[OPE-L:7391] RE: Absolute and relative prices in Marx and Sraffa; was interpreting Marx's text

From: mongiovg (mongiovg@stjohns.edu)
Date: Mon Jun 17 2002 - 12:49:34 EDT

Just a few quick points.

Regarding relative prices: I think it is a little misleading to characterize 
them as pure numbers.  They represent the ratios at which commodities can be 
swapped for one another, so there is definitely a real dimension to them that 
the term "pure number" obscures.

Regarding Fred's:
>a.  ABSOLUTE PRICES are the visible expressions of the invisible abstract
>labor contained in commodities, and this visible expression is in terms of
>the EXCHANGE-RATIOS OF COMMODITIES WITH MONEY (e.g. the price of 20 yards
>of linen  =  2 oz. gold; C.I: 162).  Gold itself has no price, since the
>abstract labor contained in gold cannot be expressed in gold itself, but
>only in its relation of equivalence with other commodities  (C.I: 161).

I need to mull this over a bit.  My impulse is to want to ask what this helps 
us to see that cannot be seen using long-period prices of production.  And why 
does it make a difference whether the visible expression is given in terms of 
gold rather than any other commodity (see my comment below)?

Regarding Fred's:
>It seems to me that there is something fundamentally wrong with Sraffa's
>concept of absolute prices.  These prices are not exchange-ratios with
>money, but are instead simply pure numbers.  However, the Sraffian
>equations are supposed to represent the sum of ACTUAL costs of the inputs
>in his industry (pi*aij) and ACTUAL prices of the output in each industry
>(pj).  The actual costs and actual prices in the real capitalist economy
>are EXCHANGE RATIOS WITH MONEY.  But the Sraffian absolute prices are NOT
>exchange-ratios with money; they are simply pure numbers.  Therefore, the
>Sraffian absolute prices do no adequately express what absolute prices
>really are in the real capitalist economy - exchange ratios with money.

An off-the-top-of-the-head response to this is that cost is ultimately a 
matter of what resources--material inputs, including wage goods--are used up 
in producing the social product. For purposes of calculating the profit rate 
we want to express that cost as a price-value magnitude. So we weight the 
inputs by their prices of production.  It matters not which commodity is 
numeraire in this procedure, and one can always convert to money prices by 
selecting the appropriate numeraire. Fred's position appears to be grounded in 
a view that Marx was addressing a different problem from the one Ricardo & 
Sraffa were grappling with: for otherwise, relative prices would be all that 
matter to Marx as well.  My next question, then, would be, what exactly is it 
that Marx was trying to explain in his value theory and how is it different 
from what Ricardo was doing?  As I say, I don't think it was all that 
different, at bottom, from what Ricardo was doing.

Yes, I agree with Fred: a very interesting discussion.

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