>Rakesh, > >1) Marx is saying in the footnote (just prior to chapter 6, Vol. 1) >that over the 'long period of time' there is an 'average price' that is >'ultimately' determined by value. Yes, he says that over the long term a merchant or a mfg cannot count on selling above value in order to secure the formation of capital. > He explicitly makes clear that >value does not equal average price - he clearly has in mind prices >of production. Yes, and the value he cannot count on selling above is already suggested here to be the modified form of production price. But this does not mean that the unit price of production is not itself exhibiting a tendency to fall over time. You missed my point that Marx has not yet introduced the production process by means of which a permanent tendency towards a decline in unit values is indeed achieved. If Marx could have introduced this at this point, it would have only strengthened his argument that outputs (assuming a constant value of money) cannot over the long run be sold at inflated prices in order to secure the formation of capital. The outputs have to simply embody more value than the inputs though how this happens through the circulation of commodities is the puzzle of this chapter. As has already been discussed at length, Marx later says that the outputs have to embody sufficiently greater value that the moral depreciation of the inputs which they embody does not so reduce the value they represent that the formation of capital is undermined. Moral depreciation is the result of the continuous decline in unit values; Marx cannot introduce this phenomenon in this footnote at this point. I would think it obvious that any case for Marx's commitment to long term unit stationary prices of production would be based on a. more than a footnote where Marx is trying to constrict the possible explanations for increase in value and b. vol 3 chapters where Marx uses the language of Smith and Ricardo to carry out an immanent critique. How is it possible to think Marx believed in a phenomenon such as long term or stationary unit prices of production when a. he announces at the start of capital the inverse movmenet of unit value and use value, b. the lays bare and how why the production process is continuously revolutionized, c. he develops the concept of release of capital, d. he develops the concept of moral depreciation, e. he analyzes how as unit values decline and the mass of use values grows, capital is continously able to absorb more surplus labor. Again, I think it's a mistake to read Marx's commitment to long term natural prices or long term centers of gravity based on one footnote when much of his theory has not even been developed yet. >Moreover, he mentions Smith and Ricardo in just this >context without any qualification regarding their centre of gravity >concept. True but center of gravity is not the term used. Natural price is. In my reading Marx corrects the concept in two ways when he is done. 1. Natural price is a transformed form of value. Ricardo failed to allow for how natural prices do conflict with his law of value; he was thus unable to understand the mediations by which value determined economic magnitudes. For Marx to introduce such mediations, he cannot be constrained by the world of observed behavior and theorize on the basis of unobserved entities, e.g., the mass of surplus value which has no direct referent in the world of bourgeois practice. 2. there are no *absolute* long term centers of gravity due to a permanent tendency for unit values to drop. the stability in *relative* value can obscure the continuous reduction in unit values. By holding the value of money constant in the rigorous thought experiment which is the 3 volumes of capital, Marx is able to clearly differentiate between absolute and relative value. The classicals failed here as well. A long term stability in natural price in relative terms in no way implies stability in absolute terms. > I'm not sure how much stronger textual evidence you can >get. See above. >I am doubtful as to the validity of this 'empirical average' notion but I >can't read the footnote any other way. I would be quite happy to >drop any idea that this 'regulating price' exhibits stability over >periods of months and years. have to differentiate between stability in relative and absolute terms. The classicals failed to do this rigorously. > > > >- One thing that maybe throwing our discussion is your, to my >mind, strange notion that Walrasian equilibrium and Ricardian / >Smithian 'natural prices' have a great deal in common. I'm no >historian of economic thought but I would have thought the two are >entirely distinct. I'm certain that modern day 'general equilibrium' >prices are completely different to Smith and Ricardo's natural >prices. Eg. there is absolutely nothing in standard general >equilibrium analysis to tell us the relation of it's exchange ratios to >reality. And the whole GE thing does seem irredeemably static. Excellent question. In a recent excellent piece in the History of Political Economy Mark Blaug argues that Sraffa has misinterpreted Ricardo due to the baleful influence of general equilibrium theory. >On a different matter: > >My interpretation of Ilyenkov is a minority one. But let me just say >that my interpretation is at odds with your 'successive >approximations' reading of 'Capital'. Ilyenkov sees Marx as >'developing' the law of value. This is an immanent development not >an ongoing setting and relaxing of arbitrary assumptions. I mention >this because you often invoke Ilyenkov re the transformation >problem (and don't get me wrong, I am delighted that you do, even >if I don't agree with your interpretation). I have invoked him regarding his reconstruction of the Malthus/Ricardo debate. malthus was correct in his critique of Ricardo that the more capital develops, the more the exception (the average rate of profit) becomes the rule, the more the rule (direct value determination) becomes the exception. Marx tried to show that the more capital develops (the greater the capital and labor mobility), the more the average rate of profit itself becomes the FORM in which the law of value asserts itself. I do not think Ilyenkov would disagree that Marx's hypothesis not only required logical development but pertained to the real developmental tendencies of capital. All the best, Rakesh
This archive was generated by hypermail 2b29 : Tue Oct 31 2000 - 00:00:12 EST