On Wed, 06 Dec 2000, you wrote: > You're right, in that fiat money is not a produced commodity and > doesn't participate in any equalization of the rate of profit, > unlike Marx's commodity money. > > Allin Cottrell. That is my basic feeling and my response to Steadmans critique of empirical measures of price/value correspondance where he claims that these measures are heavily dependent on the numeraire. However I have been wondering if the use of fiat money as unit of account in the transformation processes might not be equivalent to the use of a weighted average of all commodities as unit of account, and in that sense similar to the use of the basic commodity. If one puts in the stipulation that the total price of the social product is invariant under the transformation procedure, one is implicitly equating the dollar to some fraction of the total national income. The dollar then becomes a surrogate for a bundle of commodities. Now it it important to recognise that the transformation is not a real temporal process but a pair of comparative counter-factuals, one in which rates of surplus value equalise completely, the other in which profit rates equalise completely. I see no reason why one should not adopt an arbitrary normalisation procedure for these two counterfactuals and scale the output vector measured in the two different set of prices to 1. This has the advantage of focussing on what is important: the exchange ratios of commodities and the ratios of profit to employed means of production, profit to wages. What Rakesh is proposing with his opposition to an adding up theory of prices is essentially a normalisation procedure of this sort. -- Paul Cockshott, University of Glasgow, Glasgow, Scotland 0141 330 3125 mobile:07946 476966 paul@cockshott.com http://www.dcs.gla.ac.uk/people/personal/wpc/ http://www.dcs.gla.ac.uk/~wpc/reports/index.html
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