I have argued that Andrew and Ted's interpretation of Marx's concept of
prices of production is a misinterpretation because Andrew and Ted's
prices of production change every period, even though productivity and the
real wage remain constant, whereas Marx's prices of production change if
and ONLY IF productivity or the real wage changes.
John's first defense of Andrew and Ted's interpretation was to argue that,
although Andrew and Ted's prices of production do not change as a result
of a change of productivity during the periods analyzed, they do change as
a "delayed effect" of a change of productivity prior to the periods
analyzed. I have argued that there is no textual evidence to support this
interpretation and that it contradicts Marx's logical method of first
determining prices of production and then analyzing the causes of changes
of prices of production. Nothing is said in this most recent post about
this first argument.
In this post, John presents a new defense of Andrew and Ted's
interpretation. The new defense is to argue that Marx's statements that
prices of production change if and only if productivity or the real wage
changes APPLY ONLY TO ONE PERIOD of time. These statements DO NOT APPLY
TO MORE THAN ONE PERIOD of time. The implication seems to be that, when
we consider more than one period of time, there is a THIRD CAUSE of
changes of prices of production: because input prices are not equal to
output prices, the equalization of profit rates in the next period
requires that prices of production change again in the next period, even
though productivity and real wages remain constant, as in Andrew and Ted's
interpretation.
MY REPLY
I do not think that this is a reasonable interpretation of Marx's concept
of prices of production, for the following reasons:
1. Marx never said anything remotely like this. In his discussions of
causes of changes of prices of production, Marx never once mentioned this
possible third cause. Marx never said anything like: "These are the two
causes of changes of prices of production WITHIN A GIVEN PERIOD, but OVER
MORE THAN ONE PERIOD, there is a THIRD CAUSE of changes of prices of
production: the inequality between input prices and output prices." This
third possible cause of changes of prices of production is completely
without any explicit textual support.
2. In several of Marx's discussions of causes of changes of prices of
production, Marx explicitly discussed changes OVER MORE THAN ONE PERIOD of
time. These passage make it clear that Marx's discussions of the causes
of changes of prices of production apply BOTH to changes within a given
period AND also to changes over several periods of time, not just to the
former.
3.1 In a discussion from Chapter 9 of Vol. 3, Marx stated:
For all the great changes that constantly occur in the actual
rates of profit in particular spheres of production (as we shall later
show), a genuine change in the general rate of profit, one not
simply brought about by exceptional economic events, is the
final outcome of a whole series of protracted oscillations, which
require a good deal of time before they are consolidated and
balanced out to produce a change in the general rate. In all
periods shorter than this, therefore, ... a change in prices
of production IS ALWAYS TO BE EXPLAINED prima facie by an actual
change in commodity values, i.e. by a change in the total sum of
labor-time needed to produce the commodities. (p. 213;
emphasis added)
Nothing is said here about this statement only applying to one period of
time. Indeed, the discussion is about a fairly long time horizon. Marx
does not explicitly identify periods, but "a good deal of time" seems to
imply more than one period. During this "good deal of time," a change
of prices of production IS ALWAYS TO BE EXPLAINED by changes in
productivity. After this "good deal of time", changes of prices of
production are also changed by changes in the rate of profit, in
addition to changes of productivity in the production of the given
commodity. But never in this discussion of changes of prices of
production over a fairly long time horizon did Marx say anything about a
possible third cause of these changes (because input prices are not equal
to output prices).
3.2 From a discussion from Chapter 10 of Vol. 3:
In whatever way prices [of production] are determined, the
following is the result:
(1) The law of value governs their MOVEMENT in so
far as reduction or increase in the labor-time needed for their
production makes the price of production rise or fall.
(p. 280; emphasis added)
It is not made explicit here, but the MOVEMENT in prices of production
would seem to be MOVEMENT OVER TIME. In any case, certainly nothing is
said in this Chapter 10 discussion about a distinction between changes of
prices of production within one period and changes of prices of production
over several periods, nor anything about input prices not equal to output
prices as a possible third cause of changes of prices of production.
3.3 From Chapter 50 of Vol. 3 ("Illusions Created by Competition"):
Market prices rise above these governing production prices
or fall below them, but these fluctuations balance each other
out. If one compiles price lists OVER A PROLONGED PERIOD,
and ignores those cases in which the actual value of a commodity
alters as a result of changes in labor productivity, as well as cases
in which the production process is disturbed by natural or
social disasters, it is surprising both how narrow the limits of
these divergences are and how regularly they are balanced out.
(p. 1000; emphasis added)
This analysis has to do with "a prolonged period" and yet the only cause
of a change of prices of production that is mentioned is a change of
productivity. Nothing is said about input prices not equal to output
prices as another possible cause of changes of prices of production over
this "prolonged period."
4. Therefore, I conclude that John's second defense of Andrew and Ted's
interpretation is no more successful than the first attempt. Andrew
and Ted's short-run equilibrium prices of production, that change every
period, even though productivity and the real wage remain constant, is a
misinterpretation of Marx's concept of prices of production, which are
long-run equilibrium prices that change if and ONLY if productivity or the
real wage changes.
Comradely,
Fred