Alejandro Ramos wrote:
>Dear Paul:
>
>
>This reminds me that some days ago I did want to ask you if
>your whole scenario with the Mathematics of Chaos could be
>applied to "the theory of production price" instead of the
>Tugan's "labor-values". So, we would have another version
>of the "centers of gravity"'s metaphor. I dont remember
>where (V.III, Ch. 10?), but Marx says that, "now" (at this
>stage of the presentation) production prices become the
>"centers of gravity" of market prices, instead of values.
>
>Could you explain more your above statement? Is it possible
>(or not) to conceive the "price of production" as such
>"generator"? Is "production price" one "second... order
>correction function"? Could "production price" be the
>"attractor" of market prices? Why would the statistical
>results using "Tugan's values" be better than that using
>"production prices"?
>
Paul :
One certainly can view production prices as an attractor
for market prices. Such statistical work as has been done
for real economies indicates that both values and production
prices are attractors of roughly equal strength. One could
reverse the order of presentation and say treat production
prices as the principle attractor and values as a second
order correction, but I prefer to consider values as the
principle attractor and production prices as a correction
factor. I feel that production price theory rests upon
what are, in a sense, derived categories - profits and
equal profit rates. These are logically deducible from
value relations, whereas the reverse deduction of value
relations from profit and equal profit rates is much
harder to do.
In practice there is little to chose from on a purely
statistical basis if one has to chose a predictor of
market prices. There appears to be little or no statistically
significant difference between the predictive power of the
two generators. One could probably construct a formula
that was a linear summation of production prices and
values which would do better than either.
The thing that one has to take into account in real
economies is that there appears to be a tendancy
for capitals of higher organic composition to have a
lower rate of profit. This is why one can not simply
take production prices as an adequate predictor.
The web page
http://www.cs.strath.ac.uk/Contrib/wpc/reports/
contains pointers to some empirical work that Allin
and I have done on the relative usefulness of values
and production prices in predicting market prices,
in particular the paper:
http://www.cs.strath.ac.uk/Contrib/wpc/reports/rr-167-94.ps.Z
presents evidence for the 2 attractor theory and summarises
some of Farjoun and Machover's arguments.
Paul Cockshott
wpc@cs.strath.ac.uk
http://www.cs.strath.ac.uk/CS/Biog/wpc/index.html