practice, to act as the
regulators of market prices.

Have any of the workers you mention formulated such hypotheses?