From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Wed Nov 19 2003 - 00:49:37 EST
--- Ian Wright <ian_paul_wright@HOTMAIL.COM> wrote: Ajit: I think you are compartmentalising things that are in causal interaction with each other. For example, I have a computer model of a simple commodity economy. The causal interaction between labour values and prices results in an efficient allocation of social labour time, at which point prices are proportional to labour values. Irrespective of whether this is a good or bad, relevant or irrelevant model for understanding real economies, it is nonetheless a real dynamical system, which can be an object of scientific study. ___________________ True! But the causal direction of your computer model is given by you. You have told your model that when one sector receives higher returns for their one-hour of labor than the other does some people from the other sector move from their sector to the higher labor-remuneration sector. So there is a causal impact on the supply of these commodities, which has impact on the prices. But in the real world, outside of the computer, this may not happen. People may not have the right information to behave that way. It may not be easy to move from one kind of work to another, so the inertia keeps them where they are and after some time differential labor remuneration becomes conventional. The point I'm trying to make is that once you let things move on historical time then you are dealing with infinite variables, but to theorize you need to work with a few variables only and assume that the other variables either have no impact on those variables or they remain constant. But both these assumptions are ultimately arbitrary. Thus your theory can never move on real historical time. So all theories are abstraction from real time. ___________________________ Ian: It just so happens that I try to understand it by employing ordinary differential equations, not simultaneous equations. This leads me to explain what happens dynamically in terms of a theorem that states that labour values are global attractors for prices. _______________________________ But what causes prices to move in your model? Differential rates of profit--> movement of capital--> changes in supply--> changes in prices toward labor values? Let me ask you one question? What makes you think that changes in supply will not change the values themselves, i.e., on what grounds you think that the methods of production is independent of gross output? If you have not implicitly assumed constant returns to scale? What makes you think that these changes in supply will have no impact on labor productivities through learning by doing or some other kinds of technical changes? So your model is not necessarily running on real time. It is running on the artificial time of your model. You can learn from it but cannot claim to know how real world works. You see! Most of economics from Adam Smith onwards believed that there is something like 'natural prices' or 'prices of production' around which market prices (i.e., real daily prices) fluctuate. Garegnani and his followers think that Sraffa's prices are also the natural prices or the center of gravitation of market prices. I don't. _____________________________________ Ian: Does your philosophy rule out the existence of the object I have constructed? Does it rule out my explanation for its behaviour over time? Or does it have nothing to say about it? Presumably the causal interactions that are instantiated when the model is run are a figment of my imagination? I would really like to know if I've been labouring under such a delusion! -Ian. _________________________________________ Of course they are figments of your imagination. What else they could be? Your model has got what you have put into it, nothing more. The universe has got more things than you and I can imagine. As I have said, your dynamic theory runs on an artificial time not real time. Sometimes it may give a good forecast about certain variables and sometimes it may not. It could just be a chance--we will never know. But the theories are about convincing others. Given the cultural melieu in which you are propounding your theory, it may be highly convincing to others, as your theory may be using assumptions and received knowledge that are highly acceptable in the cultural melieu today. But we should keep in mind that 'the world is flat' was a highly convincing theory sometime ago in their cultural melieu. This explains why a major paradigm shift in one area of knowledge has influence on other areas of knowledge too. It simply changes the cultural melieu. Thank you for your very thoughtful posts on this subject. Cheers, ajit sinha __________________________________ Do you Yahoo!? Protect your identity with Yahoo! Mail AddressGuard http://antispam.yahoo.com/whatsnewfree
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