[OPE-L:7509] [OPE-L:1046] Re: Re: Re: Re: Marx's Concept of Prices of Production

Fred B. Moseley (fmoseley@mtholyoke.edu)
Fri, 25 Jun 1999 14:04:56 -0400 (EDT)

On Wed, 23 Jun 1999, Paul Cockshott wrote:

> This exercise by A&T seems wierd to me. At first sight it looks like an
> exercise in showing how the system arrives at an equilibrium set of
> prices of production. As such it would appear to be an exercise in
> disequilibrium analysis. But at the same time they covertly introduce
> an equilibrium condition - an equal rate of profit - into their assumptions.
> In the end it is neither one thing nor the other.
> I agree with you that Marx's concept of price of production is a long
> run equilibrium concept. It has to be sufficiently long run for capital
> movements to equilibrate rates of profit, thus if they exist at all they
> would
> operate only over a 10 year or more period. A production period in the
> sense used by A&T is surely much shorter - of the order of months
> in industry, or a year in agriculture.

Paul, thank you very much for your comment and your general agreement that
Marx's concept of price of production is a long-run equilibrium price.

I wish others on the list would also comment, one way or the other, on
this discussion, if only briefly, as Paul did. Are Marx's prices of
production long-run equilibrium prices, in the sense of the four
characteristics I have discussed, or not?

Paul is right that Andrew and Ted's prices of production are still
equilibrium prices. But they are SHORT-RUN equilibrium prices, rather
than Marx's LONG-RUN equilibrium prices. They change every period, but
for every period the economy is in a short-run equilibrium, in the sense
that supply = demand and rates of profit are equal across industries. In
other words, the FIRST TWO of the four characteristics of Marx's concept
of price of production are satisfied by Andrew and Ted's prices of

Whether the THIRD of these four characteristics - that prices of
production function as "center-of-gravity" prices for actual market prices
- is satisfied by Andrew and Ted's prices of production is unclear. In
their original (1988) article, they stated that their prices of production
are "center-of-gravity" prices. However, in their later (1994) article,
this statement was deleted. In any case, it is difficult to conceive of
prices that change every period as "center-of-gravity" prices, as Paul
notes in his post.

However this might be, it seems clear to me that the FOURTH characteristic
of Marx's concept of prices of production - that prices change if and only
if productivity or the real wage changes - is contradicted by Andrew and
Ted's prices of production, which change every period, even though the
productivity and the real wage remain constant.

Therefore, it seems to me that it can only be concluded that Andrew and
Ted's SHORT-RUN equilibrium prices of production are not the same as
Marx's LONG-RUN equilibrium prices of production, in the sense of these
four characteristics. There is nothing in Marx's texts like Andrew and
Ted's short-run equilibrium prices of production.