This is a partial response to several recent posts by Allin on the
"single-system" interpretation of Marx's theory. Thanks very much to Allin
for his comments.
I have argued in recent posts that: (1) Marx's discussions of the equality
of the value and the price of production of commodities produced with
capitals of average composition (in Chapters 9 and 12 of Volume 3) provide
clear evidence that the "cost price" is the SAME for BOTH the value of these
"average" commodities and the price of production of these "average"
commodities. This equality of the value and the price of production of
"average" commodities can be true IF AND ONLY IF the "cost price" is the
SAME for both the value and the price of production of these "average"
commodities. (2) I have argued further that this "cost price" that is the
same for both the value and the price of production of the "average
commodities" is equal to the PRICE OF PRODUCTION of the means of production
and the means of subsistence, not the values of these goods.
Allin has agreed with (1), but not with (2). Allin has argued that (1) does
not necessarily mean that the cost price must be equal to the price of
production of the means of production and the means of subsistence.
Instead, the cost price that is the same for both the value and the price
of production of the "average commodities" could be equal to the VALUE of
the means of production and the means of subsistence. He has argued that
this is what Marx was assuming in this statements about the equality of the
value and the price of production of "average" commodities, and that this
assumption was the first step of an "iterative" transformation of values
into prices of production.
I would like to suggest two arguments against this interpretation, and save
for a later post a response to other points made by Allin, which will
require a more general discussion.
1. In the Chapter 11 discussion of the effects of a change of wages on
prices of production (i.e. Ricardo's question), to which Allin has called
our attention, Marx emphasized again that the price of production of
"average" commodities are equal to their values and argued further that
neither the value or the price of production is affected by a change of
wages (and hence these two continue to be equal). Again, this equality of
the value and the price of production of "average commodities can be true if
and only if the "cost price" is the same for both the value and the price of
production of these "average" commodities.
Furthermore, in this chapter, Marx explicitly stated that the entire chapter
is based on the premise that prices of production HAVE ALREADY BEEN
DETERMINED. The only question is how prices of production are affected by a
change of wages. Marx's criticized Ricardo for analyzing only the second
question without first having answered the first question. The last
paragraph of Chapter 11 is as follows:
In this entire chapter, we have assumed that the establishment of a
general rate of profit, an average profit, and thus also the
transformation of values into prices of production, is a GIVEN FACT.
All that has been asked is how a general rise or fall of wages
affects the prices of production prices we have assumed to be GIVEN
IN ADVANCE.
This is a very secondary question, compared with the other important
points which have been dealt with in this Part. Yet it is the only
question Ricardo deals with which is relevant here, and as we shall
see he deals with it only in a one-sided and inadequate way.
(emphasis added)
Therefore, Marx's discussion of the equality of the value and the price of
production of "average" commodities in this chapter cannot be the first step
in the transformation of values into prices of production, as Allin argues.
Prices of production have already been fully determined. Which means that
the cost price, that is the same for the value and the price of production
of "average" commodities, must be equal to the PRICES OF PRODUCTION of the
means of production and the means of subsistence, as Alejandro and I have
argued, and cannot be equal to the value of these goods, as Allin argues.
Chapter 12, entitled "Supplementary Remarks", was also clearly based on the
assumption that prices of production have already been determined, although
Marx did not say so explicitly. Chapter 12 is the last chapter of Part 2,
after prices of production have been determined in Chapter 9. The title of
the chapter also suggests that the analysis of the determination of prices
of production has already been given and this chapter pulls together
additional remarks, one of which (Section 2) is about the equality of the
price of the production and the value of "average commoditiess". Section 1
is entitled "Causes of a Change in the Price of Production," which again
assumes that prices of production have already been determined. Section 3,
which is entitled "The Capitalist's Ground for Compensation," contrasts
Marx's explanation of prices of production - already given - with the view
of capitalists that prices of production makes it appear that all parts of
capital equally produce profit.
2. Furthermore, another look at Marx's discussions of "average" commodities
in Chapters 9 and 12 also makes it appear very doubtful that Marx could have
been assuming in these passages that the cost price of commodities was equal
to their values.
In Chapter 12, Marx first states that prices of production may diverge for
two reasons: because profit is not equal to surplus-value and because the
cost-price of commodities may also differ from the value of the means of
production and the means of subsistence. (I will return in a later post to
Allin's interpretation of this paragraph.) In the next paragraph, Marx
emphasized the second point - that the cost-price of commodities may differ
from the value of the means of production and the means of subsistence.
Then the next paragraph begins:
YET THIS POSSIBILITY (i.e the possibility that the cost-price of
commodities may differ from the value of the means of production and the
means of subsistence; FM) in no way affects the correctness of the
principles put forward for commodites of average composition.
Marx then went on to make the now familiar statement (with the familiar
equations) that the cost price of commodities is the same for both the value
and the price of production of these "average commodities". Therefore,
either Marx forgot three sentences later that he was considering the
possibility that the cost price of commodities may differ from the value of
the means of production and the means of subsistence, or - which it seems to
me much more likey - he was in fact assuming this divergence in the rest of
the paragraph, which states that the cost price of commodities is the same
for both the value and the price of production of these "average
commodities". In other words, he was assuming that the cost price was equal
to the price of production of the means of production and the means of
subsistence, not the values of these goods.
A reexamination of pp. 263-65 (Penguin) of Chapter 9 suggests a similar
interpretation. The basic explanation of the determination of prices of
production has already been given in the previous pages of this chapter.
Then Marx discussed the equality of the value and the price of production of
"average" commodities which assumes that the cost price is the same from
both the value and the price of production. Then in the very next
paragraph, Marx discussed the divergence of the cost price from the value of
the means of production and the means of subsistence.
Allin's interpretation suggests that, after determining prices of production
in the early pages of Chapter 9, Marx's "slipped back" into assuming the the
cost price of a commodity is equal to the value of the commodity consumed in
production in his discussion of "average" commodity, even though in the very
next paragraph, Marx emphasized the divergence of the cost price from the
value of the commodities consumed. It seems to me much more reasonable to
assume that in these paragraphs, Marx was reflecting on various implications
of his determination of prices of production (already given), and therefore
that he was assuming that prices of production had already been determined
in both his paragraph on "average commodities" and in the very next
paragraph on the divergence of the cost price of commodities from the values
of the commodities consumed in their production. In other words, he was
assuming that the cost price of the average commodity was equal to the price
of production of the commodities consumed.
As mentioned above, I hope to follow this post with a more general post in
the next few days which will place my interpretation of these passages from
Part 2 of Volume 3 in the context of my overall "single-system"
interpretation of the three volumes of Capital.
Comradely,
Fred