Re 4321 Andrew (B), let me skip to this textual support of Marx's adoption of the classical long term (unit) prices of production. I have so far argued against Ajit's and Duncan's reading of capital 3, chs 9-10 as committed to such long term centers of gravity and thus a solving of his transformation problem in terms of equilibrium prices which in my reading is completely foreign to Marx's approach (and reality). In these chapters Marx is mainly trying to uncover why it is that the value determination of economic magnitudes is obscured. It is often recognized that Marx attempts to show here that the average rate of profit does not modify or contradict the law of value but rather becomes the form in which it is expressed. However, it often missed that Marx explores another way value determination is obscured. Exactly because profit is appropriated in terms of the mark up on the average cost prices in the industry, those firms which are successful in reducing cost prices vis a vis the average can claim extra profit. Marx argues that a most effective way to reduce unit cost price and thus claim extra profit is by replacing paid labor with machines (per unit c and v may fall but c rises relative to v). To the businessman in the thralls of competition, the labor theory of value provides no guide to action. These common sense notions then become the basis for bourgeois economics as well. So I do not read Marx as committing himself to any notion of long term centers of gravity in these chapters (again I think he has long ago dropped vol 2 assumptions of constant value, annual turnover of fixed capital, exchange at value, all assumptions which allowed him to radically simplify the realization problem he was analyzing but which were never meant to be turned into controlling methodological postulates); rather Marx here is attempting an immanent critique of classical economics because even this scientific undertaking could do no more than systematize the everyday notions of the agents caught up in capitalist competition. (this critique of the everyday suggests interesting comparisons to Heidegger's conceptualisation of the everyday and the first rate philosopher and sociologist Bourdieu's analysis of what he calls habitus.) Marx wants to show why those phenomena that appear to contradict the law of value--the principle of the average profit rate and the extra profitability from labor replacing technical change--are best explained in terms of it. But this scientific endeavor has Marx use concepts (e.g. Fred's macro entity of the mass of surplus value) which have no referent in the world of observed behavior. This anti positivistic hypothesizing on the basis of unobserved entities--which is what I think Marx meant by mediating links--is rankling Gil quite a bit, just as Karl Pearson was way upset by the Mendelians. Now you claim to have found evidence for where Marx positively commits himself to the notion of long term centers of gravity for unit prices of production (and I am interested in all evidence for this since it seems to me to run counter to Marx's dynamic understanding of capital accumulation, marked by continuous improvement of technique, saving of constant capital, release of capital, moral depreciation, etc): >[btw, there's no doubting that, in Cap1, Marx seemed to envisage >prices of production as long run centres of gravity rather like Smith >and Ricardo's 'natural prices' - check out the footnote that occurs >just before chapter 6...but this is all at a more concrete level than >the SV argument]. Obviously I do not read the footnote this way This chapter aims to show that commodity exchange cannot be a method of increasing value (if one does not assume its purity, it can of course be a method for the redistribution of value, but then one's gain is another's loss; one can follow Gil and argue that there is something arbitrary about the way Marx rules out merchant capital and interest bearing capital as methods by which value is actually increased). That is one can argue that Marx builds artificial assumptions into the problem such that only labor power can be the source of surplus value. Now in the footnote, Marx reads to me as ruling out the possibility that a merchant can sell dear in a cornered market for long or a mfg can maintain a monopoly over a long period; this would lead to an inflation of price over "value" (marx underlines that he is using the term loosely) and explain capital formation on this basis. This route to capital formation however is simply not secure enough in the long run. The capitalist cannot count on forming capital on the basis of exceptional prices. One turnover's output may enjoy a monopoly price, the next a distress price. So surplus value has to be explained on the assumption of the output selling at its average price, which he loosely calls value here. Which is a very different point than claiming that there is a single center of gravity for unit prices of production over the long term. Or that unit values are stationary except in the long run. In fact remember that marx has not even introduced the production process yet. But it is by means of the continous revolutions therein that commodity value is depreciated. In a dynamic economy the chance of capital formation on the basis of price inflation is even less (assuming of course a constant value of money!) The output itself simply has to have a greater value than the input. Yet how is this possible if, as Marx has argued previously in this chapter, commodity exchange allows in its pure form only for the exchage of equivalents or more realistically merely for the redistribution of value, not its increase? This is the kind of thing this paragraph is about, not price theory over the long term. It may have the logical flaws Gil insists on but it really can't be read as a defense of the notion of long term centers of gravity in the construction of what both Gil and Alan F call Walrasian Marxism (in which money is treated as secondary and equilibrium prices are assumed). I have also argued that Walrasian Marxism is self consciously developed in the founding text of Marxist economics--Sweezy's Theory of Capitalist Development in which money is ignored and Bortkiewicz embraced. All the best, Rakesh
This archive was generated by hypermail 2b29 : Tue Oct 31 2000 - 00:00:12 EST