From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sat Mar 24 2007 - 13:01:26 EDT
>Quoting Rakesh Bhandari <bhandari@BERKELEY.EDU>: > >>Fred, >>You take M as given. But--to ask a question I asked four or five >>years ago--how do we know that the market prices of the constant >>capital and wage goods bought directly and indirectly with that >>initial M were governed by or indeed could have been governed by the >>same prices of productions that you derive via your sequential, >>"monetary-macro" method predicated on the labor theory of value? > >Because the M that is taken as given is equal to the long-run >center-of-gravity prices of the means of production and means of >subsistence, and these long-run center-of-gravity prices are eventually >explained as equal to prices of production. But as I argued four or so years ago you are just asserting--not demonstrating or proving--that the prices of production of the mop and mos bought with the initial M had to have been the same as the prices of production which you derive with your sequential monetary macro method predicated on the LTV. Simply put, there is a difference between assertion and demonstration. Also, Marx thought in the long run there would be a tendency to equalize profit rates across sectors, not that there would ever be a period in which input and output prices would be the same or the outputs would be the qualitatively same goods as the inputs. Technological dynamism, including product innovation, are obviously key features, so there is no real existence to the Marshallian and modern neo classical category of long run center of gravity prices. That concept is different from Ricardo's or Marx's concept of long run price, which assumes only that prices will tend to equalize profit rates not become stationary. Carchedi does not assert or think that the prices of production he derives via his sequential method are likely to be the same as those which governed the prices of the mop and mos bought with the initital M. For Marx a central contradiction is that society must engage in self constraining production and reproduce itself thereby while capitalists are each trying to appropriate maximum profit from society. The latter leads to an unintended tendency towards the equalization of the profit rate and pushes prices away from value but the law of value still regulates the average rate of profit; moreover, differential rates of labor productivity growth are still the most important determinant of changes in exchange ratios over time. But for the contradiction between value and price of production Marx is blamed rather than private profiteering which in fact does not allow those trapped in its logic to see the ultimate determinant of economic magnitudes in value. Bourgeois understanding is sadly common sensical. It will only be in situations of objective crisis that the critique of political economy will have a chance of breaking the strangling hold of common sense, the theology of everyday economic life. Rakesh >Comradely, >Fred > >---------------------------------------------------------------- >This message was sent using IMP, the Internet Messaging Program.
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