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

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Mon Feb 06 2006 - 07:42:30 EST

Fred Moseley wrote:

> I think that part of the difficulty here is that linear production theory
> makes the totally unrealistic assumptions that all industries have the
> same turnover period, and furthermore that at the beginning of the period,
> all capital is in the form of input commodities, then all these inputs
> move together into the production process, and then all outputs are
> completed at the same time, and finally (and most importantly) all outputs
> are sold at the same time.  Sraffa called this method the "annual
> harvest".  This totally unrealistic "harvest" method is necessary if all
> prices are to be determined simultaneously, from given physical
> quantities.  Sraffa's question is:  how can exchange of all goods take
> place at the end of the period (after the "harvest"), so that the initial
> physical quantities can be exactly reproduced, and the same process can
> start all over again the next period.
> But in reality, different industries have different turnover periods, and
> in most industries production and sales are continuous, occurring daily,
> not all together once a year.  Also in reality, capital is in all of its
> forms simultaneously - part of the capital is money capital at the
> beginning of the circuit, part of it is commodity capital as inputs, part
> is productive capital, and part of it is commodity capital as outputs.
> Therefore, if the price of a given means of production changes, due to
> changes in the industry that produces that means of production, then as
> soon as the means of production are purchased with the new price, then all
> similar means of production in use in other industries, and at any stage
> of the circuit of capital in these other industries, are revalued to equal
> the new price of the means of production.
I agree that the  Sraffian theory oversimplifies in this area. However
one could recast all of it in terms of rates of flow but it is not clear
that this would invalidate the result that prices of production could
be deduced independently of recourse to labour values.

I other words, making the Sraffian model more complex in the
ways you stipulate whilst retaining the profit equalisation criterion
and retaining simple reproduction would not necessarily vitiate
their critique.

Paul Cockshott
Dept Computing Science
University of Glasgow

0141 330 3125

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