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Mike:
I don't if you're in the minority or not, but when you state that "crises
occur when prices diverge too much from values" you are arguing an
empirical issue. One that can be measured. However, you statement that "no
precise formula for determining when the breaking point occurs" is a
theoretic issue. Conceivably, some type of empirical exercise --
simulation, regression, descriptive statistics, callibrating a theoretical
model, economic experiment -- might be quite useful in resolving the issue.
I would only disagree with you if you that (as others have said) that one
cannot in principle measure values or prices of production.
peace, patrick
At 05:25 PM 5/24/00 -0700, you wrote:
>I realize that I am in the minority here. I tried to address how I
>approach the problems that Allin describes in some of the works I
>mentioned earlier. I believe that crises occur when prices diverge too
>much from values, although there is no precise formula for determining
>when the breaking point occurs.
>
>Allin Cottrell wrote:
>
>> I agree with Patrick. Anything worth measuring (particularly in
>> the social sciences) is likely to be attended by a host of
>> measurement problems, both conceptual and technical, but that is
>> not sufficient reason to say: It's impossible.
>>
>> When we're talking about value, there are two distinct skeptical
>> lines. One emphasizes practical problems (e.g. Michael P.).
>> Fair enough, but see above. The other is more radical, and says
>> that the "quantity" at issue cannot be measured /in principle/.
>> I don't think everyone has realized just how strong a
>> self-denying ordinance the latter view is. If you take that
>> view, you can't talk coherently about price-value divergences
>> (so that, for instance, the "transformation problem" is solved
>> by fiat, without the need for any of the apparatus that people
>> from von Bortkiewicz to Farjoun and Machover, to Andrew Kliman,
>> have thought necessary to figure it out). You throw out
>> altogether all the "classical" (Smith/Ricardo/Marx) stuff about
>> gravitation of prices to values. Your value theory is then
>> purely a matter of qualitative analysis of "forms". I suspect
>> Michael W. may be comfortable with this, but that some others
>> haven't seen the full implications.
>>
>> Allin.
>
>--
>Michael Perelman
>Economics Department
>California State University
>Chico, CA 95929
>
>Tel. 530-898-5321
>E-Mail michael@ecst.csuchico.edu
>
>
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