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

From: Andrew Brown (A.Brown@LUBS.LEEDS.AC.UK)
Date: Tue Jan 31 2006 - 04:06:34 EST

Hi Ian,

You write:
"Thanks for reminding me that Steedman goes on to show that
labour-values, far from determining the average rate of profit via
S/(C+V), are crucially dependent on the rate of profit under choice of
technique. I was restricting my attention to no choice of technique."

I reply:
But the 'no necessary relation' argument is, on this account, simply due
to assuming away the necessary relation by assuming away choice of
technique. What you are getting at requires unpacking the meaning of
'necessary relation'

You quote me:
> Imo, the economic basis for refuting neo-R critique lies in the 
> necessity for there to be limits on prices, to ensure enough needs of 
> workers are met, and enough profit needs of capitalists are met, 
> across the economy and through time. These limits are given by SNLT.

And you comment:
"That may well be so. But the neo-Ricardian critique assumes a static
situation (or, more precisely, self-replacing equilibrium). You're not
refuting it unless you accept the assumptions of the critique, or show
that an assumption is necessarily wrong or misguided. Steedman
challenges defenders of the LTV to do just that."

I reply:
You say 'it may well be so'. But the point is it must be so if
capitalism reproduces. Therefore you cannot argue that (i) capitalism
reproduces and (ii) there is no necessary relation between SNLT and
price. We know (i) is true hence (ii) must be false. That's enough to
immanently refute the neo-R critique. To show exactly where neo-R goes
wrong is a secondary task (see below).

You quote me:
> The theory of exploitation shows in essence how the system actually 
> enforces these limits. But it is folly to think that at any point in 
> time the aggregate equalities actually hold at market prices because 
> the limits take effect only through rupture and crisis.

And you comment:
"I agree that it would be folly when talking about market prices,
because in disequilibrium situations labour-value is not necessarily
conserved in exchange (e.g., some labour may not be equalised with other
labour because it is unwanted). But the TP is situtated in ch.9 when
Marx is talking about theoretical prices of production. Although the
text is not crystal clear, I read Marx's stress on aggregate
conservation claims to mean that he's trying to square price-value
conservation (Vol I.) with uniform profit-rate."

I reply:
I read Marx in the same way. The point about market prices has a number
of implications: firstly, it warns us against approaches to the TP which
get the result that the aggregate equalities *do* hold at market prices.
Secondly, it shows that the whole problem is down to levels of
abstraction. Thirdly, if the limits take effect only through rupture and
crisis then they will not show up in the static case - to the theorist
unaware of the structure of abstraction and causation in Marx's work
then it is therefore going to look like Marx imposes rather than
'proves' the aggregate equalities.

Many thanks,


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