[lbo-talk] Marxology question

Shane Mage shmage at pipeline.com
Sun Aug 10 12:50:31 PDT 2008


On Aug 10, 2008, at 12:40 PM, andie nachgeborenen wrote:


> Short version: price is proportional to value over the long term.

In the long term the dynamics of a capitalist economy (especially technological progress) keeps both value and price of even a "standard" commodity changing without ever approaching a stable proportion, especially since the credit mechanism ensures that the ratio of value to price (the labor-content of the monetary unit) decreases monotonically. Abstracting from dynamism and sticking to a static-equilibrium model is even worse, since price will tend to approximate price of production (Marshallian long-run average cost) and not value.


> Meaning: it's not that there's a function that converts prices into
> values mechanically, but over the long term prices fluctuate around
> value. In modern statistical terms, value explains (in the
> statistical sense) some significant variance in and level of
> pricing. That's a standard way of stating it that also show why
> there is a transformation problem.

This is a vulgar-economics illusion. Marx nowhere argues for such a relationship (he formulated no "price theory," and he made clear, in brief asides, that if he had it would have been a marginalist one on the model of differential rent theory). Therefore there is absolutely no "transformation problem" in that sense. The Marxian sense of "transformation" is that the the sum of prices (the GDP) is equal to the sum of values corrected for the perpetual inflation of the monetary unit relative to its labor-time content, and that can easily be proven.

Shane Mage

"Thunderbolt steers all things...it consents and does not consent to be called Zeus."

Herakleitos of Ephesos



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