andie nachgeborenen wrote:
"Well, Marx's examples involve single commodities. I agree that Marx formulated no price theory, if he had, he would have had a solution to the transformation problem. I'd like a cite to the passages where Marx indicates he'd go marginalist if he had to create a price theory."
This isn't marginalism as such, but I was struck by the passages in Vol III that seem to anticipate Marshall on elasticity of demand, and show the role Marx thought demand played in determining price and therefore value (by determining how much of a certain commodity, and therefore the labour producing it, is 'socially necessary'):
"The definite social wants are very elastic and changing. Their fixedness is only apparent. If the means of subsistence were cheaper, or money-wages higher, the labourers would buy more of them, and a greater 'social need' would arise for them." [p. ?? - sorry didn't note the page here]
“It is evident however – even if this is mentioned only in passing, as we are still assuming here that commodities are sold at their values and are not yet concerned with the fluctuations in price that are brought about by competition – that the expansion or contraction of the market depends on the price of the individual commodity and stands in an inverse relationship to the rise or fall in this price. It happens in fact, therefore, that a rise in the price of raw material does not lead the price of the manufactured product to rise in the same proportion, or to fall in the same proportion when the price of the raw material falls.” [p. 204 of the Penguin edition]
"At a given price, a species of commodity can only take up a certain area of the market; this area remains the same through changes in price only if the higher price coincides with a smaller quantity of commodities and a lower price with a greater quantity. If the demand is so strong, however, that it does not contract when price is determined by the value of commodities produced in the worst conditions, then it is these that determine the market value." [p. 279]
Here you can almost see supply and demand curves. I would really like to know from people who know more about the history of economic thought how much this was in the air of political economy at the time, and whether Marx was innovating here. I think Marshall coined the term 'elasticity' (price and income) in this sense, but I imagine the ideas were already around. Anyone know?
Personally I'm partial to the so-called 'new interpretation' of value and price, associated with Duncan Foley and Gerard Dumenil, among others. It seems to do what you want Andie, vacating value (at least in as much as it is quantified) from the field of price theory but maintaining it at the macro-level as an expression of exploitation in monetary terms. Of course, if value leaves the field of price theory, marginalism is not the only alternative.
Cheers, Mike Beggs