[OPE-L] New article at artefact

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Fri Feb 24 2006 - 18:03:28 EST

Oh, just a small correction. I wrote:

"In fact, Marx does say in chapter 9 of Cap. Vol. 3 that you have to bear in
mind that input prices and input values can deviate from each other, and
that there it is therefore possible to "go wrong" in the calculation. But he
thinks it is not a very important problem, because when inputs are bought
and withdrawn from the market for use in production, that is that, their
prices, having being paid, can no longer change, all that can change is the
yield on capital invested from sales of new output."

I should say, "because when inputs are bought
and withdrawn from the market for use in production, that is that, their
purchase prices can normally no longer change". One should distinguish
between purchase and payment here (especially of course if inputs are
bought on credit and paid off from output sales).

The exact quote from Marx, often cited (because according to the TP
literature that gives the game away, as it were),  is as follows:

"The foregoing statements have at any rate modified the original assumption
concerning the determination of the cost-price of commodities. We had
originally assumed that the cost-price of a commodity equalled the value of
the commodities consumed in its production. But for the buyer the price of
production of a specific commodity is its cost-price, and may thus pass as
cost-price into the prices of other commodities. Since the price of
production may differ from the value of a commodity, it follows that the
cost-price of a commodity containing this price of production of another
commodity may also stand above or below that portion of its total value
derived from the value of the means of production consumed by it. It is
necessary to remember this modified significance of the cost-price, and to
bear in mind that there is always the possibility of an error if the
cost-price of a commodity in any particular sphere is identified with the
value of the means of production consumed by it. Our present analysis does
not necessitate a closer examination of this point. It remains true,
nevertheless, that the cost-price of a commodity is always smaller than its
value. For no matter how much the cost-price of a commodity may differ from
the value of the means of production consumed by it, this past mistake is
immaterial to the capitalist. The cost-price of a particular [purchased]
commodity is a definite condition which is given, and independent of the
production of our capitalist, while the result of his production [i.e. the
new output] is a commodity containing surplus-value, therefore an excess of
value over and above its cost-price."

Rakesh is thus correct, insofar as Marx then argues explicitly that "for the
total social capital" in his numerical example, the aggregate production
price is equal the corresponding aggregate value produced. However, I think
it's rather obvious that, in the real world, the two could diverge within an
interval of time, and Marx suggests as much himself, in the above passage.
Reality is a little messier than a neat-and-tidy accounting consolidation or
arithmetic aggregation, and Marx also rejected the idea that value was
simply a price average. Typically Marx does distinguish clearly between the
value of products, corresponding to quantities of current SNLT, and the
prices realised for those products (Cap. 1, chapter 3), and argues that:

"The possibility, therefore, of quantitative incongruity between price and
magnitude of value, or the deviation of the former from the latter, is
inherent in the price-form itself. This is no defect, but, on the contrary,
admirably adapts the price-form to a mode of production whose inherent laws
impose themselves only as the mean of apparently lawless irregularities that
compensate one another. The price-form, however, is not only compatible with
the possibility of a quantitative incongruity between magnitude of value and
price, i.e., between the former and its expression in money, but it may also
conceal a qualitative inconsistency, so much so, that, although money is
nothing but the value-form of commodities, price ceases altogether to
express value. Objects that in themselves are no commodities, such as
conscience, honour, &c., are capable of being offered for sale by their
holders, and of thus acquiring, through their price, the form of
commodities. Hence an object may have a price without having value."

If e.g. annual gross product (new reproducible goods & services supplied or
stocked by producers) is estimated at $12 trillion, the suggestion is that
this aggregate (ideal) price would buy, or is equivalent to the value of,
that product. However, we should remember that this valuation always refers
conceptually to the monetary value of total outputs classified as
"production" at producer's sale prices, which might deviate from the Marxian
value, since e.g. if an output is sold above or below its value, it is
logically not necessarily the case that other outputs are sold above or
below value in magnitudes such that the price divergences occurring would
cancel each other out, yielding an aggregate output price equivalent to
aggregate value. (If, as proximate illustration, we would calculate total
hours worked by different countries and compare them with gross product
measures converted to a standard currency, I think we'd obtain some
surprising findings).


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