Alan wrote in OPE-L: 461 [951109];
> Thus once the
> price is fixed, by whatever means - for example, if even one good
> trades at that price - then *all* similar commodities take on that
> price whether or not they are sold. Thus when the automobile maker
> 'discovers' that the real price of a car is $20,000 and not $25,000
> (more accurately when the world discovers it) at that moment her/his
> entire stock of cars is repriced at that rate. S/he can't say to the
> accountants 'well, I let that one go for $20,000 but really they're
> still worth $25,000'. The question is thus whether a price is uniform,
> not whether it is realistic.
> The second point, which follows from the first, is that transfers of
> value are effected not by trade but by price movements. Once the
> price of a car falls, the price of all cars fall. Ditto if it rises. This is
> so regardless of whether the car actually sells. Transfers of value
> are therefore *not* a function of the volume of trade. They are a pure
> function of price changes.
I'm not quite sure what Alan thinks is at stake here, although I gather
his concern relates to changes in the cost of elements of constant
capital and the transformation issue. I do, however, have some problems
with the way that Alan has posed some issues above:
1) "Thus once the price is fixed, by whatever means - for example if even
one good trades at that price - then *all* similar commodities take on
that price whether or not they are sold" and "once the price of a car
falls, the price of all cars fall."
a) For a commodity to have value, it must have use value and exchange
value. What happens when a produced commodity does not sell? If it does
not sell, at any price, then it does not have a use value, an exchange
value, or value (and can not be said to be a commodity, even though it
had the potential to become so). From a social standpoint, the value
required to produce that product then becomes wasted. (Contra Alan's
statement that "this is so regardless of whether the car actually sells.").
b) In what sense can we talk about how the price of similar
commodities are *fixed*? Firstly, if commodities are similar, but not the
same (for example, if there is product differentiation), then price
changes in commodities produced by one capitalist do not necessarily mean
that *all* similar commodities will sell at the same price. Secondly, "if
even one good trades at that price", I do not see why *all* commodities
will sell at that price. The capitalist selling the commodity originally
at a low price may readjust the price upwards, for instance. To take an
extreme example: what happens if a capitalist sells some commodities at
an artificially low price to stimulate sales? Let's say an auto producer
sells the first car they produce for $1. Will that mean that all
producers will follow suit and that the first capitalist will maintain
that price? No. If Alan were right, then the price of *all* cars would
then become $1. If that were to happen, one could then go on to make the
case that: a) profits would be negative; b) cars would not continue to be
produced, and; c) workers "exploit" capitalists and should be paid a
*negative* wage. The problem here arises, I think, because Alan does not
distinguish between the the lowest *average* price for the same (*not* a
similar) commodity, and the lowest absolute price.
2) The issue I posed originally concerned, primarily, *when* exactly is a
good priced in oligopolistic markets. This is clearly not a Vol 1 kind of
question, but it is a question that Alan has not answered. In *practice*,
oligopolies have a *projected* price *before* any commodities have been
produced. Even after commodities have been produced, there is *no* way
that these capitalists can know, ex ante, what the price *will* become ex
post. Before a commodity has been marketed it is simply a *estimated*
price rather than an *actual* one. If what Alan was saying were correct,
then the formal possibility of crisis would not exist and we would live
in a Say's Law world. Since I know Alan does not believe this, I ask him
to clarify his views.
In OPE-L Solidarity,
Jerry