re Jerry's 4911 > >A) Andrew has evaded responding to the following VERY CLEAR quote from >*Marx* (with Fred's EMPHASIS): > >1) re causes for changes in the POP > >> For example, from Chapter 12 of Volume 3 (pp. 307-08): >> >> "The price of production of a commodity CAN VARY FOR ONLY TWO REASONS: >> > > (1) A CHANGE IN THE GENERAL RATE OF PROFIT. This is possible only if the >> average rate of surplus-value itself alters, or, given an average rate of >> surplus-value, the ratio between the sum of surplus-value appropriated and >> the total social capital advanced. > > >> In so far as the change in the rate of surplus-value does not rest on the >> depression of wages below their normal level, or a rise above this - and >> movements like this are never more than oscillations - it can occur only >> because the value of labor-power has either fallen or risen; BOTH OF THESE >> ARE IMPOSSIBLE WITHOUT A CHANGE IN THE PRODUCTIVITY OF LABOR of that labor >> that produces the means of subsistence, i.e. WITHOUT A CHANGE IN VALUE of >> the commodities that are consumed by the worker. >> >> Alternatively, there may be a change in the ratio between the sum of >> surplus-value appropriated and the total social capital advanced... If >> the same labor sets more constant capital in motion, it has become more >> productive, and vice versa. Thus A CHANGE HAS TAKEN PLACE IN THE >> PRODUCTIVITY OF LABOR AND A CHANGE MUST HAVE OCCURRED IN THE VALUE of >> certain commodities... >> >> (2) The general rate of profit remains unaltered. In this case the >> production price of a commodity can change only because ITS VALUE HAS >> ALTERED; because MORE OR LESS LABOR IS REQUIRED for its actual >> reproduction, whether because of a CHANGE IN THE PRODUCTIVITY OF LABOR >> that produces the commodity in its final form, or in that of the labor >> producing those commodities that go towards producing it. The price of >> production of cotton yarn may fall either because raw cotton is produced >> more cheaply, or because the work of spinning has become more productive >> as a result of better machinery... >> >> ALL CHANGES IN THE PRICE OF PRODUCTION OF A COMMODITY CAN BE ULTIMATELY >> REDUCED TO A CHANGE IN VALUE ..." > >This seems pretty clear to me. Does it seem so to others? Well yes it's clear evidence in support of Fred's interpretation about the causes of change in prices of production. But this quote does not support Fred's idea that prices of production are *long-term* average prices which do not change interperiodically. Fred has simply made the mistake of concluding that Marx's prices of production do not change interperiodically because they change as a result of changes in the average rate of profit only over the long term. However due to reason number two above (cf Ricardo, Principles, p. 36, Sraffa's ed), prices of production change interperiodically due to revolutions in the value of commodities themselves. This of course justifies Carchedi's sequential and dynamic approach which rules out Duncan's, Allin's, Shaikh's and others' approach of beginning with a price free physical or value system, determining output PV ratios and then iteratively appling those PV ratios to the inputs until equilibrium prices are determined. Whatever one is to make of this price calculation system, its static nature makes it foreign to Marx's approach. I have also argued that Fred's formula for the determination of the value of a commodity cannot make sense of why Marx argues both in Capital 3 and TSV III that there are two reasons why the value of a commodity and its price of production diverge. My explanation of why Marx notes two reasons then leads to what Fred has called my inverse transformation problem. But that is another point. Yours, Rakesh
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