[OPE] Marx on "natural prices" in classical political economy

"As you know, A. Smith sees the 'Natural' or 'Necessary price' as being
composed of wages, profit (interest) and rent - i.e. as wholly resolved into
revenue. This nonsense has been taken over by Ricardo, although he excludes
rent from the catalogue as being purely fortuitous. Nearly all economists
have taken this over from Smith, and those who contest it succumb to some
other folly.

Smith himself is conscious of the nonsensicality of subsuming the gross
product of a society simply under revenue (which may be consumed annually),
whereas in the case of each individual branch of production he resolves
price into capital (raw materials, machinery, etc.) and revenue (wages,
profit, rent). If this were so, a society would have to start each year de
novo, without capital."
http://www.marxists.org/archive/marx/works/1863/letters/63_07_06.htm

(In modern national accounts, a distinction is drawn between gross output
and net output - JB)

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Received on Mon Jan 31 01:42:22 2011