From: Andrew Brown (A.Brown@LUBS.LEEDS.AC.UK)
Date: Thu Mar 17 2005 - 10:53:40 EST
Hi Ajit, It's a funny thing but I had the impression that my (obvious) point about technical change was something like saying the emperor has no clothes (a phrase you use to describe your own point below)! You write, 'But on what basis you can make that claim? Your claim would need an argument like what we have provided in our paper.'. I reply: This is very puzzling. Is it not obvious that, in general, two price vectors are incommensurable if one contains the price of a good that the other does not? What more do I need to say to 'prove' this point? You write 'Our paper is showing a more general and stronger result that even when there is no new machine in the system, just a change in the input output configuration makes it impossible to compare prices in the two systems. So i really don't understand your problem.' I reply: Yours is arguably more 'general' in mathematical terms, perhaps. But in reality (your favourite word!), technical change involves new machines, as a general rule. Arguably treatment of any other sort of technical change is, dare I say it...childish!..:)..I fear we will be branding the 'childish' accusation at one another on a regular basis, well all I can say to that is...'you started it'! You write 'Whether the Sraffian system can deal with technical change or not is a separate question. People who are interested in developing the so called constructive part of Sraffa are able to do a lot with it and are quite able to deal with technical change. My own reading of Sraffa is different. I think Sraffa was interested in developing a critique of economic theory, at least that's what he explicitly claims, and not developing a system to understand the economy. How do you understand an economy? By developing a theory about it. Sraffa's project was to show that the predominant theory designed to understand the economy did not have grounds to stand on. The emperor had no clothes!' I reply: I think the emperor has no clothes because the impression that technical change has been adequately dealt with by Sraffians, or any other economists, absent a theory of value must be a false one. I see your own critique as, in its own way, showing this by showing that there is no 'law' regarding prices through different systems. This is because I think any theory aimed at grasping the economy must grasp the economy through time. However, you give the reader some strange lenses with which to view the emperor, viz. the lenses where technical change strangely does not involve new machines. I say the lenses are unnecessary, you just have to look at him with the naked eye (don't make silly assumptions about technical change). You write 'I simply don't understand your problem. If I can prove something without introducing new machines whereas the same thing can be proven by introducing new machines then don't you think that my approach is more robust? Secondly, if your purpose is to critique a theory, then your critique is more robust if you can develop it within the parameters of their theory without introducing any extraneous factors'. I reply: The answer is simple: in the real world technical change usually involves new machines. It serves no one any purpose by pretending it doesn't. My eye is always on understanding reality. The fundamental critique of any theory must relate to reality. Sorry, I think there is one (a reality that is)... if you don't then I think you are contradicting yourself, and hence your critique is likewise self-contradictory...oh dear, this can only lead us into philosophical waters... You write 'I don't understand how by introducing extraneous factors such as new machines you make your ground more profound? It comes close to the childish criticisms such as your assumptions are not realistic--as if Arrows and Samuelsons don't know that!' I reply: nothing childish about trying to understand reality. Note, we can make whatever assumptions we like in our theory but we must always consider what use the assumptions have by asking ourselves what happens when we relax the assumptions. Relax the assumption of 'no new machine' and an economic theory which does not recognise value becomes useless. You write 'In no commodity I have found hours of labor being contained like cotton or feather stuffed in my pillow. You can break any commodity to the last atom and you will not find your "stuff" anywhere. So what kind of "stuff" is this? Secondly, and more importantly, how does it explain their price magnitude? Let's not dance around it. Let's see how far your version of the LTV goes' I reply: Its strange stuff, to be sure. It explains price magnitude only by the familiar mechanism of the invisible hand (a whole different story to my sack of potatoes). The point re. magnitude is that this mechanism does not mean that labour time and price lack any relationship (as do, for example, labour time and weight). That's all that is required. It makes sense of beginning with price-value(labour time) equivalence and then examining deviations from equivalence at more complex levels of theory. For it gives prices meaning, as forms of value, in any capitalist system, hence laws do apply to capitalism and we aren't left floundering, as I fear we are according to your view. You quote me: Andy: This substance makes > us spend alot of our lives dealing with it, with the > value of things. Commodities are in general neither > objectifications of electricity nor petrol! And you ask, 'Why not?' I reply: People are different from machines. We objectify our labour. Machines don't do any labour. You quote me: If you > agree that social labour is distributed in our > society then you agree that 'labour' has a unit, and > you are enabled to use this unit to grasp capitalism And you ask 'What is "social labor"? And if this "social labor" is distributed in our society then what makes you think that electricity and petrol are not distributed in our society?' I reply: 'social labour' is the 'labour' part of the phrase 'social division of labour'. Why would I deny that electricity and petrol are socially distributed? You quote me: Andy: > -- no it cannot in general be directly measured, > especially due to impossibility of assessing > differences between labour in different industries, > but there is a common unit (though we cannot > empirically measure it directly) and prices do the > job of measurement for us (very imperfectly). All > this is much clearer once we consider capital but > all the above is more abstract than that. And you write, ' see how quickly it gets you in a quagmire! First you say that the "stuff" explains their (commodities) magnitude of prices. Then you go on to say that prices do the job of measuring the "stuff". I see the dog chasing his tail. And interestingly in this case the tail is invisible since you admit that the "stuff" cannot be measured.' I reply: you (almost) correctly paraphrase me but the quagmire, dog and tail are your own constructions! I'd certainly agree that value theory isn't easy. But why presume that a theory of a complex society should be easy? Certainly difficulty isn't a reason to give up on economics all together, *or* to pretend that one can do economics whilst abstracting from time! [you are not quite correct on paraphrasing me due to complexity of the concept of 'measure' which we need not go into] Many thanks, Andy
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