From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Mon Mar 21 2005 - 09:51:38 EST
--- Andrew Brown <A.Brown@LUBS.LEEDS.AC.UK> wrote: > The next point is they key one. You write ' It is, of course, obvious that one cannot compare prices of a qualitatively new good with any previous prices, but this does not mean that if there are some qualitatively new goods in the system it ipso facto invalidates comparison of prices of all other goods that have remained qualitatively the same.' >Andy: This is actually where we disagree, and where my previous posts have been poorly expressed. Let me try again. Recall that a numeraire is an arbitrary index of exchange value. The exchange value of a good is not really the 'price' of the good (expressed in the numeraire). The exchange value of the good is not really a scalar at all. It is a vector containing the quantity of each respective good in the economy that will exchange for one unit of the good in question. Or, as Marx puts it, a given commodity does not really have 'an' exchange value rather it has as many exchange values as there are other goods in the economy: one car = (1000 mars bars; 0.5 houses; 0.01 aeroplanes; 200 televisons, etc.). It is this true concept of exchange value that becomes incommensurable just as soon as one new good turns up in the economy. Ajit: So from your example, 1 mars bar = 1/1000 car, 1 airplane = 100 cars, 1 television = 1/200 cars. Now let us suppose that after technical change we have 1 mars bar = 1/1005 cars, 1 airplane = 90 cars, 1 television = 1/190 cars, and 1 “new good” = 20 cars. Now can we at least say that the price of mars bar in terms of car has fallen, the price of airplane in terms of car has fallen and the price of television in terms of car has risen? If not, why not? ______________________ Andy: Surely, I hear you - and many an economist - cry, one good good isn't really that important? Well, the only way to vindicate the strong intuition that that a change in one good between systems does *not* make 'exchnage value' incommensurable between systems is to accept that 'exchange value' is itself just an index of something else. Ajit: I simply don’t understand why? What do you mean by incommenrable? ______________________ Andy: What is that other thing?.... it is value!! In other words, your strong intuition that the addition of one or two new goods isn't that 'significant' is in fact a display of your implicit belief that there is a real thing called 'value' that is distinct from exchange value! This is why a theory of value is central to economics. Ajit: Your above statement makes absolutely no sense to me. _______________________ Andy: One view is to say that the 'utility' of the exchange value vector is little changed by the change of just one good. Herein lies the roots of subjective value theory. Another is to say the labour time represented is little changed. Herein lies the roots of a materialist LTV. This is all quite simple really. Marx does it just a pargarph or two at the strat of 'Capital'. But note: you have to understand all this *before* you can understand what comes later in 'Capital'. This is precisey because what comes later is going to appear like 'mumbo jumbo' to common sense intuition. Ajit: I don’t think you are displaying a good understanding of either the subjective theory of value or Marx. One new good or 50 new goods make no difference. As long as there are some old goods, their prices can be compared in terms of some old good. ______________ Ajit: My question is: what is this relationship between labor-time and price? And particularly when, according to you, this labor-time cannot be measured? ' >Andy: Well, in terms of magnitude, it is a broadly positive relationship, don't you think? Albeit there are different OCCs, there's crises, there's ecomnomic rent. So it's pretty chaotic. _____________ Ajit: And this is what you want to stand as an alternative to Sraffa? Kinda too chaotic and mumbo-jumboish, no? _________________________ Andy: But there is likely a pretty strong positive relationship when dealing with (ceaselessly changing) avereage and in aggregate (obviously not an exact proportionality though, contra the usual interpretation of Marx's famous aggregate equalities). ___________________ Ajit: How do you move to aggregates and averages when you are dealing with relative prices of commodities? Wasn’t that the subject matter we were dealing with? ____________________________ Andy: Economists from Ricardo (93%) to Joan Robinson (let alone your co-author, as Rakesh appropriately pointed out) seem agreed on this. _______________ Ajit: Forget about “economists”. First of all, I have read a few economists too and I’m in a business of interpreting real good and tough ones and so there is no need to get side tracked on interpretation issues. Secondly, as you know, I’m a pretty arrogant sort of a chap. I don’t care what sort of a name you throw at me, if I disagree I would be happy to argue with the person rather than argue second hand. So the best way to get anywhere with me is to develop your own arguments without throwing names. __________________________ Andy: On 'measure' I mentioned that you haven't quite parahprased me correctly. We can't 'see' the weight of an object but it still has weight doesn't it? We could measure it on a pair of scales, using 'weights'. These 'weights' are analogous to prices and are the 'external measure' of weight. The immanent, invisible measure of weight is the quantitative aspect of the force of weight (gravity) itself (in units appropriate to this force). This immanent measure is analogous to labour-time. It's a useful analogy but like all analogies it ain't perfect.... Still mumbo-jumbo? __________ Ajit: Yes! Because I can change “labor-time” with anything I want and the analogy will remain intact. In any case, an analogy is not a substitute for a theory. All it can do is to help someone understand a theory. You are smart enough to know that all this is mumbo-jumbo, so I don’t understand why you are writing them. You are simply either not reading them after writing or not thinking about the nature of the problem you are dealing with. If you are someone who can read Marx, Sraffa, Wittgenstein, Hume, and others and claim to have some understanding of them, then you must be able to think through your own thoughts. How can you present this kind of unorganized thoughts as an alternative to serious work like Sraffa’s? You have to be more serious than that. I am trying to force people, particularly modern day “value theorists”, to think clearly on important theoretical issues for their own good. It is no good to oppose ajit sinha without any understanding of the issues involved, as Rakesh does. Cheers, ajit sinha __________________________________ Do you Yahoo!? Yahoo! Small Business - Try our new resources site! http://smallbusiness.yahoo.com/resources/
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