Subject: [OPE-L:1751] Re: Re: Re: value-form theories and the Uno-school?
From: Abelardo Mariña Flores (abmf@prodigy.net.mx)
Date: Fri Nov 26 1999 - 21:16:57 EST
This is a response to Paul Cockshott (OPE-L: 1725). I hope I make myself
clear. I'm eager to receive your comments (and everybody´s).
Paul Cockshott wrote:
>
> At 00:51 23/11/99 -0600, you wrote:
> >b) the persistence of differences in sectoral profit rates,
> >*independently of market price
> >fluctuations*, as a result of the intersectoral reallocation of abstract
> >labour due to
> >intrasectoral competition, which is simultaneous to the intersectoral
> >reallocation of
> >abstract labour due to general capitalist competition.
> Can you please explain what you mean here.
1. The notion of prices of production as *centers of gravity* around
which market prices
fluctuate implies the existence of differences in sectoral profit rates
associated to
market price fluctuations. Prices of production render the average rate
of profit to all
sectors; market prices which diverge from prices of production render
sectoral *market*
profit rates which are different from the average profit rate. In this
conceptual framework,
which goes back to Smith and Ricardo, differences in sectoral profit
rates are
"dependent of market price fluctuations".
2. The existence of more persistent inequalities of profit rates across
sectors -that is,
inequalities which are not compensated by the fluctuations of market
prices around
prices of production- has been widely acknowledged (firstly by Ricardo).
Partially, such
persistent inequalities are caused by factors -such as monopolies, state
intervention,
and differential "risks" across sectors- which are not the *object* of
the law of labour-value inasmuch as they do not refer to the direct
conditions of *production and
reproduction* of commodities. These inequalities are also "dependent" of
*market*
forces; in this case they are dependent, negatively, of the numerous
factors that
obstruct their *free* operation.
3. But the persistent inequalities of sectoral profit rates can also be
caused by the
normal conditions of production and reproduction of commodities and,
hence, can and
*have* to be explained by the law of labor-value. And this is where the
"Uno-school"
approach is, in my opinion, fruitful. The incorporation of *use-value*,
and with it
*demand*, as a co-determinant of the "center of gravity" of market
prices, together with
the sectoral conditions of production and with the general rate of
profit, implies
accepting that competition relations *within each sector* are one aspect
of the
conditions of production and *reproduction* of commodities (as Uno and
Itoh propose).
In this conceptual framework, the center of gravity of market prices is
not the price of
production, but the *market price of production*, which in general is
quantitatively
different from the price of production. This means that the *average*
compensation of
supply and demand fluctuations for each commodity, which is the
condition expressed
through the center of gravity of market prices, is not based on prices
of production, but
rather on market prices of production. In my opinion, the cause of this
situation is the
presence of *somewhat lasting* excessive productive capacity -relative
to social
needs- in some sectors and relative insufficient productive capacity in
other sectors.
4. The prevalence of conditions of free transferability of capital
across sectors, which
results from the general domination of the capitalist mode of
production, does not imply
that intersectoral capital transfers driven by sectoral differentials of
profit rates are
automatic. Even under free competition conditions, there exist
*technical* barriers,
determined by the conditions of production (different from monopolies,
state
intervention, etc.), to the departure of capital from sectors with
excessive productive
capacity (and, therefore, with a market price of production which
renders a sectoral profit
rate below the average rate), as well as for the entrance of capital
into sectors with
insufficient productive capacity (and with a market price of production
which renders a
sectoral profit rate above the average). As an example: fixed capital,
specially the one
invested in machinery and equipment, can not be withdrawn from a
particular productive
sphere until it has been depreciated, that is until its value has been
fully recovered
from circulation through the selling of produced commodities. And this
takes *time*: 7-
10 years, depending on the service lives of the components of fixed
capital. Therefore,
in spite of getting *on the average* a profit rate below the general
rate of profit,
enterprises will tend to continue operating for *some time* before they
are able, without
capital losses, to transfer their capitals to other sectors.
5. Surely, in the *long-run* disequilibria between productive capacities
and social
needs, as well as the differences in sectoral profit rates associated
with such
disequilibria, tend to disappear because technical barriers to free
intersectoral capital
emigration only last during limited time periods. This long-run is, in
my opinion, the
*time horizon* in which the concept of price of production as center of
gravity of market
prices is valid. Or, to say it in other words, the price of production
can be the center of
gravity of market prices *only* in the long run. In my opinion, the
category *market price
of production* refers to a time horizon in-between the *long-run*, in
which sectoral
disequilibria between productive capacities and social needs do not
exist, and the
*short-run*, in which divergences between supply and demand are adjusted
mainly
through market price fluctuations, changes in inventories and levels of
capacity
utilization.
6. In my opinion, the analytical importance of this *intermediate-run*
time horizon,
which expresses outrightly the anarchical character of capitalism,
should not be
overlooked, inasmuch as it delimits the *actual* conditions of
production and
reproduction of commodities, of the capitals that manufacture them, and
of social
capital. Practical decisions involving re-investment of profits and
capital transfers
across sectors are not taken on the basis of *short-run* oscillations of
sectoral market
profit rates (caused by fluctuations of market prices), which tend to
compensate. And
neither they are taken on the basis of an *indefinite long-run* in which
any impulse to
transfer capitals across sectors ceases to exist inasmuch as all
sectoral profit rates
tend to equalize. For enterprises to take the decision to withdraw their
capitals from one
productive sphere into another, the fluctuations of market prices should
render, on the
average and during a somewhat lasting period, a sectoral rate of profit
below the
general profit rate. Only when enterprises are convinced that the low
relative
profitability in the sector in which they operate is not a *short-run*
situation that sooner
or later will end, they will try to reallocate their capitals in other
productive spheres.
7. An important issue to remark is that, although the market price of
production
introduces *demand* in the determination of the center of gravity of
market prices, it can
be consistently explained by the law of labour-value and, moreover,
maintaining the
idea that the substance of value is abstract labour. If it is accepted
that the intersectoral
reallocation of abstract labour implied in the determination of prices
of production, due
to general capitalist competition, does not modify the total quantity of
value created by
abstract labour, the determination of market prices of production does
not modify that
total quantity either. The determination of market prices of production
just implies a
*second* type of intersectoral reallocation of abstract labour, due to
intrasectoral
competition, which expresses the disequilibria between productive
sectoral capacities
and specific social needs. Although the two types of intersectoral
reallocation of
abstract labour operate in opposite directions -the first one towards
the equalization and
the second one towards the differentiation of sectoral profit rates-,
they take place
simultaneously, as they are the result of different aspects of the
competition process,
which is unique.
8. Therefore, in my opinion, the category *market price of production*
does not deny the
validity of prices of production as long-run centers of gravity of
market prices. It just
introduces another analytical plane -the "intermediate-run"-, in which,
on the basis of
the long-run tendency for sectoral profit rates to equalize, and within
a disequilibrium
framework, the center of gravity of market prices is redefined. The
significance of this
"redefined" center of gravity would be that it expresses, in a more
appropriate manner,
the *actual* conditions of production and reproduction of commodities
and, therefore,
the way in which the center of gravity of market prices regulates the
reproduction of
capital.
Comradely,
Abelardo Marina-Flores
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