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

From: Andrew Brown (A.Brown@LUBS.LEEDS.AC.UK)
Date: Tue Feb 07 2006 - 14:17:39 EST

Hi Ian,

This is indeed useful - have been thinking a bit more over the issues
hence am able to respond quickly. I do indeed argue, with Marx, that as
you put it "price is necessarily and objectively a form of labour-value,
irrespective of what we, as theorists, may think or want." However my
arguments on this have not been well put and they clearly are absent
from the literature with which you are familiar. So let me try again. 

I totally agree that, as you put it, "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." It is also very true that,
as you put it, "the scalar prices can be [I WOULD SAY 'ARE'] outcomes of
structural configurations. They in turn can [DO] affect subsequent

We are agreed thus far. You go straight from the agreed propositions to
affirming the Neo-R position [and also Ajit's] writing that:

"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."

I reply that, by going from what we agree on to the questions above, you
have missed my key little argument which responds directly to the neo-R
questions you pose. The argument has the following premise

-something (say price) that has no necessary relation to something else
(say feasible reproduction proportions) cannot continually cause the

You are effectively denying this premise, as far as I can tell. This is
so because you agree that price is causing production relations and you
agree that price is a scalar. Yet you deny that any scalar (price or
otherwise) is necessarily related to feasible reproduction proportions.
In other words you are saying that something with no necessary relation
with feasible reproduction proportions (price, as determined by a
Sraffian calculation) is continually causing feasible reproduction
proportions (it must be since if it didn't capitalism would have
collapsed long ago). Before we go any further on this could I ask
whether or not I have understood you correctly thus far? If you simply
deny the above stated premise then it is the premise we should be
discussing. If not, then you must be arguing that the above premise is
not violated by the neo-R 'refutation' of the LTV (but I don't yet see
how your argument can be sustained).

You continue: "That economists do make inter-temporal comparisons of
real-cost, and perhaps unwittingly make implicit reference to an
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."

I reply that I don't think you can concede this much to my argument and
avoid swallowing it whole. Either the scalar exists or it doesn't. If
you argue that it doesn't then you cannot leave open a 'perhaps'
regarding an unwitting reference to such a scalar. Rather everything
hangs on deciding whether such an implicit reference is made or not. If
we decide that such an unwitting 'reference' is necessary to growth
theory but we insist that such a scalar doesn't exist then we are doomed
to self-contradiction because we have no choice but to study growth and
the evolution of the economy. (We are then in a similar situation to
Hume who, having philosophically satisfied himself that he has no idea
whether or not the stairs exist, in actual practical fact leaves by the
stairs instead of the window). 

You mention Ricardo's search for an invariable measure of value. This
may be useful to discuss at some stage but the above points more
important for now I think. There is, however, one important relevant
point to make here regarding the TP (which you also mention later). The
point is that it is silly to argue that the scalar we are after is
exactly proportional to market prices. Rather at a very abstract level,
we may find *aggregate* equalities holding (i.e. the level of vol. 3,
ch.9, at least where inputs are not transformed) but surely at more
concrete levels they won't. Rather, the argument is that there is a
*patterned relation* between the scalar we are after and relevant prices
and profits (relevant that is to the determination of production
proportions). An *exactly proportional* relation, or indeed any
*functional* relation, is but a small subset of all possible *patterned*
relations. We need this 'pattern' to be sufficiently tethered by the
scalar we are after in order that feasible reproduction proportions are
maintained. But it is silly to go from this to thinking that we need a
functional or exactly proportional relationship.

Next you quote my argument on labour-time as the scalar we are after and
then you reply: "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."

I reply that, *if* this was my argument *then* I would wholeheartedly
agree with your rejection of it. But it isn't my argument. My argument
concludes that labour-time is the only possible scalar, not that it is
the 'preferable' scalar from a theoretical point of view. The key
proposition of this argument is as follows

-the total available labour-time to society is equal to the total
available production time to society. That is, there is a finite amount
of production that can be done in any given time period and this
'available production time' is entirely determined by, indeed the same
as, the available labour-time 

On my argument, this proposition makes labour-time the only scalar that
could possibly continually cause feasible reproduction proportions. I
totally disagree with F&M, and others, if they think that another scalar
could do the job. Any other scalar I can think would quickly lead away
from feasible reproduction proportions.

So hopefully my argument is clearer now. I look forward to its flaws, or
weaknesses, being pointed out!

Many thanks,


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