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 But he thinks it is not a very important problem, because when inputs are bought and withdrawn from the market for use in production, that is that, their prices, having being paid, can no longer change, all that can change is the yield on capital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 I should say, "because when inputs are bought and withdrawn from the market for use in production, that is that, their purchase prices can normally no longer change".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." http://www.marxists.org/archive/marx/works/1894-c3/ch09.htm 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." http://www.marxists.org/archive/marx/works/1867-c1/ch03.htm 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). Jurriaan
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