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

From: Ian Wright (wrighti@ACM.ORG)
Date: Mon Feb 13 2006 - 00:58:37 EST

Hi Fred

Thanks for taking the time to reply.

> No, there is no reason to expect that Marx's claims would hold in
> "Bortkieviecz's special case".  Because Marx's claims are based on Marx's
> theory, and "Bortkieviecz's special case" is based on an entirely
> differently theory, linear production theory.  Marx's theory determines
> values and prices in one way (according to a unique logical method, which
> I have explained many times), and "Bortkieviecz's special case" determines
> values and prices in an entirely different way (according to the logical
> method of linear production theory).  So why should we expect that Marx's
> claims would hold in "Bortkieviecz's special case"?  On the other hand,
> the fact that Marx's claims do not hold for "Bortkieviecz's special case"
> SAYS NOTHING about MARX'S theory, because Marx's theory is entirely
> different from "Bortkieviecz's special case".

I have a methodological difference with you here, and such things are
hard to resolve, so it might be a case of "agree to disagree" on this

Both Bortkiewicz and Marx are theorising the same economic reality
and, despite what some might say, there's only one of those. It is not
ok to say that two theories are different and therefore
incommensurable, that there cannot be any "communication" between
them. Marx did not explicitly distinguish between equilibrium and
non-equilibrium states. His remarks on the failure to transform
cost-prices are open to interpretation: and reasonable people can
disagree on that interpretation. But that isn't too important. What is
important is the relationship between Bortkiewicz's special case,
Marx's theory and capitalist reality. I do not agree that there is no
relationship between these structures. I do not buy that Kuhnian

> > but you are not directly
> > addressing the modern form of the transformation problem.
> But since the "modern form of the transformation problem" is based on an
> entirely different theory from Marx's theory, there is no reason to
> address it, except to show that it is a misinterpretation of Marx's
> theory.  It implies nothing about the logical coherency of Marx's theory.

Marx's theory is about capitalism. Linear production theory is about
capitalism. Hence, there are relations between those two theories. One
important relation is the TP.

> > Yes the Sraffian framework is in many ways unrealistic. (Although they
> > can deal with different turnover periods).
> Ian, would you please send me references of Sraffian works that assume
> different turnover periods.  I don't see how this can be made compatible
> with the reproduction of physical quantities.

I am thinking of all the work on fixed-capital in a joint-production
framework. Although I have not studied this area, as far as I
understand it, each process produces the output plus fixed-capital of
different "vintages". The framework is sufficiently general to
encompass any kind of depreciation schedules. But I am happy to be
corrected on this point.

> > Yes, but some Sraffians reject the self-replacing interpretation of
> > Sraffa's theory -- they view his surplus equations as being more
> > general than that. But overall I think this is fair comment.
> Again would you please send references of such Sraffians?   I don't
> see how they can take the physical quantities as given and at the
> same time reject the reproduction of these physical quantities.

Sraffa made this point himself in his reply to Harrod's review of his
book. A recent article by Ravagnani (Notes on a mischaracterization of
the classical theory of value, Review of Political Economy, 2001)
rejects the self-replacing interpretation of Sraffa's theory. The idea
is that the economy need only be viable, rather than the net product
being such to enable identical production in the next round. Prices
can still be determined in such cases. I think the possibility of this
interpretation, rather than a strength, represents an ambiguity in
Sraffa's theoretical scheme. But this is a side issue.

> > Yes, the Sraffian model abstracts from many of these things. So what?
> > Bortkiewicz pointed out quite some time ago that if Marx's theory
> > doesn't hold in a simple, special case, then there is no reason to
> > think it will scale-up to more complex situations. (Unless there is a
> > good reason to think otherwise).
> But there is a good reason to think that Marx's theory would apply
> to more complex situations - because Marx's theory is an entirely
> different theory from "Bortkiewicz's special case" of linear production
> theory.

I think we need better reasons to reject simultaneous determination
other than saying that Marx theory was dynamic or had a different kind
of logic, particularly as simultaneous determination drops out as a
special case of a dynamical system at a fixed (equilibrium) point.

> If values and prices are determined as in Sraffian theory, then the
> neo-Ricardian critique follows, i.e. there is no necessary link between
> values and prices.  Maybe you can show otherwise.  However, in
> either case, if values and prices are
> determined as in Marx's theory, as I have suggested in my work, then there
> is a necessary link between values and prices - values determine the total
> amount of profit and the general rate of profit, which in turn determines
> (in part) prices of production.

I think there is work to be done relating your kind of interpretation
of Marx's theory to the N-R interpretation, rather than assuming that
they are simply written in different languages, and never the twain
shall meet. I don't think I'm being naive in thinking that rational
people, Marixsts and neo-Ricardians alike, can mutually learn from
each other via critical engagement with the other's theoretical
framework. We are tying to talk about the same object.


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