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

From: Ian Wright (wrighti@ACM.ORG)
Date: Mon Feb 13 2006 - 15:47:49 EST

Hi Paul

> I disagree at this point, the theory of F&M is a causal theory,
> just as much as atomistic accounts of thermodynamics are
> causal.

I did not express myself precisely. It is not a causal theory in a
similar sense that Sraffa's theory is not a causal theory. Both are
equilibrium theories, although the concept of equilibrium is very
different. A certain type of causal change is abstracted away. In a
limited sense there are dynamics in F&M's scheme. A statistical
equilibrium always supports fluctuations. The distinction I am trying
to draw is between any kind of equilibrium theory (deterministic or
probabilistic) and a more general dynamic theory (deterministic or
probabilistic). I think the latter is required to fully understand the
theory of economic value. E.g., F&M don't get as far as developing a
"nonequilibrium thermodynamics" for capitalism.

But I don't think I can support this point of view in a brief email,
so I will not try. A simple analogy might help. It is not possible to
deduce the semantics of a thermostat by observing a set of independent
equilibrium states in which the ambient temperature matches the
thermostat setting. Part of the meaning of the control sub-states of
the thermostat are only revealed in non-equilibrium states, when the
temperature mismatches the thermostat setting. F&M's theory has some
elements of dynamics, but its probabilistic nature does not inherently
address the need to understand the causality of money and abstract
labour out of equilibrium. Capitalism is not just a gas -- it has this
peculiar control structure of money flows that enforce global
constraints locally.

> Labour values reflect a principle of equality based on the
> exchange of labour time between producers and as such are
> an expression of a commonsense petty producers view of production.
> Smith puts it forward dating from a time when the preponderance
> of production in Scotland was still by independent producers
> rather than modern capitalist industry. Here we get the transfer
> of the operational ideology of petty commodity producers into
> political economy ( the schoolmans theory of the just price
> obviously preceeded this and provided the route ).
> Ricardo both expresses the labour theory most rigorously but
> also is pulled by the antagonistic principle of equality based
> on equal rates of return to capital. This contradiction between
> two principles of equality lies at the heart of the crisis of
> the Ricardian school in the  19th century. The rigorous
> assertion of the principle of equality of labour value led
> to Ricardian socialism and Owenism.

I agree that the two major distributional rules of capitalism -- wages
for time worked and profit for capital invested -- generate these
differing ideas about economic value.

> Marx was, I think, mistaken to believe that one could within
> a single theoretical structure reconcile these two principles
> of equality. If, as Sraffa does one makes the capitalist principle
> of equality of return central, then labour value appears irrelevant.
> To the conciousness of the rentier, labour is irrelevant,
> capital is innately self expanding. The Neo -Ricardians do
> demonstrate that the two principles are irreconcilable.

I am at the stage where I do not yet accept this. Maybe I will be
forced to. But for the moment I am sticking with the hypothesis that
Marx was not mistaken, and that irrespective of the presence of equal
returns to captial invested, labour-value accounting can fully and
consistently account for prices of production. As I conceded, I think
it is conceivable that the meaning of 1$ can be over-determined, and
change according to the ebb and flow of the class struggle. But I
don't yet see a good reason to adopt this very counter-intuitive
conclusion, which probably has many consequences and implications that
are deleterious for objective value theory. That you draw these
conclusions from the N-R critique reinforces its importance in my


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