From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Wed Jun 28 2006 - 17:37:20 EDT
> Ajit writes: >By the way, Marx was in full agreement with Smith and >Ricardo on their notion of 'centre of gravitation', >which is nothing but market's equilibrating mechanism. Yes Marx certainly thought that prices would gravitate towards the point(s) where profit rates would be equalized across most branches. But the pull towards profit rate equalization is not a market equilibriating mechanism in the sense of pulling the economy over the long term to stationary state in which in the input and output prices would be equal. This is just reading today's ideological economics of counting equations and unknowns back into the classicals and Marx And the former wrote before the full effects of science-based technological innovation were understood. Marx had more than an inkling because of his reading of Ure and Babbage. Yet even Ricardo recognized: "alterations in the quantity of labour necessary to produce commodities are a DAILY occurence. Every improvement in machinery, in tools, in buildings, in raising the raw material saves labour, and enables us to produce the commodity to which the improvement is applied with more facility, and consequently its value alters." (principles, p. 36, Sraffa's ed; my emphasis). Rakesh
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