1 - Value and Distribution

Summary

Introduction

According to “Cambridge” or “neo-Ricardian” or “Sraffian” historiography, “the nature of [Marx's] approach required him to start from the postulation of a certain rate of exploitation or of surplus-value (or profit-wage ratio in Ricardo's terms); since this was prior to the formation of exchange-values or prices and was not derived from them. In other words, this needed to be expressed in terms of production, before bringing in circulation or exchange” Dobb 1973: 148). Similarly: “price-relations or exchange-values could only be arrived at after the principle affecting distribution of the total product had been postulated. The determinants of distribution … were sited in conditions of production (Ricardo's conditions of production of wage-goods; Marx's “social relations of production,” introduced from outside the market, or as it were from a socio-historical fundament to phenomena of exchange)” (169). In a more technical rendition by Medio prices are derived on the basis of a known general profit rate which is itself “a function of two basic features of the economy, namely a social factor, the rate of exploitation” – which implies the wage – “and a technical factor, the methods of production” specifically of so-called “basics” or commodities which are either means of production or wage goods entering into the production of all goods in the system (1972: 330–1, 340–1). Implied here is a very different conception of the economic process than that of “general-equilibrium” characterized by the interdependence of distribution and pricing (Dobb: 118–19).