>
>I finally have some time to return to the discussion of Marx's concept of
>price of production, and in particular to respond to John's OPEL 939
>which was a response to my OPEL 938. Thanks very much to John for
>his constructive comments.
>
>In previous posts, I have argued (summarizing my Boston paper) that
>Marx's concept of price of production is a long-run equilibrium price, in
>the precise sense that it has the following four characteristics:
>
>1. RATES OF PROFIT ARE EQUAL ACROSS INDUSTRIES
> as a long-run tendency, not as an actual fact in every period
>
Fred what is your attitude as to whether or not this assumption is
empirically valid.
Allin and I have presented evidence that in the US and the UK there is
a systematic negative correlation between sectoral organic compositions
of capital and rates of profit. This is directly counter to the key
assumption above.
>In the 18th and 19th centuries, during which Smith and Ricardo and Marx
>were writing, the fundamental productivity of many industries remained
>more or less constant over longer periods of time. Therefore, the
>"long-run" in many industries was a longer period of time. I think this
>is how Marx (and Smith and Ricardo) conceived of prices of production (or
>"natural prices") - that they would change only slowly and that actual
>market prices would fluctuate much more rapidly around these relatively
>stable "centers of gravity"
Surely this can not be true. The 18th and early 19th centuries were when
the industrial revolution and with it the rapid increase in the productivity
of labour got under way. A large part of Capital I is devoted to just
this issue.
>
>In the 20th century, the pace of productivity change has probably increased
>in most industries, so that the "long-run" is now a shorter period of time
>in most industries.
>
I am by no means convinced that the long run rate of productivity growth
in the UK has been faster in the 20th than in the 19th century, but this
is an empirical matter which is ammenable to test. Do you have any
evidence for your view.