From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Sun Nov 21 2004 - 23:30:07 EST
Hi Claus, Thanks very much for joining the discussion. I would like to begin with your last point, and then reture to other points hopefully soon. On Sun, 21 Nov 2004 cmgermer@UFPR.BR wrote: > > Fred: > > > > However, an interesting conclusion that I have reached recently (which I > > discuss in the working paper that I have attached to previous messages) is > > that, with respect to the determination of the MELT, it DOES NOT MAKE ANY > > DIFFERENCE whether or not credit money still is tied to gold in some > > way. In both cases, the MELT is determined by the ratio MV / L. I won't > > go through the algebra here, but it is in my paper, and I would be happy > > to discuss. > > Claus: > Isn’t the ratio MpV/L of the same nature as Duncan’s original MELT? Duncan > relates the total money value added (which is a part of the total money > value of the product - TMV, or MpV when expressed in terms of > inconvertible paper money) to the total *living* labor employed (LL), > while you relate the total money value of the product MpV to the total > labor (dead labor + living labor) contained in it. Your equation is > MELTp=MpV/L=TMV/L, while Duncan’s is MELT=MVA/LL. Thus, doesn’t your > equation incurr in circular reasoning too, as you say about Duncan’s? No, these two ratios are very decidedly not the same. Duncan's ratio is MELT = MVA / LL (to use your notation). Therefore, Duncan's MELT cannot be used to determine MVA, because the MELT is determined by MVA; that would be circular reasoning. My ratio is instead: MELT = MV / L. In this case, the MELT is determined independently of MVA (or P), and hence can determine MVA (or P), without circular reasoning. Even though MV = PY as an identy, taking M as given is not the same as taking P as given. The whole debate is over the direction of causation between M and P: which is taken as given (or determined prior) and which determines the other? > I wonder whether it is really necessary to go through the algebra as you > did, since the relation MV/L seems to be intuitive: if one knows that the > money values of commodities represent amounts of social labor, then it is > intuitive that the ratio TMV/L (or MV/L) gives the average money value of > a unit of labor time. I am glad that you think that this ratio is "intuitive". So do I. And my algebra shows that this ratio is equal to Marx's method of determination of the MELT with inconvertible paper money. > But this is empirical ex post calculation, if L > could be estimated. But L cannot be estimated, as I have discussed at length (because of unequal skills and unequal intensities). This is a theoretical explanation of the MELT, in which M, V, and L are assumed to exist independently of P (even though L is not observable) and to jointly determine the MELT, and hence indirectly determine P. Claus, do you agree or disagree with this "intuitive" theoretical explanation of the determination of the MELT today? If not, then how do you think the MELT is determined today? I hope you will at least agree that Marx's method of determination of the MELT with inconvertible paper money reduces to MV / L. In this case, the algebra is unambiguous. Thanks again. Comradely, Fred
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