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

From: Ian Wright (wrighti@ACM.ORG)
Date: Tue Feb 07 2006 - 12:43:45 EST

Hi Andy

I'm glad that you're finding this exchange useful. I am also finding
it helpful  to talk through this critique of Marx's LTV.

>Now, it is self-contradictory, or miraculous, for something with no necessary
>relation to feasible reproduction proportions to continually cause feasible
>reproduction proportions. It is price (a scalar) and profit that
cause production
>proportions. Hence it is self-contradictory to argue that there is no scalar,
>necessarily related to feasible reproduction proportions, tethering price and

The issue is not whether scalar prices have a causal effect on the
configuration of the economy. The issue is whether scalar prices
represent a scalar substance or real-cost that is invariant over the
configurations. The scalar prices can be outcomes of structural
configurations. They in turn can affect subsequent configurations.
Ajit, for instance, says, in one of his papers, that prices are simply
implicated in a structure of production and "nothing is hidden behind

So the neo-Ricardian critic will ask: why posit another scalar other
than price? -- particularly as the Marxist "immanent measure" of value
has all those quantitative transformation problems.

Indeed, one of Steedman's criticisms is that the economy is driven by
the *price* rate of profit. Marx's value rate of profit, S/(C+V), in
general, has no necessary connection to the price rate of profit.
Hence, redundancy.

> *If* there were no such scalar possible *then* capitalism could not possibly

If I've understood your point properly, then I think the above answers this.

>This self-contradiction manifests itself in actual practice because, in
>practice, the path of 'growth', of 'capital stock, 'profits',
'wages', etc. has to be
>studied by Neo-R's as by all economists but how can this be done, absent the
>aforementioned scalar?

That economists do make inter-temporal comparisons of real-cost, and
perhaps  unwittingly make implicit reference to an underlying
substance that price phenomena express, does not imply that there is a
value substance. The economic practice of comparison might be
mistaken. If the practice is not mistaken, the theoretical problem of
understanding the practice remains.

> Given that there must be a scalar, we need to find one.

I don't think you've established that. This is related to Ricardo's
problem of an invariable measure of value. Marx thought there was no
problem because, for him, the real-cost underlying price is
labour-time. But the neo-Ricardian critique undermines that claim.
Some neo-Ricardian critics would deny we need to find a scalar other
than price, and also point out that it has not been possible to extend
Sraffa's construction of a standard commodity to both changes in
technology and income distribution.

>There are lots of particular and individual costs of producing any product but
>none of these give a basis to sum to a scalar. As you imply, production must
>weigh up these costs all together  reducing everything to 'oil'
costs ('valuing'
>everything in oil  direct and indirect) is silly because it just
ignores everything
>except one input. Doesn't this apply to labour input? It does not because
>costing in labour-time is costing in overall production time. That
is, it is costing
>in terms of time taken for production. One cost of any product is the time it
>has takes to produce that product. There are many other particular and
>individual costs. But there is also this general time cost. There are
two reasons
>why this time cost is also called labour-time: (1) the available
labour-time is
>the sole determinant of the available production time  labour-time and
>production time are the same thing; (2) labour and other factors do not play
>the same role in production. Means of production are *given constraints* upon
>the allocation (determination of the kinds and proportions) of
labour, the latter
>determination is simultaneously the determination of the production process as
>a whole. In other words, the economic problem is primarily a labour allocation
>problem since it is only labour about which society has any 'choice' at any
>given point in time (I posted on this some months back).

Yes, the economy is about humans, and we are interested in how our
hours get used, more so than, say, horse-power, or tonnes of iron etc.
So, *if* there were a scalar measure of real-cost, which price
expressed, and there were a choice between different value bases, then
we'd like to choose labour-hours. But this doesn't address the TP.

F&M, after rejecting uniform profits as a legitimate theoretical
abstraction, employ  probabilistic arguments to avoid the TP. They
argue that probabilistic labour-content accounting can serve a
non-redundant and logically consistent explanatory role. But they
admit that, on formal grounds, oil-content etc. could serve just as
well as a value-basis. They then point out that labour-time always
persist through capitalism, unlike specific commodity-types, and also
labour-time is what economy is essentially about. These are all good
points; but they do not satisfy me because I am interested in whether
price is necessarily and objectively a form of labour-value,
irrespective of what we, as theorists, may think or want. The latter
is what Marx claimed, I believe, so F&M's stance is a bit of a


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