[OPE-L:7472] [OPE-L:1007] Re: Re: Marx's Concept of Prices of Production

Fred B. Moseley (fmoseley@mtholyoke.edu)
Mon, 31 May 1999 13:05:36 -0400 (EDT)

Thanks to John for his latest comments on Marx's concept of prices of
production. I want to focus this post on just one aspect of our
discussion - whether or not Andrew and Ted's definition of prices of
production is a correct interpretation of Marx's concept.

I have argued that one of the key characteristics of Marx's prices of
production is that they change if and only if productivity or the real
wage changes (the 4th characteristic in my list). There seems to be
general agreement on this point, including by John. I have also argued
that Andrew and Ted's "prices of production" change every period, even
when productivity and the real wage are assumed to remain constant.
Therefore, their interpretation must be a misinterpretation of Marx's
concept of price of production.

John replied:

I do not see Ted and Andrew's bit as a denial of the 4th characteristic
you identified. The real question here is what causes Ted and Andrew's
prices to change from period to period. Clearly, if unit input prices
were always equal to unit output prices, then their results would be the
same as yours. But what gives rise to the difference between input prices
and output prices? Implicit in that difference are changes in
productivity or the real wage. Hence prices of production are changing
for reasons with which Marx and you would agree.

My response:

John, I think you are misunderstanding Andrew and Ted's interpretation.
In their published articles on the transformation problem (the original
Capital and Class article and the later article in Marx and
Non-Equilibrium Economics), they clearly and explicitly assume that
technology and the real wage remain constant. Their numerical examples
explicitly assume constant productivity and a constant real wage. The
same quantities of inputs are consumed each period, the same quantity of
labor is employed (with the same real wage), and the same quantities of
outputs are produced, period after period. They assume "simple
reproduction" of the same quantities of inputs and outputs, period after
period. For example, in their original article (p. 74), they state:

The first circuit of money capital is now completed. For simple
reproduction to occur, each department must replace the precise
quantities of the specific use-values which have been used up
in this period.

And yet their "prices of production" nonetheless continue to change from
period to period, even though productivity and the real wage remain
constant. Their "prices of production" change because their input prices
are not equal to their output prices. This implies that input prices in
the next period must be different from the input prices in the preceeding
period; hence output prices in the next period must also change in order
to equalize rates of profit. Input prices are unequal to output prices by
their assumption, not because productivity and the real wage are
implicitly changing. To the contrary, productivity and the real wage are
explicity held constant.

Please look again at their articles; this is what you will find. I hope
you will agree that there is nothing like this in Marx.

I look forward to further discussion.