From: Pen-L Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Sun Apr 22 2007 - 10:08:54 EDT
Hi Rakesh, thanks for your latest messages. Sorry for my delay in responding. My oldest son had an ACL knee operation on Thursday. I think that I have been putting too much emphasis in recent posts on long-run center-of-gravity prices to mean that prices do not change over "long periods of time". I think this is true for many commodities (even today), and that it was even more true in Marx’s day, and that Marx thought that changes in long-run center-of-gravity prices (i.e. his prices of production) would not occur frequently for many commodities. However, a slow rate of change is not necessary for Marx’s concept of prices of production as long-run center-of-gravity prices. Long-run center-of-gravity prices are prices that are *determined by the fundamental determinants of the system* (the values of commodities), as opposed to the accidental determinants of supply and demand, and that change only if these fundamental determinants change. These fundamental determinants may change frequently for some commodities, perhaps even most commodities. But it is still true that long-run center-of-gravity prices are prices that change only if these fundamental determinants change. One the other hand, these fundamental determinants probably change less frequently for other commodities. There is probably a range of different rates of change of these fundamental determinants for different commodities. And these fundamental determinants generally change less frequently that the accidental determinants of supply and demand, which determine actual market prices, and which generally change every period for most commodities. Long-run center-of-gravity prices are usually more stable than market prices, and are the "centers" around which the continuously changing market prices fluctuate. Eatwell expresses a similar definition of the "long period" in an entry in the New Palgrave: " 'Long-period' does not mean a long period of time, but rather *determined by the fundamental forces of the system*". I think this definition applies to Marx’s prices of production. Comradely, Fred ---------------------------------------------------------------- This message was sent using IMP, the Internet Messaging Program.
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