Subject: [OPE-L:1730] "Welcome Aboard, Fred!"?
From: Andrew_Kliman (Andrew_Kliman@email.msn.com)
Date: Tue Nov 23 1999 - 18:55:05 EST
Thanks to Fred for his reply (1729) to my OPE-L 1698.
I had written: "But this is NOT what is meant by the 'price of
cotton as input [... is] equal to the price of cotton as output.'"
Fred objects: "But wait a minute, Andrew: This IS PRECISELY what
I mean by 'the price of cotton as input is equal to the price of
cotton as output'. ... How can you say this is not what I mean?
... Andrew continues with his own interpretation of what I mean by
the equality of intput prices and output prices."
Whoa; check again. I said nothing about what you mean. I was
discussing what the phrase itself means, what is commonly meant by
it.
On to the substantive issue. I had written: "Cotton
was harvested last month, and won't be harvested for another year.
So its price as an output was its price last month, say 10. If
some of this cotton enters production of yarn today, then, ceteris
paribus (i.e., excluding stuff like changes caused by speculation,
dumping of cotton stocks on the market, etc.), its price is still
10, so 10 is the sum of value transferred to the yarn produced
today (and by "reaction," to all pre-existing stocks of yarn)."
This exemplifies the TSS interpretation of Marx's value theory.
The value transferred to the yarn produced today depends on the
price of the cotton when it "enters production."
Now, surprisingly, Fred AGREES with me about this!!!!!! He
writes: "the value transferred to the pre-existing stock of yarn
will be = 10, even though the price of the cotton consumed in the
yarn may have been = 5 when this cotton first entered production."
Quite right. And, I add, "... even though the price of cotton may
be = 15 when the yarn produced today is completed." Do you see
that this is implied in what you wrote, Fred? Do you still agree
with it? Is it premature to say "Welcome Aboard, Fred!"?
Fred then asks, "if there is no further change in the price of the
cotton before this batch of yarn is sold, then the price of the
cotton as input will continue to be = 10, up until the time the
yarn is sold, right? And when the yarn is sold, then the price of
cotton as input (10) will be equal to the price of cotton as
output (10), right?"
I can't say if this is right or wrong, because "input" and
"output" are being used in a way that's different from how it has
been used in this struggle from at least 1906-07 onward. So let
me try some neutral language:
I agree that, at any moment, an item's sales price equals its
purchase price. And I agree that Marx generally works under the
assumption of a social price, "the law of one price." At a given
moment, all units of a commodity have the same price whether
they've just emerged as outputs, just entered production as
inputs, are just sitting around, or are being consumed
unproductively, etc.
So what else is new?
No proponent of the TSS interpretation of Marx's value theory
has ever disagreed with this. We have been especially vigilant
in upholding the idea that an item can have only one value at
any moment, whereas according to simultaneism, it has two --
one as an output of one period, and another as the input of
the next period.
Fred: "Because the given constant capital is assumed to change to
reflect the current price of the means of production, when the
output of a given circuit of capital is finally sold, the price of
the means of production as inputs will be equal to the price of
the means of production as outputs."
This can be taken in three different ways (at least).
First, given the *common* meaning of "inputs" and "outputs," it
would mean something like this. Corn is produced and sold today.
The price for which it is sold is the same as the price of the
corn input used to produce it. This is not true in general. I'd
like to know whether Fred agrees or disagrees.
Second, it could mean that, in Marx's theory, the price for which
the corn produced today is sold determines the value transferred
to it from the corn that was used to produce it. I think that is
false. I'd like to know whether Fred agrees or disagrees. If one
affirms this second proposition, prices must then be understood as
being determined simultaneously, everything reduces to physical
input-output relations, and all the anti-Marx results follow.
Third, it could mean that the price of the corn that is produced
and sold today will be the same, today, as the price of corn
entering production today. This is true, given the "law of one
price." I'm sure Fred agrees with it.
Fred appears to have meant the last of these by his statement. If
so, we agree. However, this doesn't take us very far. It doesn't
address the issue of how prices, equal to values in the aggregate,
are *determined.* Not at all. Imagine a case in which all prices
= values. Then the price of corn = the value of corn. We agree
that the corn that enters production today is assumed by Marx to
have the same price as the corn that is produced and sold today.
Fine. What, however, IS this price? Well, it is the corn's
value. Fine. So what IS its value? How is the commodity's value
DETERMINED?
You can't answer that the value is the value added by living labor
plus the "given" value transferred from the corn used as input.
When something is taken as given, the process of its determination
is left unexplained. It is left *undetermined*. With one part of
the commodity's value left undetermined, the commodity's value as
a whole is left *undetermined*. Let me repeat:
When something is taken as given, the process of its determination
is left unexplained. It is left *undetermined*. With one part of
the commodity's value left undetermined, the commodity's value as
a whole is left *undetermined*.
I know of only two answers that are actually answers, answers that
actually address how commodity value is determined. One is the
simultaneist answer: the price = value for which the corn
produced today is sold determines the value transferred to it from
the corn that was used to produce it. Values must then be
understood as being determined simultaneously, everything reduces
to physical input-output relations, and all the anti-Marx results
follow.
The only other answer yet given is Marx's: the price = value of
the corn produced and sold today is the sum of the value added by
living labor plus the price that the corn used to produce it had
when it entered production.
Since there are only two actual answers out there, and Fred
steadfastly affirms that he rejects the simultaneist answer, may I
say "Welcome Aboard, Fred!"?
Ciao
A2K
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