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

From: Ian Wright (wrighti@ACM.ORG)
Date: Tue Jan 31 2006 - 12:12:01 EST

Hi Andy

> 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'

OK. And I agree that Steedman's account of choice of technique is
intended to show the irrelevance of labour-value accounting for the
allocation of social labour-time. Labour-values are "necessarily"
related to the price rate-of-profit, but only in the weak sense of a
consequence, or side-effect.

The reason that Steedman's views labour allocation in this way is
because he affirms, following Bortkiewicz, that the price
rate-of-profit (or general rate of profit) is not S/(C+V) as Marx
claims. So, contra Marx, labour-value accounting cannot fix the
general rate of profit. Why can't it? Because there is this
"informational gap" between prices and labour-values that I mention,
and which Steedman introduces early on in his book (the diagram with
the two unconnected prongs).

> 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).

OK. You may need to expand a bit. I interpret your paragraph as
saying: Steedman says allocation of social labour-time is partially
dependent on price rate-of-profit. Hence, there is a necessary
relation between price and labour-time.

This is a good thought. But I think you need a bit more to refute
Steedman. You'd have to show that the distribution of social
labour-time, in turn, determines the price rate-of-profit, even if
indirectly. But that is what his redundancy critique denies.

> 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.

All good points. I have certainly felt in the past that capitalism may
be constituted such that the conservation claims cannot "show up in
the static case". I also agree with TSS school that putting Marx into
a static equilibrium framework does no service to his irreducibly
dynamic analysis. However, I believe that getting the right
conservation laws is a precondition for getting the right causal
theory. Certainly in many other fields of science this has turned out
to be the case. And often the simplest and most illuminating models
assume strict conservation, at least to begin with, even if in
practice we know that all systems lose energy due to imperfect
transformation of the energy substance into the specific forms that
reproduce the dynamics (e.g., some kinetic energy into heat rather
than potential energy, hence impossibilty of perpetual motion machines

The "static case" represented by neo-Ricardian models is not static in
the sense that production and circulation is not taking place; it is
static in the sense that production and circulation are taking place
in exactly the same way, all the time. It is like a mass travelling at
constant velocity in a vacuum, rather than a scale with weights in
balance. Why shouldn't we expect Marx's conservation claims to hold in
such a special case? If they do not, why would we expect Marx's
conservation claims to hold in more general cases? etc.


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