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

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sat Mar 24 2007 - 13:01:26 EDT

>Quoting Rakesh Bhandari <bhandari@BERKELEY.EDU>:
>>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?
>Because the M that is taken as given is equal to the long-run
>center-of-gravity prices of the means of production and means of
>subsistence, and these long-run center-of-gravity prices are eventually
>explained as equal to prices of production.

But as I argued four or so years ago you are just asserting--not
demonstrating or proving--that the prices of production of the mop
and mos bought with the initial M had to have been the same as the
prices of production which you derive with your sequential monetary
macro method predicated on the LTV.

Simply put, there is a difference between assertion and demonstration.

Also,  Marx thought in the long run there would be  a tendency to
equalize profit rates across sectors, not that there would ever be a
period in which input and output prices would be the same or the
outputs would be the qualitatively same goods as the inputs.
Technological dynamism, including product innovation, are obviously
key features, so there is no real existence to the Marshallian and
modern neo classical category of long run center of gravity prices.
That concept is different from Ricardo's or Marx's concept of long
run price, which assumes only that prices will tend to equalize
profit rates not become stationary.

Carchedi does not assert or think that the prices of production he
derives via his sequential method are likely to be the same as those
which governed the prices of the mop and mos bought with the initital

For Marx a central  contradiction is that society must engage in self
constraining production and reproduce itself thereby while
capitalists are each trying to appropriate maximum profit from
society. The latter leads to an unintended tendency towards the
equalization of the profit rate and pushes prices away from value but
the law of value still regulates the average rate of profit;
moreover, differential rates of labor productivity growth are still
the most important determinant of changes in exchange ratios over

But for the contradiction between value and price of production Marx
is blamed rather than private profiteering which in fact does not
allow those trapped in its logic to see the ultimate determinant of
economic magnitudes in value. Bourgeois understanding is sadly common
sensical. It will only be in situations of objective crisis that the
critique of political economy  will have a chance of breaking the
strangling hold of common sense, the theology of everyday economic


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