From: rakeshb@stanford.edu
Date: Thu Jan 23 2003 - 13:23:41 EST
Paul A wrote: > My starting point is the Grundrisse: > "As soon as labour in the direct form has ceased to be the great > well-spring on wealth, labour time ceases and must cease to be its > measure, and hence exchange value [must cease to be the measure] of > use value." (705) Ajit Sinha, sometimes OPE-L contributor, argues that Marx had to use the LTV to determine or render determinate prices of production only because he did not understand that with the use of simultaneous equations prices could be solved on the basis of technical conditions as long as distribution was exogeneously determined. That is, the LTV is not so much a historical anachronism but an analytical anachronism. > That is: Science becomes increasingly central to productivity > improvement, but that makes the market system of coordination > increasing ineffectual. > > My hunch is that because of the public-goods nature of knowledge, the > > pricing of knowledge intensive goods/services/assets cannot be > determined "economically" (classically, by socially-necessary labor > time requirements, or even neoclassically, by supply and demand) -- > because these requirements are essentially indeterminate. One interesting aspect here is the intl division of labor. As James Galbraith points out, the advanced countries tend to export knowledge intensive capital goods such as aeroplanes, medical equipment, speciality chips, software and import non R&D intensive goods such as clothes, toys, shoes, non speciality steel. Galbraith argues that the knowledge-intensive capital goods industry is marked by a lottery like competition for transient Schumpeterian monopoly profits. He makes this argument on the basis of the supply and demand schedules he specifies for these kind of goods, but I don't have my books with me--his most important piece on this in Phil Arestis The Relevance of Keynesian Economic Policy Today. He also argues that to the extent that the industrial profile of the advanced economies become more weighted with knowledge intensive capital goods, they are more likely to be subject to violent cycles. Paul, thank you very much for an extremely stimulating post. Yours, Rakesh
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