Re: [OPE-L] price of production/supply price/value

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Thu Jan 26 2006 - 07:14:19 EST

Rakesh Bhandari wrote:

>> Rakesh
> Ian and Jurriaan,
> the question I am getting at is simple: how can we speak of price/value
> divergences if price of production is itself a form of value? If price
> of production is a form of value, then how can a form of value diverge
> from value? Donkeys may be a form of animal, but
> we don't speak of donkeys diverging from animals.
I think that if you use the phrase 'form or representation' or
'form of appearance' it should be clearer.
A representation is something other than what is represented.
Weight is a form of representation of mass, but is not identical
to it. Take a kilogram mass to the moon and its weight will
change, but whether on the moon or on earth, mass can
still be represented in weight. Similar problems exist in other
forms of metrology - to go from socially conventional standards
of measurement to objective measures.

The objective measure of value is social labour time required
to produce things - but to determine this requires a vast body of
information that is typically unavailable in a capitalist economy, but
which should be available in a planned economy. Price acts as
a representation of value, and, by studies using I/O tables we can
get some idea of how accurate it is as a representation.

An analogous situation exists today with the attempts to get an
accurate definition of the Coulomb of charge. This is conventionally
defined in terms of electrostatic force, but objectively it should
be defined in terms of an integral number of electron charges.
But to derive a measure in terms of electron charges requires
a technology that is not yet fully available, so it has been socially
defined in terms of forces. But this technical limitation does not
mean that there is no such thing as an objective charge in electrons,
which, with better techniques, we shall be able to measure.

> There seems to be a lot terminological confusion in Marx.
> What I am proposing is that we call simple price one form of value and
> price
> of production another form of value (neither of course is market
> price, so we can
> still speak of a divergence between value and price;
> for example the difference between market price and price of
> production is
> a practically important divergence between price and value, but not
> the difference between
> price of production and simple price which is simply a difference between
> two forms of value). Simple price and price of production are both
> forms of value;
> however the former is counterfactual and the latter is actually
> social valid (I think
> Paul C and Allin grant that there is at least a weak tendency towards
> profit rate
> equalization). Hence
> my equation value=price of production=supply price.
> At any rate, just trying to clarify my confusion and the confusion
> in Marx's texts. Hope this helps.
> Jurriaan, I hope the terminological confusion is clear even if
> you take my attempt to resolve it as poetic.
> Yours, Rakesh
>> Surplus-value is redistributed to capitalists according to capital
>> invested, rather than the number of workers they employ in their
>> sector.
>> The problem with this argument is step (iii): you can't conclude that
>> *both* (a) and (b) are false from the contradiction in (ii). Of
>> course, the fact that Marx doesn't transform cost prices, and lacks a
>> general equilibrium framework, is cause for further doubt regarding
>> the precise details of his argument, at least if we do the Bortkiewicz
>> thing and abstract from the dynamic process of the formation of the
>> general rate of profit.
>> The problem with simply specifying a MELT to translate between prices
>> of production and values, as you are proposing, is that, according to
>> the neo-Ricardian critique, not all Marx's aggregates (total profit =
>> total surplus-value, total price = total value, and rate of profit =
>> value rate of profit) will hold. According to this formalisation of
>> the problem, there is no MELT that can do this, including Foley's. So
>> the quantitative connection between value and price accounting is
>> missing, and Marx's thesis of conservation of value in price fails.
>> So that's why I think the argument requires more, even if I agree with
>> the direction you are taking it.
>> Best,
>> -Ian.

Paul Cockshott
Dept Computing Science
University of Glasgow

0141 330 3125

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