From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Mon Mar 17 2003 - 13:53:48 EST
Fred wrote > > > >> > More >> > frequent productivity change certainly does NOT mean that there >> is >> > ANOTHER >> > CAUSE of changes of center-of-gravity prices - because input >> prices >> > are >> > not equal to output prices, as in the TSS interpretation. And then asked: > >Is there no argument here either? This is the crucial point. Yes I disagee with this; as I wrote in earlier post: "Well putting aside KM, the point remains that prices of production do change interperiodically, if not continuously, not because input prices are not equal to output prices but because the productivity of labor changes interperiodically. This is why on your own terms prices of production cannot be long-run centers of gravity." > > > >Rakesh, please read again the quote from Carchedi below, and my >paraphrase, which you say you agree with. Carchedi is saying precisly >that, when there is technological change in a given period, then constant >capital is revalued in that period, so that the value transferred to the >output is the current (i.e. revalued) value of the constant capital; >i.e. input prices are equal to current output prices. Carchedi does not >differ from me on this crucial point. We agree. Fred, as I (and Allin) have said before: I think you are conflating price and value. Carchedi and you may agree that the value transferred is changed and that value transferred is the revalued value of the means of production, but input prices for what are now backward firms (or plants) are still a given precondition, and cannot change as a result of this revaluation of the value of the means of production. If Carchedi himself disagrees with that, then I disagree with him too. Of course for those firms which paid more for the means of production than they are now worth, they will suffer a loss of profitability. Laibman himself underlines this in his critque of Kliman. Moreover, we have a further disagreement. You argue that *value transferred* is determined by the current *price* of the means of production while I argue that it is determined by the current *value* of the means of production. Because you make the former assumption, your interpretation cannot accomodate Marx's point that there are two reasons for divergence between values and price. As the above paragraph makes clear, your interpretation (as well as TSS's!) simply conflates value and price. Yours, Rakesh
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