But I will try to stick in a few responses as time permits. I look forward
to seeing everybody in Boston and to more lengthy discussions there.
To begin with, a question for Alan: Alan argues that there is a great divide
between Marx and Ricardo on the issue of equilibrium and non-
equilibrium. Ricardo's theory (and just about all other economic
theories) is an equilibrium theory and Marx's theory is a non-equilibrium
theory.
I argue in my upcoming IWGVT paper that Marx's concept of PRICE OF
PRODUCTION is a long-run equilibrium concept in the precise sense
that:
1. Rates of profit are assumed to be equal across industries (as a
long-run tendency, not as an actual equality each period).
2. Supply and demand are assumed to be equal for all industries (again, as a
long-run tendency, not as an actual fact in any period).
3. Are long-run "center-of-gravity" prices, around which actual market
prices fluctuate from period to period due to demand and supply.
In my paper, I review all of Marx's writings on his concept of price of
production, and show that Marx consistently defined his concept of
price of production in this way.
I also argue that, in this respect, Marx's concept of price of production
is essentially the same as Ricardo's and Smith's concept of NATURAL
PRICE. Marx said this explicity in several passages and all the
manuscripts support this interpretation (please see my paper). There is
no great divide between Marx's concept of price of production and
Ricardo's concept of natural price. Both concepts are long-run
equilibrium prices in the above sense. This is especially clear in
Marx's long discussion of Ricardo's and Smith's concept of natural price
in Chapter 10 of Theories of Surplus-Value. Marx's critique of Smith
and Ricardo is that they were not able to explain the determination of
natural prices, not that they should have been explaining non-equilibrium
prices.
So, I ask Alan: in what precise sense do you think Marx's price of
production is NOT an equilibrium concept and Ricardo's natural price IS
an equilibrium concept? What condition or characteristic of equilibrium
is satisfied by Ricardo's natural price and not satisfied by Marx's price
of production? I have been trying to figure this out from your paper and
your posts, and I have some ideas, but am still not clear.
Thanks in advance for the clarification.
Fred