[OPE-L:7491] [OPE-L:1028] Re: Re: Marx's Concept of Prices of Production

Fred B. Moseley (fmoseley@mtholyoke.edu)
Thu, 3 Jun 1999 17:53:58 -0400 (EDT)

This is a response to John's OPEL #1008 in our continuing discussion.
Thanks again to John for his comments.

John agrees with me that Marx's prices of production change if and only if
productivity or the real wage changes. I have argued that Andrew and
Ted's prices of production are a misinterpretation of Marx's concept
because their prices of production change every period, even though
productivity and the real wage remain constant.

John now argues that the changes in Andrew and Ted's prices of production
are actually the result of changes in productivity THAT HAS OCCURRED IN
PAST PERIODS, before period 1 in Andrew and Ted's examples. According to
John, this prior productivity change sets in motion a SEQUENCE OF CHANGES
of prices of production that continues in subsequent periods, even though
productivity remains constant in these subsequent periods.

> I am clear that in periods they describe there is no technical change.
> I am simply saying that technical change is already assumed at the
> start since input and output prices differ. They assume no further
> technical change as they move from period to period. But it seems
> to me that the changes in prices of production that occur from
> period to period can be traced back to that initial starting
> point -- one which assumes albeit implicitly that technical change
> has already taken place.

I know of no passage in all of Marx's writings on his concept of price of
production (which I reviewed in my Boston paper) in which there is any
hint or suggestion that a given change in productivity will result in a
SEQUENCE of changes in prices of production that will continue for many
periods into the future. Rather for Marx, there is a one-to-one
relationship between productivity and prices of production. A given level
of productivity determines a unique price of production (or if considering
all commodities together, a unique set of prices of production). A change
of productivity in a given industry, or in industries that produce its
means of production, will determine a new unique price of production for
that industry, not a sequence of many different prices of production in
subsequent periods. After a change of productivity and the resulting
change in the price of production, prices of production will remain
constant unless there is a new change of productivity. In order for
prices of production to change again, and continue to change, productivity
itself must continue to change. And this doesn't happen in Andrew and
Ted's examples.

In the passages in which Marx discussed this issue, he always said that a
change of productivity results in "a new" price of production". In one
place, Marx referred to the new price of production as the "permanent
price" (TSV. II. 213), to distinguish it from the temporary fluctuations
of market prices. But nothing is said about further changes in prices of
production in subsequent periods from a single change of productivity.

John, if you know of any passages that support your interpretation of a
given change of productivity resulting in a continuing sequence of changes
in prices of production, please let me know. Otherwise, I think it has to
be concluded that this is not what Marx meant.

Andrew and Ted's articles do not say anything about a prior change of
productivity as the cause of changes in their prices of production from
period to period. Their numerical examples are in terms of fixed
quantities of inputs and output in all periods. In the initial period,
their input prices are assumed to be equal to the values of the means of
production and real wages. (This is the way they explain the
transformation of values into prices of production.) Due to the
equalization of profit rates, the output prices of the first period
(the "prices of production") will not be equal to the input prices
(values) of the first period. This has nothing to do with prior changes
in productivity, but is simply the result of the transformation of values
into prices of production, assuming a given level of productivity.
The output prices of the first period then become the input prices of the
second period. Further equalization of profit rates in the second period
then require that the output prices (the "prices of production") to
change again. And similar changes in "prices of production" continue to
occur in subsequent periods, even though productivity remains constant.
None of this depends in any way on a change of productivity prior to
period 1. And there is nothing like this in Marx's texts.

I look forward to further discussion. I will try to return to some of the
other (very interesting) threads in this discussion as time permits.