[OPE-L:6450] Re: [OPE] What is prior? Response to Paul C

Alan Freeman (a.freeman@greenwich.ac.uk)
Fri, 10 Apr 1998 05:44:28 -0500

Jerry wrote

> Hmmm. Sorry, but I can't resist this.
>
> When you walk into the shop and see the cauliflowers on sale for $1 you
> don't know whether the store owner has set the price of $1 artificially
> high with the expectation that the bargaining process will drive the price
> down. In other words, you don't know whether s/he expects to sell the
> cauliflower for $1 , $0.50, $0.25 or anywhere in between.

Sure. which only tells us that the price changes constantly. Which is why
when recording any price we have to specify it as the price of a definite
moment in time. If the cauliflower is priced at $1 at 10am, then that's its
price at that time. If it sinks to $0.40 by 4pm, then that's its price at
that time.

If it's sold for $0.30, then that is its price at the time of sale.

This is exactly the way that, for example, commodity prices are recorded in
the commodity exchanges. That's what ticker tapes are for, except now they
do it with screens. At any time, check the screen, and you see a list of
prices. These are the prices of that moment.

> Do you remember the scene where Humphrey Bogart was bargaining for the
> piece of cloth in "Casablanca"? What was its "real" price(s)? What was
> its monetary value prior to sale? $1.00? ... $0.75? ...$0.50? Is there
> any way of knowing this *before* there is a market transaction?
>
> In solidarity, Jerry

Alan replies:

Yes, indeed there is. At least, for my way of looking at things.

Suppose eg that the raw materials in the cloth cost $0.20. Suppose moreover
that the MEL is $30 per hour. Suppose that making the cloth takes 1 minute.
In that case, the living labour adds (1/60)*$30 = $0.50 and the value of
the cloth is $0.70.

Simple, when you know how.

Alan