On Mar 11, 2011, at 5:26 PM, Joseph Green wrote:
Paul Cockshott wrote:
I think that the theory of prices of production, like the labour
theory of value has
to be put to the test. The test indicates that both are about
equally good at
predicting actual monetary value added.
"Price of Production" Is nothing but what Marshall called "Long Run
Average Cost" and it is entirely dependent on the assumption of
perfect competition. Marx, like Marshall, makes that assumption with
the clear realization that it does *not* apply to price-formation in
the "Real World," where monopoly effects and barriers to entry
dominate. It is simply an *abstraction* from the actual market
mechanisms, justified by the fact that the dynamics of capitalism as a
system are determined by profits and expected profitability, not by
market prices. To query whether "prices of production" (let alone
"labor-time values") can be used to "explain" market prices is a gross
misunderstanding of Marx (and even of Marshall!).
Shane Mage
"All things are an equal exchange for fire and fire for all things,
as goods are for gold and gold for goods."
Herakleitos of Ephesos, fr, 90
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