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

From: Ian Wright (wrighti@ACM.ORG)
Date: Wed Feb 01 2006 - 14:22:29 EST

Hi Andy

Yes, two separate points. On the second point -- refutation of N-R critique.

>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.

I'm sure Steedman would agree that labour must be allocated in certain
proportions. So do all kinds of commodities. But he'll shrug his
shoulders -- because, according to him, labour-value accounting is not
adding anything to the analysis. What's the point of taking the
detour? Quantitatively, we cannot say, along with Marx, that, for
example, the profit-rate is primarily explained by labour-value
accounting, that total profit is a nominal representation of an amount
of surplus labour, or that the essential distributional variable is
the rate of exploitation etc. Of course the economy will collapse
without labour in proportions for reproduction. But we want to
understand economic value. Real-costs measured in corn, iron, cake
etc. also set constraints and limits.

>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).

OK, what quantitative relation obtains between labour-value and price
accounting when there is non-proportional growth? What work are you
referring to? Is it a kind of "contraint" much like Morishima's FMT
for the static case? Morishima, if I recall correctly, argued that
labour-value accounting is conservative with price-accounting under
conditions of growth in "standard proportions" (plus some conditions
on capitalist consumption, I think). Another special case in which
Marx's conservation claims hold. But not a general case. Ollin-Wright
in the "Value Controvery" outlines a constraint-based theory of
labour-value constraining the profit-rate, but it is effectively
rebuffed by Hodgson, I think.

> 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.

If you get the time to explain Fine/Sadd-Filho's reaction to TP I'd be
grateful. At first glance, the interpretation doesn't square with
Marx's remarks on the need to transform cost-price.

I wonder on what grounds should we *not* expect Marx's conservation
claims to hold under conditions of simultaneous determination and
uniform profits? -- I'm not sure anyone has really answered this.

TSS, for instance, has rejected simultaneous determination, and
attempted to elaborate simple dynamic cases in which conservation
holds. They seem to be saying that "input prices=output prices" is
simply impossible, and reject equilibrium analysis altogether. This is
an implicit admission that under the conditions set down by
Bortkiewicz, Marx's conservation claims don't hold.

F&M, for instance, have rejected uniform profits. They explicitly
concede that under the conditions set down by Bortkiewicz, Marx's
conservation claims don't hold.

Others have rejected one of Marx's conservation claims under the
conditions set down by Bortkiewicz (e.g. Foley/Dumenil).

Sorry to temporarily put on a neo-Ricardian hat!


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