Thanks, Fred, for the response. I understand your argument but disagree with it. You argue that Marx and Ricardo were addressing much the same problem, but that Sraffa was concerned with an altogether different problem. Of course I understand that Ricardo and Marx were interested to understand the historical movement of the profit rate, and that Sraffa takes up a different issue. But you overlook that Sraffa's question IS CLOSELY RELATED TO THE MAIN CONCERNS OF RICARDO & MARX; the problem of relative prices that Sraffa addresses IS present in both Ricardo and Marx: they encountered it in trying to articulate their theories of the profit rate. Sraffa showed that the problem they grappled with as a preliminary to analyzing the secular tendency of the profit rate -- the interdependence of distribution and relative prices -- is resolvable without recourse to the LTV. I think it is hard to deny that Ricardo grasped the problem and grappled with it until the very end of his life. His 1823 essay on Absolute and Exchangeable Value was written mere days before he died. The connection is harder to draw in the case of Marx, because his dialectical mode of discourse makes the textual record less transparent on this issue. You contend that Marx & Ricardo were trying to fry the same fish. But surely Ricardo WAS grappling with the same problem that preoccupied Sraffa, albeit in order to establish the robustness of his account of the secular movement of the profit rate: the textual evidence is very clear on this. Could Marx, who we agree was working in a tradition that was in important respects Ricardian, -- could Marx have avoided encountering the same relative-price issues that vexed Ricardo? Gary >> Fred's position appears to be grounded in >> a view that Marx was addressing a different problem from the one Ricardo & >> Sraffa were grappling with: for otherwise, relative prices would be all that >> matter to Marx as well. My next question, then, would be, what exactly is it >> that Marx was trying to explain in his value theory and how is it different >> from what Ricardo was doing? As I say, I don't think it was all that >> different, at bottom, from what Ricardo was doing. > >Gary, thanks very much for this question. I am happy to try to answer it. > >Actually I think what Ricardo was doing with his value theory was similar >to what Marx was doing. But Sraffa was doing something entirely different >from Marx and Ricardo. > >What Marx was doing with his value theory was to EXPLAIN SURPLUS-VALUE, >i.e. to explain the increment of money (dM) that emerges in the >circulation of capital, in the capitalist economy as a whole. Marx posed >this question clearly and starkly in Chapter 4 of Volume 1. This is a >question that is about money and absolute prices. The question is: why >is the absolute amount of money received from the sale of commodities >greater than the absolute amount of money invested to produce the >commodities, and what determines the magnitude of this absolute >difference? > >Marx answered this question in Chapters 6 and 7 of Volume 1: surplus-value >is due to surplus labor, i.e. surplus-value is the difference between the >value produced by workers and the wages they are paid. The rest of Volume >1 analyzes the trends in the rate of surplus-value and the composition of >capital over time. These trends are then combined in Volume 3 in the >famous theory of the falling rate of profit. These are the questions that >Marx's theory of value is mainly about. None of this has anything to do >with the relative prices between individual commodities (e.g. wheat and >iron), as in Sraffa's theory. > >Ricardo was doing something similar to Marx with his value theory. As >Ricardo put it in the Preface to his Principles, the main objective of >political economy is to determine the trends over time in the distribution >of income among the three great classes (wages, profit, and rent). >Ricardo first tried to answer this question without using value theory (in >a pamphlet written in 1815 entitled "Essay on the Influence of a Low Price >of Corn on the Profits of Stock"), but then he realized that this was not >possible because the capitalist economy includes many different products, >not just corn. So he developed his theory of value - his version of the >labor theory of value - in order to analyze this all-important question of >the trends in the distribution of income over time. Again, as in Marx, >Ricardo's question had nothing to do with a set of relative prices among >individual commodities, as in Sraffa's theory. Ricardo's theory did >involve a kind of gross relative price between corn (or agricultural goods >in general) and manufactured goods, but specific relative prices among >individual commodities were of no interest. What was of paramount >interest to Ricardo was the effect of the relative increase in the price >of agricultural goods on the distribution of income between wages and >profit. > >By contrast, Sraffa did something entirely with his value theory. Sraffa >determined a set of (n-1) relative prices among individual commodities, >which was of no interest to Marx and Ricardo. Sraffa did not analyze the >trends over time in the distribution of income. Sraffa's theory is all >about the determination of the set of relative prices, under increasingly >complex assumptions (e.g. fixed capital and joint production). Sraffa's >"problematic" was entirely different from Marx's and Ricardo's >"problematic". > >Furthermore, since Sraffa'a theory is only a theory of relative prices, >and not a theory of absolute prices (as we have seen in this discussion), >Sraffa's theory is NOT CAPABLE of answering Marx's question of the origin >and magnitude of the absolute increment of money (surplus-value) that >emerges in the circulation of capital. Marx's theory on the other hand, >is able to answer Sraffa's question of relative prices, although Marx was >not very interested in this question. > >Gary (and others), do you see what I mean - that Marx used his value >theory to answer an entirely different question from Sraffa, and that >absolute prices are necessary to answer Marx's question? > >Thanks again for this interesting discussion. > >Comradely, >Fred
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