[OPE] The dependence of prices on labour values

From: Jurriaan Bendien <jurriaanbendien@online.nl>
Date: Thu Feb 03 2011 - 07:19:23 EST

Thanks Diego for the paper. I will state my view. The cost-price I think
should not be confused with the input cost (as Marxists, neo-Ricardians and
Sraffians usually do confuse them, or state it wrongly).

Marx's cost-price is the cost-price of the newly produced commodity. That
cost-price doesn't exist, before the commodity is produced and sold, except
theoretically. That is the real point - when the real cost price is
established, the costs have already been incurred, and cannot be changed.
You produce products, and then you have a gross revenue out of the sales
turnover, from which you deduct costs made, to establish income. But you
don't know what the true production cost will be, before there has been any
production, and before you have sold the products. Marx makes all this very
explicit himself.

>From the point of view of the accumulation of capital, Marx often assumed
that "cost-price" and "input cost" are the same thing, and that "capital
advanced" equals "capital consumed".

That is only because Marx was interested in identifying the overall effects
of capitalist dynamics in the production system (you can of course show how
a series of iterations lead to a certain overall effect).

Marx just assumed these two identities for the sake of argument - basically,
because (1) he thought that "in aggregate result" the discrepancies do not
really matter, and (2) because he was not concerned with a neo-Ricardian
input-output relationship, but instead with a relationship between capital
advanced, capital valorized and capital accumulated.

When Marx talked about the transformation of commodity-values into prices of
production, what he meant was that the exchange of newly produced
commodities for money is no longer directly regulated by commodity values,
but rather that this exchange is directly regulated by prices of production.

Marx did not mean "a mathematical transformation of values into prices".
That "academic" interpretation is idiotic anyway, since as Marx emphasizes
any commodity has a value and a price at the same time, and what matters is
precisely to what extent price is above value, below value or equal to
value. That is the whole point. Marxists misrepresented this issue, by
failing to understand the difference between material form, value-form and

As Engels correctly grasped, Marx believed that, in the history of trade,
originally, in most exchanges of wares, they were traded directly in
conformity with their value (in the simple commodity production which Marx's
simple exchange presupposes, labour costs are quite transparent, since
mostly the producer trades the whole product of his own labour), but that
capitalist production changed all this to a trade according to production
price (in a more complex division of labour, obviously, the "total labour
cost" to which Ian Wright refers is no longer transparent). Engels thought,
that the first trade according to production price would have emerged in the
16th century, with the first significant sectors of capitalist manufactures
in city states.

So, Marx's "transformation" is intended to be both:

- a logical/theoretical transformation of the categories of political
economy in line with a new reality (expressing the divergence of value from
- an historical transformation in the production and distribution system (a
change in the production regime)
- a practical transformation in consciousness (the way the discrepancy or
contradiction between value and price is mediated in practice by

In modern society, the operative production price is really a "transformed"
production price. It includes tax costs, subsidies, and ancillary benefits
and costs which have to do with market position and the monetary/credit
regime. The cost structure of production today is not the same as it was in
Marx's time.


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