[OPE-L:7359] Re: Re: Re: Re: interpreting Marx's texts

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Fri Jun 07 2002 - 22:38:55 EDT

re 7343

>Rakesh, I have two questions of clarification for now:
>1.  What do you think is the difference between "conceptual
>determination" and "calculation"?  Why do you prefer "calculation" over
>"conceptual determination"?  And what exactly is "real
>determination"?  How is "real determination" related to  "conceptual
>2.  What would you say Marx was doing in the determination of prices of
>production in Part 2 of Volume 3: "real determination" or  "conceptual
>determination" or  "calculation"? 
>I look forward to your replies and to further discussion.

thanks for the reply. the questions which you posed are difficult 
ones--I am still hoping that Anwar will reply to your important 
challenge.  Before I provide my answers, let me clear something else 

Meek says that Marx attempted  a journey from values to prices of production.

Now you are argue that Marx attempted a journey from givens in money, 
not values, yet if the sum of invested money that you take as a given 
was in turn determined more or less by the prices of production of 
the means of production and wage goods which served as inputs, then 
aren't you saying that Marx simply made a journey from prices of 
production  to prices of production? The seemingly tautologous nature 
of your theory of price derivation has provoked criticism before.

Moreover, since you argue that prices of production do have the 
property of long term equilibrium prices, how does your monetary 
macro interpretation allow us to know that the prices of production 
which Marx derives could have been the  prices of production for the 
inputs the monetary purchase of which you take as the given?

It does not seem to me that your theory moves us any closer to 
proving that Marx does have a valid theory of equilibrium prices. And 
as Andrew argued, once you agree that prices of production have to be 
equilibrium ones, you cannot but arrive at the same prices of 
production which are yielded by the formalism of simultaneous 
equations. You then countered that your prices of production will be 
different than Bortkiewicz's or Sraffa's because you take the money 
wage rather than the real wage as the given.

But that leads us back to the same problem. If you take the money 
wage as given, presumably that was determined more or less by the 
prices of production of wage goods. Which then again yields the 
question of whether we can be sure that your monetary-macro prices of 
production for the output which is wage goods could have been the 
same prices of production for the input wage goods. You argue that 
they have to be the same prices of production, but I don't see how 
you show that they indeed are. How do you prove that your macro 
monetary prices of production would allow the economy settle down 
into price equilibrium?

Now since Carchedi does not assume that the prices of production 
which Marx derives for the outputs are, have to be, or could have 
been the same as the prices of production for the inputs, he does not 
have a similar burden. Some will say that a true price of production 
theory should be able to pass a Walrasian test of equilibrium, so 
Carchedi is wrong not to worry about whether the prices of production 
which he derives for each sequence are equilibrium ones. But this 
objection makes no sense to me. The equilibrium test would only be 
valid if it were true that a theory which does not hold in 
equilibrium cannot hold in a dynamic framework. But that does not 
follow; moreover, since Marx's theory of prices of production only 
holds for capitalist reality, why should the theory be valid for a 
state in which the capitalist economy never finds itself, viz. 
equilibrium? Why should any theory of price in a bourgeois economy 
pass the equilibrium test?

But you argue  against the TSS school that Marx's prices of 
production have to be equilibrium prices without proving that Marx in 
fact derived prices which can serve as long term centers of gravity.

And this finally brings us to Shaikh who does in fact attempt to show 
how one can proceed from prices proportional to values (simple or 
direct prices) to equilibrium prices of production which can regulate 
the prices of both the inputs and the outputs. Your macro monetary 
theory does not demonstrate that Marx in fact derived equilibrium 
prices of production. So in terms of demonstrating what both you and 
Shaikh think has to be demonstrated--Marx's prices of production can 
be equilibrium prices, and determined by labor value 
magnitudes--Shaikh's approach is simply better, though you are in 
fact correct that Marx does not begin with values or simple prices 
but with the sum of money which actual capitalists had to have laid 
out to commence the circuit of capital and that there is no need to 
transform the inputs (of course an inverse transformation is needed).

Yet if we have equilibrium prices of production, the technical 
conditions and the distributional parameters have to be constant. It 
is argued that if we have data of the technical conditions and 
distributional parameters we do not need values to calculate the 
prices of production. Moreover, it is argued  values can only be 
inferred from the technical conditions. So then the objection is why 
do we need to make reference to value at all in the calculation of 
prices of production. Moreover, once we take the technical conditions 
and real wage as given, it does not matter whether we start from 
prices which are proportional to values or prices which have some 
random relation to values (I take this to be Hodgson's argument on 
p.91-92  of the Value Controversy):  the fixed point iteration 
through its own process will arrive at the same equilibrium prices of 
production whether or not we begin with prices proportional to values 
or say 20 periods into the iteration in which prices will no longer 
be proprotional to values.   Why is value not simply redundant?

This is the question which Shaikh attempted to answer.

All the best, Rakesh

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