[OPE-L:7503] [OPE-L:1040] Re: Marx's Concept of Prices of Production

John Ernst (ernst@PIPELINE.COM)
Mon, 21 Jun 1999 17:50:44

Re: Fred's OPE-L 1039

Hi Fred,

In responding to your post I found that I was repeating myself
as I went through it point by point. As I looked at your last
point, I thought I might be able to cover a great deal of
ground by focusing my comments on it. Following that, I briefly
comment upon other issues.

You wrote:

7. Finally, and most importantly, John's introduction of this prior
change of productivity confuses two distinct questions and contradicts
Marx's logical method. The two separate questions are:

(1) how are prices of production determined?

(2) what causes changes in prices of production, or what are the effects
of changes of productivity or real wages on prices of production.

My comment: I'd point to you as the source of this confusion. Why?
First, let's consider Ted and Andrew's effort period by period. In
each and every period they determine a set of prices of production.
To be sure, the input prices they depict are often equal to the
output prices of the previous period. But again, let us set that
aside and examine their effort one period at a time. I have a feeling
you would not disagree with them if that's all we focus upon. They
start with a given set of prices and show how with the reallocation
of surplus value a set of (new) prices of production are computed.
For any period, that's all they do. In each and every period, their
work resembles that of Marx's tables in Chapter 9. Hence, viewed
in this fashion, Ted and Andrew follow Marx as we answer your (1)

Second, again if we focus on any one of the periods in their work,
can we not say that the prices of production of that given period
would be different if productivity or the wage changed? I think so.

How then do you proceed with your criticism of their effort? You
take Marx's statements which apply to *one* period of production
in which he shows how by changing, say, the wage in a particular
period prices of production will change must apply to all periods
of production. In other words. in his examples Marx is comparing
the "v" of one period with a "v' " that is either greater or less than
that "v" of that period. In no one period, do Ted and Andrew differ
from Marx with respect to your (2).

Let's note that in Marx all we know at the end of period is that
prices of production will differ if the wage changes. There is
no discussion of what will happen in the next period. To be
sure, for the most part he assumes that the prices of the means of
subsistence are constant and presumably remain unchanged throughout
all periods. But what of the other prices? He says nothing. To
be sure, he's focused on one and only one period as he examines
what would occur should the wage change. That's it. We are only
dealing with one period.

As you look at Ted and Andrew's effort, you see the prices of
production changing from period to period for no apparent reason.
But when you examine each period in their work, you find no
significant difference between Marx's and theirs. (If this is
not true, I need to know more.) Hence, you're comparing Marx's
effort for a single period to theirs over a sequence of periods.
Yet, it is unclear that Marx would say that at the end of the
period he examines no further changes take place. Why should he?
He shows what we see as basic -- a change in the wage means a
change in the prices of production in that one period. Again,
that's it. We are only dealing with a single period.

If in each and every period, Ted and Andrew are marching with Marx
in all but lock-step fashion, how then can you find fault with
their work on the basis of Marx's? I would argue that you apply
what Marx's single period effort to something quite different --
an analysis that covers a sequence of periods.

Other comments: Believe it or not it took me a while to see the
above. Hence, here I'll be brief.

1. I'm not sure how you start the transformation procedure. That is,
if we were to start with inputs priced at their "actual values" (Marx,
Chapter 12), how would you carry out a transformation?

2. I've heard you say that the initial values or input values that
are part of the transformation procedure are given sums of money
capital. This could well be the starting point for Ted and Andrew in
each and every period. We still need to locate our differences if any
concerning any further qualifications on those initial input prices.
i suspect that for you they are already transformed into the output
prices of that same one period. I do not find textual evidence for

3. Based upon the your quote a post or two ago from Chapter 11, I do
think we need to work out the effect that ground rent has on the
various interpretations of Marx's transformation procedure.

4. Believe it or not, I still have a problem with your references
to the real wage in our discussion. In Chapter 11, Marx speaks of
cases where the value of the wage changes as the real wage remains
constant. I think that in ignoring rent we fall into the idea that
all wage changes in Chapter 11 are not changes in the real wage.

I, too, look forward to "further discussion".