[OPE-L:7398] Absolute vs. relative prices in Marx and Sraffa

From: Gil Skillman (gskillman@mail.wesleyan.edu)
Date: Fri Jun 28 2002 - 19:09:00 EDT

Greetings, all.  I've been itching to join the quite interesting discussion 
between Fred and Gary re competing conceptions of "absolute" and "relative" 
prices in Marx and Sraffa (and re, more generally, the insights to be had 
from their alternative conceptions of capitalism).  But as I'm coming late 
to the discussion, a lot of ground has already been covered and it's hard 
to decide where to enter the fray.  So I'll begin with a single point and 
work outward from there, to   the extent that others are interested in 
pursuing the thread.

  Fred suggests that Marx and Sraffa conceive of "absolute prices" in 
fundamentally different ways, on the grounds that, for Marx, absolute 
prices of commodities are expressed as "exchange-ratios of commodities with 
money" (thus measured, e.g., in units of gold per commodity), whereas for 
Sraffa, absolute prices are "pure numbers" and thus "not ratios of exchange 
with money" but instead "those values that are consistent with the 
reproduction of the system of physical inputs and outputs."

I agree with Gary that there is less fundamental difference here than meets 
the eye--specifically, no difference that has any fundamental analytical 
implications.  The fact that absolute prices are pure numbers in Sraffa can 
be seen as a simple corollary of the fact that, for the points that Sraffa 
wants to make (the relevance of which to Marx's account I'll discuss 
below), no purpose is served in specifying the money commodity.  Doing the 
latter would simply add a layer of complexity without changing any of 
Sraffa's results.  Thus one might invoke Occam's razor as the basis for 
Sraffa's not introducing this complication.

But it seems clear to me Sraffa's specification is entirely consistent with 
the notion that commodity prices are interpreted as exchange ratios with 
money.  Thus, the only way to make sense of Fred's claim that Sraffian 
"absolute prices are those values that are consistent with the reproduction 
of the system of physical inputs and outputs" is to imagine that these are 
prices that might conceivably be paid by actors in a competitive capitalist 
economy (i.e., an exchange economy in which profits and wages exist and the 
"law of one price" obtains for commodities and the rate of profit).  If one 
doesn't imagine something like this, then Fred's phrase "consistent with 
the reproduction of..."  has no evident meaning.  And of course, such 
prices are denominated in terms of some money good, be it commodity or fiat.

A corollary of this is that there is no essential difference between 
saying, with Marx, that the money commodity "has no price" (because nobody 
exchanges gold for gold), and treating the money commodity (implicitly) as 
a numeraire good.  For the purpose of this discussion, these 
representations can be taken as synonymous.

More later....


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