result, prices of production are median prices, setting upper and lower limits to pricing within spheres of production, between spheres of production, in the marketplace and, at large, across capitalist society. Specifically, price of production is“ the cost price plus average profit”[ 25 ], the average profit being the average earning that a capitalist can expect in return if this capitalist invests a specific sum of capital in a particular branch of production in order to sell a specific service and / or produce a specific product. Prices of production represent the normal average profit on capital invested in a specific branch of production and / or capitalist society, in general. All branches of production have prices of production as indicators of the rate of return on capital invested in producing and selling commodities and / or services within this or that specific branch of production. As Marx states,
The prices that arise when the average of different rates of profit is drawn from the different spheres of production, and this average is added to the cost prices of these different spheres of production are the prices of production … The rates of profit [ i. e. the rate of return in percentage on capital investment ] prevailing in the different branches of production are accordingly originally very different. These different rates of profit are balanced out by competition to give a general rate of profit which is the average of all these different rates. The profit that falls to a capital of given size according to this general rate of profit, whatever its organic composition might be, we call the average profit …[ that is ] its price of production.[ 26 ]
Ultimately, price of production is the rate of profit for a particular industry articulated in money added to the cost of production, it is the average profit expected on top of the production-cost plus the productioncost itself, within a sphere of production, pertaining to a given size of capital investment. Marx’ s economic model sets up prices of production in order to explain that despite market fluctuations in individual product prices, brought about by the capricious fluctuations of supply and demand, nevertheless, market prices have a fundamental stable median by which price and value coalesce and equal each other. Specifically, that over a long enough period of time, price and value are one and the same. In addition, Marx’ s economic model sets up prices of production in order to argue that the capitalist’ s insatiable drive to maximize profit, i. e. his or her search for surplus profit, inevitably drives all spheres of production towards general profit equalization across all spheres, which coalesce around a singular, societal, general price of production, and ultimately results in an ever diminishing rate of return on capital investments, i. e. a general falling rate of profit.
However, it is important to note, that these inevitable outcomes inherent in capitalism and eloquently outlined by Marx’ s rational economic model are predicated on the assumptions that value is solely scientifically quantifiable value, that value is a quantifiable finite sum, nothing more, that value in the end is synonymous with price, that functions not directly involved in production are unproductive. And finally, that the law of value is an autonomous independent mechanism regulating and regimenting capitalist processes, devoid of all negating influences on a long enough timeline etc. These basic assumptions permit Marx to construct a rational economic model that inevitably leads to specific evitable conclusions. Important conclusions, which articulate that on a long enough timeline the contradictions inherent within the capitalist mode of production will radicalize to such extremes as to result in capitalism’ s total collapse, i. e.“ the rapid breakdown of capitalist production”[ 27 ], ultimately, paving the way for“ an association of free men, working with the means of production held in common … as one single social labor force”[ 28 ]. Although, in agreement with Marx’ s notion that capitalism will collapse, or specifically, in my estimation, be downgraded to the outskirts of socio-economic production, consumption and distribution, this event will not transpire via massive capitalist convulsions as Marx pertains. Instead, this collapse will transpire through the manner of a thousand conscious paper-cuts, that