On Thu, 25 Jan 2001, Allin Cottrell wrote: > I agree with Rakesh's general point. The price of inputs to the > production of any given commodity could rise (or fall) for a > host of contingent reasons having nothing to do with changes in > the conditions of production or the labour-time it takes to > produce them (e.g. short-run supply/demand issues). Such > changes will alter cost price. Therefore on Fred's reading they > will also change the value of the output commodity. This seems > theoretically unacceptable: _values_ would be affected by any > and all factors that influence market prices. Then what's > happened to the idea that values are determined by the socially > necessary labour-time required for a commodity's production? > > Allin Cottrell. 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. I also argue that the money new value (the second component of the value of commodities) is determined by the quantity of current labor (N = m Lc), from which it follows that surplus-value is determined by the quantity of surplus labor (S = m Ls). It is in this sense that this theory is a LABOR theory of value. Comradely, Fred
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