The Empirical Strength of the Labour Theory of Value
The purpose of this chapter is to explore the theoretical and empirical properties of what Ricardo and Smith called natural prices, and what Marx called prices of production. Classical and Marxian theories of competition argue two things about such prices. First, that the mobility of capital between sectors will ensure that they will act as centres of gravity of actual market prices, over some time period that may be specific to each sector (Marx, 1972, pp. 174–5; Shaikh, 1984, pp. 48–9). Second, that these regulating prices are themselves dominated by the underlying structure of production, as summarized in the quantities of total (direct and indirect) labour time involved in the production of the corresponding commodities. It is this double relation, in which prices of production act as the mediating link between market prices and labour values, that we will analyze here.
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