Re: [OPE-L] bubbles and Marxian theories of value

From: Michael Perelman (michael@ECST.CSUCHICO.EDU)
Date: Wed Feb 08 2006 - 20:07:04 EST

I examined the subject in my book on Marx's Crises Theories in the chapter on fictitious

On Wed, Feb 08, 2006 at 03:55:21PM -0500, Jerry Levy wrote:
> 1. Bubbles occur  where "asset prices [are] unrelated to underlying
> values."   For instance, a  "house price bubble can be defined
> simply as a deviation of the market price  from the fundamental value
> of the house."   Bubbles often arise  "when speculation in a commodity
> or asset class causes the price to increase, thus producing more
> speculation."
> 2. As we all know,  there is disagreement among Marxians with regard
> to our understanding of value (understatement).   One area of contention
> is whether it is meaningful to refer to *price-value divergences*:  there are
> those (including Marx) who refer to individual prices rising above or falling
> below values and there are those who claim essentially that there is an
> identity  between value and price.  For instance, surplus approach theory
> might  suggest that a dual accounting of price and value is "redundant";
> value-form theory claims the money price is the sole autonomous
> representation of value. This leads me to my ...
> --------------------------------------------------------------------------------------------------
> *QUESTION*  :  how do those Marxian perspectives which don't
> allow for price-value divergences explain the existence of bubbles?
> --------------------------------------------------------------------------------------------------
> Background:
> I sat next to Gary this afternoon at a workshop given by Ed Nell
> and Davide Gualerzi at the New School and the topic of bubbles
> came up in their presentation on "Transformational Growth in the
> 1990s."  This got me to thinking about the above and I asked Gary
> afterwards if there was any literature from a surplus approach
> perspective on bubbles.  He couldn't think of anything off-hand but
> did mention John Eatwell.  I thought this was an odd reference
> because -- last I heard -- John  had long since stopped being a
> surplus approach theorist.  Am I mistaken about that Gary?
> I _almost_ asked Ed and Davide what theory of value they were
> (implicitly) using to explain bubbles since the definition that they
> gave obviously presumed _some_  theory of "underlying value".
> I  was thinking of asking them ...
> ------------------------------------------------------------------------------------------------
> *What is the _theoretical_ explanation for bubbles?*
> ------------------------------------------------------------------------------------------------
> In solidarity, Jerry

Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at

This archive was generated by hypermail 2.1.5 : Thu Feb 09 2006 - 00:00:01 EST