Re: [OPE-L] price of production/supply price/value

From: Andrew Brown (A.Brown@LUBS.LEEDS.AC.UK)
Date: Wed Feb 01 2006 - 04:39:44 EST

Hi Ian,
There are two completely *separate* points - trying to link them has caused confusion.
(1) Steedman's own theory of the relation, or lack thereof, between labour-time and price:
Here the problem was that he can't both claim labour is derivative of profit and claim that labour and price have no necessary relation. Now you have clarified that it is a 'weak' relation, a side-effect. 
(2) The refutation of the Neo-R critique of the LTV: 
This rests on the propostion that social reproduction requires labour, and its product, to be allocated in certain proportions. The set of feasible proportions is certainly large but much smaller than that of non-feasible proportions. These proportions can only be met if exchange of products is bounded by limits set by SNLT. If they aren't the economy collapses. I don't have to 'show' anything more than this to refute Steedman. However we can fruitfullly ask why he has been led astray, and how labour-times actually take effect. The answer lies, inter alia, in the fact that he deals with the static case. If you look at the dynamic case then it becomes much clearer how labour-time keeps prices in check: whenever capital tries to move away from the source of its life-blood, surplus value production, it finds it cannot do so, in crisis. Maybe a primitive mathematical way of putting it is that the effect of growth rates serves to magnify that of levels, yet the static case examines only the latter. What look like wide and trivial limts in levels suddenly become narrow and constraing limits once growth rates are studied (cumulative causation). By 'growth' I mean changes cause by new investment through time, not 'steady state growth' (which is not really growth at all).
An aside re. simplest vs more complex cases: For me the simplest case is where the value and price of inputs is held constant through the transformation (the OCC case, not VCC case, employing Fine/Sadd-Filho interpretation of Marx's definitions), where conservation laws hold perfectly at the aggregate level, as shown in vol 3 ch 9.
Many thanks
-----Original Message----- 
From: OPE-L on behalf of Ian Wright 
Sent: Tue 31/01/2006 17:12 
Subject: Re: [OPE-L] price of production/supply price/value

	Hi Andy
	> But the 'no necessary relation' argument is, on this account, simply due
	> to assuming away the necessary relation by assuming away choice of
	> technique. What you are getting at requires unpacking the meaning of
	> 'necessary relation'
	OK. And I agree that Steedman's account of choice of technique is
	intended to show the irrelevance of labour-value accounting for the
	allocation of social labour-time. Labour-values are "necessarily"
	related to the price rate-of-profit, but only in the weak sense of a
	consequence, or side-effect.
	The reason that Steedman's views labour allocation in this way is
	because he affirms, following Bortkiewicz, that the price
	rate-of-profit (or general rate of profit) is not S/(C+V) as Marx
	claims. So, contra Marx, labour-value accounting cannot fix the
	general rate of profit. Why can't it? Because there is this
	"informational gap" between prices and labour-values that I mention,
	and which Steedman introduces early on in his book (the diagram with
	the two unconnected prongs).
	> You say 'it may well be so'. But the point is it must be so if
	> capitalism reproduces. Therefore you cannot argue that (i) capitalism
	> reproduces and (ii) there is no necessary relation between SNLT and
	> price. We know (i) is true hence (ii) must be false. That's enough to
	> immanently refute the neo-R critique. To show exactly where neo-R goes
	> wrong is a secondary task (see below).
	OK. You may need to expand a bit. I interpret your paragraph as
	saying: Steedman says allocation of social labour-time is partially
	dependent on price rate-of-profit. Hence, there is a necessary
	relation between price and labour-time.
	This is a good thought. But I think you need a bit more to refute
	Steedman. You'd have to show that the distribution of social
	labour-time, in turn, determines the price rate-of-profit, even if
	indirectly. But that is what his redundancy critique denies.
	> I read Marx in the same way. The point about market prices has a number
	> of implications: firstly, it warns us against approaches to the TP which
	> get the result that the aggregate equalities *do* hold at market prices.
	> Secondly, it shows that the whole problem is down to levels of
	> abstraction. Thirdly, if the limits take effect only through rupture and
	> crisis then they will not show up in the static case - to the theorist
	> unaware of the structure of abstraction and causation in Marx's work
	> then it is therefore going to look like Marx imposes rather than
	> 'proves' the aggregate equalities.
	All good points. I have certainly felt in the past that capitalism may
	be constituted such that the conservation claims cannot "show up in
	the static case". I also agree with TSS school that putting Marx into
	a static equilibrium framework does no service to his irreducibly
	dynamic analysis. However, I believe that getting the right
	conservation laws is a precondition for getting the right causal
	theory. Certainly in many other fields of science this has turned out
	to be the case. And often the simplest and most illuminating models
	assume strict conservation, at least to begin with, even if in
	practice we know that all systems lose energy due to imperfect
	transformation of the energy substance into the specific forms that
	reproduce the dynamics (e.g., some kinetic energy into heat rather
	than potential energy, hence impossibilty of perpetual motion machines
	The "static case" represented by neo-Ricardian models is not static in
	the sense that production and circulation is not taking place; it is
	static in the sense that production and circulation are taking place
	in exactly the same way, all the time. It is like a mass travelling at
	constant velocity in a vacuum, rather than a scale with weights in
	balance. Why shouldn't we expect Marx's conservation claims to hold in
	such a special case? If they do not, why would we expect Marx's
	conservation claims to hold in more general cases? etc.

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