In 4800 > >Allin, I argue that the quantities of money-capital that are taken as >given are long-run average prices. It is assumed that the economy is in >long-run equilibrium (i.e. equal profit rates across industries) and that >prices are long-run average prices, i.e. prices of production. Therefore, >these quantities of money-capital that are taken as given are not affected >by the deviations of market prices from prices of production. Fred, here is another disagreement. I was convinced by Andrew K on this issue. I don't think Marx thinks there is a real tendency towards stationary prices in the long term. There is a powerful tendency towards the equalisation of profit rates along with a counter-tendency for the search for surplus profit (Grossmann, Mandel). Marx is perfectly justified in abstracting from the latter in his study of prices of production. But in the analysis of the tendency towards the equalisation of profit rates, I do not read Marx committing himself to the real existence of any tendency for the system to settle down into a set of stationary prices, i.e., unit input prices = unit output prices. As Paul Mattick Jr, John E, Andrew K, Alan F and Mino Carchedi have all correctly argued, this assumption should play no role in the formalisation of Marx's theory of price which is thoroughly dynamic (see of course Korsch's chapter on some misinterpretations of the law of value in his Karl Marx). I have quoted Ricardo himself saying that prices are changing on a DAILY basis due to technical change, and in Vol 3, ch 9-10, Marx himself says that only in the long term do prices of production change due to definite changes in the average rate of profit itself, while all other changes--that is, changes in prices of production in the shorter term should be attributed to a change in the value of commodities themselves. Marx's language here is in fact quite similar to Ricardo's. In short, there are no long run average prices. Andrew B has found exactly one quote from a footnote in Vol 1, ch 5 in support of the claim that Marx believed that there was a real tendency towards long term or stationary prices of production, but as John Aschcroft would say the totality of the evidence is against him. I haven't yet read Abelardo Marino Flores' piece "Market Price of Production: A Structural Interpretation of Disequlibrium in the Framework of the Law of Value" in International Journal of POlitical Economy, vol 28, no 4: 82-118 All the best, Rakesh
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