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

From: Andrew Brown (A.Brown@LUBS.LEEDS.AC.UK)
Date: Wed Feb 08 2006 - 06:29:47 EST

Thanks Ian,
I need to add just one further point to clinch the debate, as it has developed (or so it seems to me anyway!). However, I now see that there is something of a problem with this development.
The (to my mind) 'clinching' point runs as follows. You [that is with your neo-R hat on] have a scalar magnitude (price), attached to each commodity, continually giving rise to a complex matrix, viz. the input-output matrix of an economy. Variations in price, on your account, are causing variations in this input-output matrix such that the resulting matrix is always a member of the set of feasible reproduction proportions. However, and this is the key point, it is impossible, or miraculous, for variations in a scalar magnitude across commodities (and through time) to cause variations in a matrix, the input-output matrix, such that these variations continually conform to feasible reproduction proportions. Impossible, that is, *unless* there is a way of reducing, or necessarily relating, the set of matrices representing feasible reproduction proportions to a scalar varying in magnitude from commodity to commodity. Only if such a scalar exists and tethers price magnitude can the continual reproduction of capitalism be possible, on this argument. 
Note there is nothing in this argument to suggest that we are dealing with a ‘substance’. We are dealing with a ‘something’, a ‘something’ that must tether price magnitude. Only once we have identified it does it turn out to be a (highly peculiar) substance (i.e. the argument that it is a substance is a later argument, it is not the argument that first must be made, and which I am therefore currently making).
The problem with the argument as it has developed in our discussions is as follows. It only makes any sense to think of price as a causal scalar magnitude when we are not thinking about change through time. In truth, and as revealed as soon as we consider change through time, the prices that are the proximate cause in production proportions do not represent a scalar at all. Money is the sole socially accepted measure of general exchangeability, and the sole item to have direct general exchangeability. This means that in comparing prices across commodities and through time we are comparing measures of general exchangeability of commodities. We are not comparing a scalar magnitude with a scalar magnitude we are comparing the magnitude of general exchangeability of one commodity with that of another commodity. Absent a ‘third thing’ this is all we are doing. In other words we do not care about money prices and profits for their own sake but because money represents purchasing power, it is the amount of purchasing power in which we are truly interested, and which truly drives production and investment. (This was the key point I was making some months ago in my discussions with Ajit regarding his and Paul’s paper). However, in fact such comparison is impossible though time because the magnitude of general exchangeability of a commodity (or of the purchasing power represented by its money price) will be quantitatively incommensurable through time (it is a many dimensional, and forever changing, vector). But this point only serves to confirm the need to find a scalar that is necessarily related to feasible reproduction proportions. For it is certainly impossible for such a vector as ‘general exchangeability’ or ‘purchasing power’ to continually cause feasible reproduction proportions through time – it has causal power only via us and we cannot make head nor tail of variations in general exchangeability through time absent the presupposition of a scalar ‘third thing’ which they represent. 
Many thanks – I fear some of the above points may need unpacking!
	-----Original Message----- 
	From: OPE-L on behalf of Ian Wright 
	Sent: Tue 07/02/2006 20:42 
	Subject: Re: [OPE-L] price of production/supply price/value
	Hi Andy
	> -something (say price) that has no necessary relation to something else
	> (say feasible reproduction proportions) cannot continually cause the
	> latter.
	> You are effectively denying this premise, as far as I can tell.
	No. If I gave that impression then I didn't explain myself clearly --
	sorry about that.
	Let's say price has a necessary relation to feasible reproduction
	proportions (and vice-versa). That is the "something" that is
	continually causing the "latter". But those prices need not refer to
	some common non-price substance (the "other" scalar). It is possible
	that there is simply a relation between price (phenomenal scalars) and
	a configuration (not a substance, simply a structure of relations). I
	think this is how many anti-essentialist neo-Ricardians view the
	matter. (E.g., I think this motivated Ajit's work with Paul on how the
	choice of numeraire affects the direction of price movements. Ajit
	thinks a dynamic theory of value is meaningless. -- Again, I don't
	agree, but the logical consistency of this view is undeniable, at
	least if the TP is accepted.)
	> 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.
	No, the neo-Ricardian critique says that the labour-value scalars are
	not "necessarily" related to "feasible production proportions". But
	prices can be.
	> 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?
	I think you may have misunderstood.
	> 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).
	The latter. The question is whether prices need to represent some
	other "substance", not whether prices can affect economic
	I note your point about it being a bit "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."
	The point of the N-R critique is that even at the very abstract level
	Marx's value theory cannot have the explanatory role it is supposed
	to. But Marx held (and in this I think he was correct) that we *will*
	(not may) find the aggregate equalities holding, at the very abstract
	level of prices of production.
	> -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
	Yes this is true.
	> On my argument, this proposition makes labour-time the only scalar that
	> could possibly continually cause feasible reproduction proportions.
	But the existence of another scalar, other than price, which underlies
	price accounting, is what is in question. The neo-Ricardian critique
	attacks Marx right at the very foundation of his project.

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