From: Michael Perelman (michael@ECST.CSUCHICO.EDU)
Date: Wed Feb 08 2006 - 20:07:04 EST
I examined the subject in my book on Marx's Crises Theories in the chapter on fictitious capital. On Wed, Feb 08, 2006 at 03:55:21PM -0500, Jerry Levy wrote: > 1. Bubbles occur where "asset prices [are] unrelated to underlying > values." For instance, a "house price bubble can be defined > simply as a deviation of the market price from the fundamental value > of the house." Bubbles often arise "when speculation in a commodity > or asset class causes the price to increase, thus producing more > speculation." > > 2. As we all know, there is disagreement among Marxians with regard > to our understanding of value (understatement). One area of contention > is whether it is meaningful to refer to *price-value divergences*: there are > those (including Marx) who refer to individual prices rising above or falling > below values and there are those who claim essentially that there is an > identity between value and price. For instance, surplus approach theory > might suggest that a dual accounting of price and value is "redundant"; > value-form theory claims the money price is the sole autonomous > representation of value. This leads me to my ... > > -------------------------------------------------------------------------------------------------- > > *QUESTION* : how do those Marxian perspectives which don't > allow for price-value divergences explain the existence of bubbles? > > -------------------------------------------------------------------------------------------------- > > Background: > I sat next to Gary this afternoon at a workshop given by Ed Nell > and Davide Gualerzi at the New School and the topic of bubbles > came up in their presentation on "Transformational Growth in the > 1990s." This got me to thinking about the above and I asked Gary > afterwards if there was any literature from a surplus approach > perspective on bubbles. He couldn't think of anything off-hand but > did mention John Eatwell. I thought this was an odd reference > because -- last I heard -- John had long since stopped being a > surplus approach theorist. Am I mistaken about that Gary? > > I _almost_ asked Ed and Davide what theory of value they were > (implicitly) using to explain bubbles since the definition that they > gave obviously presumed _some_ theory of "underlying value". > I was thinking of asking them ... > > ------------------------------------------------------------------------------------------------ > > *What is the _theoretical_ explanation for bubbles?* > > ------------------------------------------------------------------------------------------------ > > In solidarity, Jerry > > -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
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