Btw that would be wholly consistent with there being a transformation problem. Marginalist considerations determine real prices, but they bear some relation to values, some sort of proportionality, and specifying that relation is the T-problem.
I also think, and I don't think Shane would disagree, that Marx isn't that interested in formulated a price theory in the sense that the marginalists, Walrasian, and neoclassicals are. The objects of value theory are different: to explain how exploitation is possible, actual, and necessary, the formulate the underlying laws of motion of the capitalist economy in the long term, to provide a framework for a crisis theory (which Marx never definitively worked out).
However as I understand value theory, it does involve, incidentally, a price theory in the sense specified, that is, of showing how the long term movements of prices of commodities fluctuate around and tend to converge upon, because they are proportional in some way, to values. This is a commitment Marx got stuck with when he adopted value as his basic quantity in an economic world of visible prices, of course he was just following classical political economy, but the problem is there even if it's not important to his purposes, it's important to showing that the theory he's constructed can in fact serve his purposes because it doesn't involve a fatal disconnect, a posit of a quantity, value, that has no real world effects, since in the observable economic world what we see are prices.
Btw I certainly hope I didn't suggest that I was urging a static rather than a dynamic interpretation; I guess I thought saying that prices fluctuate around values and ceteris paribus converge converge on them (I should have added that) in the long run indicated a commitment to a dynamic reading. I am puzzled by the people who insist there is no transformation problem when all the people around Marx and Engels seems to have thought that there was, the 2d Int had prize for solving it (created, without protest from Engels, while Engels was still alive); Tugan-Baranowski's attack on Marx for failing to solve it was not treated by any 2 Int Marxist economist I know as a sort of gross and stupid mistake but as a real challenge; Marx himself somewhere -- I am away from my library just now -- notes that there's an issue; Paul Sweezey thought that was a problem that was solved by Bortkewiscz, pardon my butchered Polish, and he's hardly a vulgar economist.
Please note that my point here is interpretive, I am not trotting out an unsolved transformation problem as an objection to value theory, just trying to get Marx's views right, including the theoretical lacunae they leave him with. It's clear that if there is a transformation problem as I described it, B offered a real solution, how useful it it is given its assumptions is another issue.
Shane knows heaps more about thas I do, so I'd like his explanation about where I have gone astray in his opinion, addressing the points I bring up.
--- On Sun, 8/10/08, Shane Mage <shmage at pipeline.com> wrote:
> From: Shane Mage <shmage at pipeline.com>
> Subject: Re: [lbo-talk] Marxology question
> To: lbo-talk at lbo-talk.org
> Date: Sunday, August 10, 2008, 2:50 PM
> 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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