Paul C wrote:
> If this value that is added is not made manifest as a change in the price
> of the product relative to the raw materials then the whole marxian theory
> of profits is an absurdity. You can not have a theory of surplus value
> without a theory of relative prices.
Marx's analysis of value and surplus value was not intended to be a theory
of relative prices, IMHO. The concern with price determination is an
obsession of modern economists (although, one might also see it as a
continuation of the Ricardian identification of value with exchange
value).
Moreover, Marx only said that in the *aggregate* commodities would sell at
their value (and the sum of value=sum of prices of production & sum of
s=sum of profit). He did *not* say that the "value that is added is ...
made manifest in the price of the *product* ... (emphasis added, JL). In
fact, he repeatedly stated that individual commodities are sold on the
market at prices either above or below their value. He recognized that
individual commodity prices are subject to a number of contingent factors
including those related to supply and demand.
This is not to suggest that the study of individual price determination is
unimportant. If we are analyzing actual market structure, such questions
become important. Yet, that was manifestly not Marx's purpose in
developing his analysis of value and surplus value.
[See what you started, Alejandro!].
In OPE-L Solidarity,
Jerry