From: Andrew Brown (A.Brown@LUBS.LEEDS.AC.UK)
Date: Fri Mar 11 2005 - 05:22:46 EST
Thanks Ajit, I don't think economics can get very far without a theory of value, and in point of fact well known existing economic theories do have a theory of value, hence the burden of argument would seem to be on you to show us how economics can proceed absent a theory of value. And I hope we agree that economics is useless if it tells us nothing about reality where change through time is axiomatic. You write: The problem of new machines etc. being produced is not a problem within the context of a given system of basic goods. All new goods including new kinds of machines are non-basics for the given system of production. Cheers, ajit sinha I reply: at best this remark seems to confirm the point I was making. In the real world, 'technical change' includes the introduction of a new machine to the production process. Therefore (1) the correct analysis (one which does not assume away the very point at issue) of such technical change must be a comparison between 2 different *basic* systems; (2) the Okishio theorem tells us nothing about the movement of the real world profit rate, in the face of real word technical change; (3) I remain puzzled as to why you place so much stress on results that you achive by entirely unrealistically holding the set of (basic) goods qualitiatively identical -- the fundamental limitation to economic science (and value) that you wish to stress is surely given by the point about real world technical change that I am making? (4) For my own part I believe the LTV is essential precisely because it provides a common substance and hence unit of value through real world technical change (the *magnitide* of this substance in any commodity changes, but the substance and unit itself does not, through technical change). Your further thoughts on the above would be very much apperciated. Specifically if I have got something wrong I'd be very grateful if you could explain why and how. I will otherwise remain confused! Many thanks, Andy --- Andrew Brown <A.Brown@LUBS.LEEDS.AC.UK> wrote: > Thanks to Paul and Ajit, > > Have always been intrigued by Ajit's interpretation > of Sraffa (I speak > as an interested layman on Sraffa). Paul, I did not > think you subscribed > to Ajit's interpretation. I thought you held a > labour theory of value. I > thought that Ajit, by contrast, takes Sraffa to show > us that no theory > of value, in any accepted sense, is possible (time > -- technical change > -- takes us from one 'system' to another, analogous > to moving from one > 'language game' to another, hence rather disabling > economic science). > But the conclusion to this paper talks about a > fundamental limitation on > economic science as such, in line with Ajit's view, > thus I am puzzled > that you (Paul) should subscribe to it. No doubt I > have misinterpreted > both of you - so apologies in advance for that... > > To my inexperienced mind, a more fundamental point > than the one you make > in this paper is that 'technical change', in the > real world, involves > change in the goods produced (e.g. a new machine). > Given such a change, > then you can't compare prices before and after > change (as you do in the > paper, by keeping the economy's goods qualitatively > identical) can you? > Albeit this doesn't provide the immanent angle on > general equilibrium > theory, but perhaps it makes Ajit's point more > forcefully, when it comes > to practical (real world) considerations? Or, more > likely, I have got > something wrong somewhere. > > On a related aside, perhaps you can help me with the > following. The > Okishio theorem tells us that viable technical > changes cannot lower the > rate of profit. But how can this tell us about 'real > world' technical > change, where, say, a new good is introduced? As far > as I can see it can > tell us nothing about such a case, but no doubt I > have got all this > horribly wrong (people as far apart as Steedman and > Fine seem to me to > have stated that 'empirically' the rate of profit > can only fall if real > wages rise). > > Many thanks, > Andy > > > > > > > > > -----Original Message----- > From: OPE-L [mailto:OPE-L@SUS.CSUCHICO.EDU] On > Behalf Of Paul Cockshott > Sent: 08 March 2005 12:08 > To: OPE-L@SUS.CSUCHICO.EDU > Subject: [OPE-L] standard commodity > > Ajit and I have written a paper on the significance > of the Standard > commodity which, with Gerry's permission I am > posting to the list. > > It is at: > > > http://www.dcs.gla.ac.uk/~wpc/reports/Sraffa%20Standard%20Commodity.htm > __________________________________ Do you Yahoo!? Yahoo! Mail - Easier than ever with enhanced search. Learn more. http://info.mail.yahoo.com/mail_250
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