Re: [OPE-L] questions on the interpretation of labour values

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Fri Mar 23 2007 - 12:55:03 EDT

You take M as given. But--to ask a question I asked four or five
years ago--how do we know that the market prices of the constant
capital and wage goods bought directly and indirectly with that
initial M were governed by or indeed could have been governed by the
same prices of productions that you derive via your sequential,
"monetary-macro" method predicated on the labor theory of value?

At any rate, I agree that the transformation problem is not well
understood as one from C-P-C' to M-C-P-C-M'.

Marxists are also blamed for the real contradictions of capitalist
production. Commodity production only becomes generalized if
commodity production is generally capitalist production. But the
general mediation of the social relations of production via
commodities requires that the law of value governs commodity prices
if society is to allocate its labor in such quantitative and
qualitative terms that reproduction of society is possible while
capitalist production yields some tendency towards an equalization of
the profit rate once capital markets and a market in formally free
wage labor are developed. This real contradiction manifests itself it
in prices of production which while concealing the law of value also
expresses the fact that the working class is exploited as a
supra-individual subject.

In other words, what critics take to be the logical contradiction
between the law of value in Capital I and price of production in
Capital III is the theoretical expression of the real contradictions
of capitalist production. Geoffrey Pilling states this well in his
book on Marx's Capital.

While the law of value and law of the equalization of the profit rate
are in objective contradiction, the first is the dominant tendency in
the dynamic course of capital accumulation as underlined by its
ability to account for changes in exchange ratios over time (it's not
Ricardo's 93% Labor Theory of Value that Marx accepts per  se but his
proposition that the law of value successfully accounts for
inter-periodic changes in exchange ratios) and in the periodic,
crisis inducing shortage of surplus value vis a vis the already
accumulated capital (Grossman, Mattick).


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