This is a belated and incomplete response to a post Andrew's several weeks
ago (I have lost track of the number) concerning whether or not my
interpretation of Marx's theory of prices of production leads to the same
quantitative results as the Sraffian interpretation, because I assume that
input prices are equal to output prices (in long-run equilibrium).
I have argued that the quantitative results (rate of profit and prices of
production) of my interpretation are different from the results of the
Sraffian interpretation because Marx's logical method of determining the
rate of profit and prices is fundamentally different from the Sraffian
logical method (the method of linear production theory). I have also
argued, responding to Andrew's arguments, that even though the Marxian
results are different from the Sraffian results, the Marxian results can
still satisfy a equation that looks like the Sraffian equation for the
determination of the rate of profit and prices: p = (pA + pBL)(1 + R).
Therefore, Andrew's argument that there can be only ONE rate of profit and
set of prices that satisfies this equation, and therefore that the Marxian
results must be equal to the Sraffian results, is not correct. Andrew's
argument assumes the Sraffian method of determination of prices and the rate
of profit and does not apply to the Marxian method of determination.
In his most recent post, Andrew acknowledgesd that, in the case of FIXED
CAPITAL, my interpretation leads to different results for prices and the
rate of profit than the Sraffian interpretation. This is a significant
point of agreement, since the case of fixed capital is clearly more relevant
to the analysis of real capitalist economies than the case of circulating
capital only (which assumes no fixed capital). Most of Marx's own examples
in Chapter 9 of Vol. 3 assumed fixed capital.
However, Andrew argued further that, in the case of circulating capital, my
interpretation still leads to the same quantitative results as the Sraffian
interpretation. I continue to disagree on this point as well. I continue
to think that Andrew's argument illegitimately substitutes the Sraffian
method of determination of the rate of profit and prices of production for
the Marxian method of determination. I have been trying to think of new
arguments and numerical examples, but I haven't had much time and so far
have not been successful. I will also not have much time in the next six
weeks or so. But I will certainly continue to think about this issue and I
look forward to rejoining the discussion in the Fall. As I have said
before, if Andrew's argument is correct, then no other theory of the rate of
profit is possible, except the Sraffian theory, as long as it is assumed
that input prices are equal to output prices. This would certainly narrow
the range of options.
I have very much appreciated Andrew's comments and, even though I continue
to disagree, I have certainly been stimulated by them and have learned a
lot. I hope that we have not bored our comrades too much and that more of
you will participate in the discussion in the future.
Comradely,
Fred