From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Wed Mar 23 2005 - 13:49:36 EST
At 6:55 AM -0800 3/23/05, ajit sinha wrote: >--- Andrew Brown <A.Brown@LUBS.LEEDS.AC.UK> wrote: > >> Hi Ajit, >> >> In a system of generalised commodity production we >> aren't much interested in the exchange value of a >> commodity in relation to just one other commodity! >> That isn't what we mean by 'purchasing power' or >> exchange value, nor is it the true significance of >> 'price'. We do not acquire money only for its own >> sake but because it allows us command over all the >> goods produced in the economy, in some or other >> definitie quantitities. Isn't this the key >> significance of money? It (money) is the general >> equivalent and it has a crucial quantitative >> dimension for us that is not captured by reference >> to the exchange relation with just one good! (If you >> disagree then here certainly lies a deep disagrement >> between us). We are interested in generalised >> purchasing power and so need to quantify it. >_________________ > >Andrew, you may be interested in ghost stories and >ghosts may be having real influence in many people's >life. But that does not mean that my paper or Sraffa >or anyone else must deal with ghost stories. The >problem appears to me is that you have a private >meaning of numeraire. Economists' understanding of the numeraire is a private affair; it is the meaning that money has in the private world of economists and nowhere else. > Our paper deals with numeraire, >which has a well defined meaning in economic theory, >particularly in the theory that our paper is designed >to critique. How about if I say that poverty is the >most serious economic problem and your theory says >nothing about how to measure poverty or reduce >poverty. So, there! That's my criticism of your >theory. You will be legitimately allowed to say, >"bull"! >______________________ > > But, >> absent a theory of value by which we can reduce to >> one dimension the manifestly diverse goods that >> money enables us to purchase, all we can do to >> quantify purchasing power of, say, a unit of money >> is consider the whole set or vector of goods, each >> of which costs one unit of money. Then one unit is >> 'worth' one of these vecotrs, two units is worth two >> and so on. >___________________________ > >But why do we have to do this? What theoretical >purpose does it serve? >_________________________ > But this obviously breaks down once new >> goods come along so to get a measure of generalised >> exchange value -- or purchasing power -- through >> time then becomes impossible without the 'third >> thing', value, that allows us to commensurate >> otherwise incommensurable diverse commodities. >_______________________ > >How does value help you here? >_______________________ >> >> Alas, your other replies seem to me to offer a >> 'revisionist' history of our actual conversation! >> But I really would like to know your view of the >> relationship between labour times as prices. Please, >> this question does not presuppose you think there is >> one, you can just reply: 'I don't think there is any >> relationship'. Any sort of substantive reply would >> be very helpful for me. I tried to answer this >> question for myself previously but failed to make >> any sense to you. Let's truncate my own previous >> reply: in terms of simply magnitude (your favourite >> terms?), I think it is a positive relationship, and >> a pretty strong one. But it is not exact, not >> ergodic. >_______________________ > >Yes, but the statement that it has "a positive >relationship" does not make sense. First of all if >value theory has to explain why 'one quarter of corn = >x cwt. of ironí, as Marx put it, then in that case the >statement that labor and prices have positive >relationship is meaningless. No Marx is not interested at first in explaining the exchange ratio. In the first part of Capital, he wants to show what it is that money has to alone represent if commodities only exchange against it. He tries to unlock the mystery by beginning with the accidental form of value which is not analyzed in order to explain the exchange ratio of linen and cloth but to uncover the substance of value which a single commodity alone comes to represent in the highest form of value. Let's take your approach; say I make steel the numeraire; then (assuming that steel is a universal input) I reduce the inputs in all other commodities to steel so that I may assign them each a respective steel value. A numeraire however represents nothing other than itself. It is only a convenience for the calculation of exchange ratios.But how can a mere device for calculation convenience and have fetishistic power? Giving everything a steel value does not explain in virtue of its representation of what would steel be able to monopolize direct exchangeability. There is no reason why commodities could not exchange against each other in terms of their steel values. Money is a fetish because it alone embodies the social relation among laborers, not because all other commodities can be reduced to embodiments of its concrete substance. For Marx gold does not only represent itself. Because Marx shows that it alone represents abstract social labor (this is what Marx discusses in the three peculiarities of the equivalent form), the mystery of fetishistic power is thereby disclosed. Gold is (of course was) not a fetish in virtue of any of its own properties or its status as a physical input common to commodities; it is a fetish in virtue of its monopoly of representation of a social substance of which all commodities are a mode of appearance. So my sense here is that Marx thought he had established that the substance of value had to be abstract social labor because in alone having come to represent abstract social labor money had thereby gained fetishistic powers that a numeraire as a mere calculation device alone could not possess. That is, Marx's theory of the substance of value allows him to explain the power of money. Rakesh
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