From: Andrew Brown (A.Brown@LUBS.LEEDS.AC.UK)
Date: Mon Mar 21 2005 - 11:58:41 EST
Ajit, You wrote: '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?' I reply: Yes you can. What you can't do is say what has happened to the 'exchange value' or 'purchasing power' of any particular good, in the face of new goods. A numeraire is, I take it, an index of exchange value, for what other general significance can it have absent value theory? The exchange value of a good is a vector containing the quantities of all other goods for which the good in question will exchange. The incommensurability of exchange value before and after technical change is therefore obvious. What do you think exchange value is? The problems of measuring inflation and 'GDP' (so called index number problems) are where all these issues become nice and clear. You wrote 'I simply don't understand why? What do you mean by incommenrable?' I reply: I can't compare apples to oranges without reducing them to some common third factor that they both possess, say their weight. You quote me, "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." And you write 'Your above statement makes absolutely no sense to me'. I reply: well, have a think about it! You wrote, '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?' I reply: you asked me about the relation between labour times and prices. Labour time entails an intrinsic value notion so it is natural to consider both relative and absolute values. You quote me: "Economists from Ricardo (93%) to Joan Robinson (let alone your co-author, as Rakesh appropriately pointed out) seem agreed on this." And you write: '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. I reply: I was trying to indicate the nature of my position by reference to a wide strand of economic thought. This is not an appeal to authority. What do you think the relation between labour times and prices is? Have a chat with your co-author! You quote me. "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?" And you reply, '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.' I reply: you asked me about the problem of the 'invisibility' of value. So I gave an analogy involving something else (weight) which is invisible. This shows, amongst other things, that there is no inherent problem with positing invisible forces or substances (assuming that we agree on the existence of 'weight'). If you have some other problem with value than invisibility, then fire away but I can only reply to what you ask me. Yours humbly! Andy
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