Greetings, all. I've been itching to join the quite interesting discussion between Fred and Gary re competing conceptions of "absolute" and "relative" prices in Marx and Sraffa (and re, more generally, the insights to be had from their alternative conceptions of capitalism). But as I'm coming late to the discussion, a lot of ground has already been covered and it's hard to decide where to enter the fray. So I'll begin with a single point and work outward from there, to the extent that others are interested in pursuing the thread. Fred suggests that Marx and Sraffa conceive of "absolute prices" in fundamentally different ways, on the grounds that, for Marx, absolute prices of commodities are expressed as "exchange-ratios of commodities with money" (thus measured, e.g., in units of gold per commodity), whereas for Sraffa, absolute prices are "pure numbers" and thus "not ratios of exchange with money" but instead "those values that are consistent with the reproduction of the system of physical inputs and outputs." I agree with Gary that there is less fundamental difference here than meets the eye--specifically, no difference that has any fundamental analytical implications. The fact that absolute prices are pure numbers in Sraffa can be seen as a simple corollary of the fact that, for the points that Sraffa wants to make (the relevance of which to Marx's account I'll discuss below), no purpose is served in specifying the money commodity. Doing the latter would simply add a layer of complexity without changing any of Sraffa's results. Thus one might invoke Occam's razor as the basis for Sraffa's not introducing this complication. But it seems clear to me Sraffa's specification is entirely consistent with the notion that commodity prices are interpreted as exchange ratios with money. Thus, the only way to make sense of Fred's claim that Sraffian "absolute prices are those values that are consistent with the reproduction of the system of physical inputs and outputs" is to imagine that these are prices that might conceivably be paid by actors in a competitive capitalist economy (i.e., an exchange economy in which profits and wages exist and the "law of one price" obtains for commodities and the rate of profit). If one doesn't imagine something like this, then Fred's phrase "consistent with the reproduction of..." has no evident meaning. And of course, such prices are denominated in terms of some money good, be it commodity or fiat. A corollary of this is that there is no essential difference between saying, with Marx, that the money commodity "has no price" (because nobody exchanges gold for gold), and treating the money commodity (implicitly) as a numeraire good. For the purpose of this discussion, these representations can be taken as synonymous. More later.... Gil
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