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

From: Ian Wright (wrighti@ACM.ORG)
Date: Thu Feb 02 2006 - 12:45:43 EST

Hi Andy

> Please do keep your Neo-R hat on, it makes for very fruitful conversation!

I don't like wearing it. :)

> Your response is effectively two arguments, and these two arguments contradict one another! First you agree that there must be constraints on prices due to the needs of social reproduction, inclusive of the proportional distribution of labour. The only issue you have is that not only labour but all other factors of production must be proportionally distributed. Now, this effectively means you are agreeing that a third thing, 'value' must exist, insofar as you are agreeing that prices must be quantitatively constrained by something throughout the existence of capitalism.

This is a fair point, but I don't think it quite does the job you
think it does (see below). As an aside, an implication of your
argument -- which you may agree with -- is that a third thing, `value'
must exist, whenever there are *prices* (i.e., not just under the
domination of the capitalist firm). So value predates capitalism, and
Marx's opening chapters of Vol.I are a historical-logical exercise.
For what it's worth, I don't think Engels was foolish to talk of the
pre-capitalist history of value.

>For me, 'value' is that 'something' which does the constraining, and
the quantity of value is then the quantity which sets these
constraints. The question you are then left with is just what are
these constraints? And here you have no answer. You can see what sets
them, *all* factors of production, but have no idea how they combine
to form a single quantity, separate from, and constraining, prices.

Some neo-Ricardians will reject this reasoning. They recapitulate the
history of the Ricardian school in the sense that objective
value-theory is finally abandoned. Ajit, who I think has thought very
deeply and thoroughly about the implications of Sraffa's critique for
value-theory, argues, if I understand him correctly, that any scalar
measure of real-cost is a chimera because, for example, the standard
commodity is a function of an economic configuration, rather than
something that can persist through time and serve as an invariable
measure of value. So this third thing, this scalar that you are
looking for, is impossible.

The assumption in your argumentative step is this: you assume that for
prices to be constrained there must be a scalar quantity that does the
constraining. According to some neo-Ricardians, the only scalar
quantities worth talking about are price phenomena. The actual
constraints are structural -- technique, real wage, distributional
variable. No need to posit an underlying value measure. And these
structural constraints persist through time.

> Well, this is what SNLT is all about. Any society has to determine ('choose') its current and future productive activity. It only has a finite amount of such activity per day, per week, per year, which it has to allocate. The social cost of producing any product is therefore to be reckoned in the total time of productive activity it takes up, relative to the social total to be allocated. The amount of steel, or peanuts, or more plausible candidates like land or energy, used is relevant only in terms of the time of productive actvity it represents. If you ridiculously tried to cost according to 'quantity of steel used up' you'd just run into the buffers, the limits, set by the real cost which is that of time of productive activity taken. Another phrase for 'time of productive activity taken' is SNLT [Alfredo S-F correctly calls it RSNLT, where R stands for 'reproduction']

Everyone knows labour must be allocated. That is not in question.

Even granting that you have established there must be an underlying
scalar `value' measure, it does not follow that it is SNLT. Perhaps if
we assume that social labour is the ultimate scarce good (on the
heroic assumption that all other scarcities are eventually in
principle resolvable via the application of human ingenuity) then
maybe labour is special, the real "limit" or "buffer", rather than
corn, steel, oil etc.

> Your *second* argument contradicts your first. It is that the whole move to 'value' is redundant - why take the detour etc.? Well, this is answered by your first argument: there *are* constraints on prices, it is hardly a 'detour' to enquire into them.

Neo-Ricardian critics will simply answer that constraints on prices
need not imply a scalar value substance.

More later,


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