From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Mon Feb 26 2007 - 14:09:18 EST
1) In reply to Diego: both could be true, and arguably one could think of a situation in which both are true at the same time. As I've argued before, the notion of equilibrium may refer to a number of different sorts of situations which are not infrequently confused. The difficulty with equilibria is typically how you know that you've got one in the real world - the only real observable evidence you have, is that prices or sales stay constant in some sense (usually a rare event). You are of course free to modify my wiki entry, if you think there is a mistake in it, I mean I do not claim to be a professional economist. My idea is that there is a number of categorically different kinds of prices possible - from actual prices paid to acquisition prices, from accounting prices to administered prices, from theoretical prices to hypothetical prices, and so on. Prices may furthermore be applied to different classes of objects under different conditions, from e.g. a packet of butter bought in a shop to labour, hedges, futures, services and leases. Among East European economists, this idea was more frequently theoretically acknowledged. It suggests, that we do not get beyond generalities in price theory, unless we consider the social-institutional frameworks within which those prices are set. I think the difference between a product-value and the ideal price of a product, as far as Marx was concerned, is that the product-value really exists, insofar as that product really takes X amount of society's current labour hours to make, something which the members of society necessarily have to adjust too even if they do not know its exact magnitude, and whether they are trading in it or not, whereas the ideal price is a theoretical price. Thus, the production price would be in most cases a theoretical price level, which could be thought of either as some sort of equilibrium price, or a regulating price (I think that, given what Marx says about the production price, it is better interpreted as a regulating price level, a sort of price-norm). As I have mentioned in a simplified introductory article http://en.wikipedia.org/wiki/Prices_of_production I also think one ought to distinguish between enterprise production prices, sectoral production prices and economic production prices. What makes things complex is, that real prices and ideal prices can mutually influence each other, just as values and actual price signals can influence each other over time inasmuch as market demand and labour-expenditures adjust to each other. I discovered the importance of this myself when doing research in social and economic statistics, but you can also see that operating in the price-reckoning of ordinary business activity. So one of the things you would need to do to complete Marx's theory, would be to consider the "price form" and its different modalities, since although much of textbook economics regards prices as obvious things, there is much more to it. Indeed, nowadays an interface is developing between price theory and information theory. I think if we examine the price-form itself more closely, we get more clues as to why so much of economics oscillates between the objective and the subjective in a more or less eclectic manner, quite apart from the lack of a coherent theory of value. 2) In reply to Jerry: in transit Anders Ekeland and I had some dinner in Amsterdam on Friday night, and discussed further about value theory and political topics (who says OPE-Lers cannot meet?). I wanted to add something to what I said to him, and thought it might be useful to post it to the list. Often I write more clearly on the topic than I talk about it, but that is because I don't work as professional economist, it's more a personal hobby I have pursued on my own, in my spare time (some think I am nuts to do it). To my knowledge, the first mention of an "objective theory of value" was by Rudolf Hilferding in his reply to Bohm-Bawerk, the Austrian Finance Minister and economic theoretician. Nikolai Bukharin I think also referred to it, maybe in his "The Theory of the Leisure Class". However I do not have the relevant works handy here, I left most of my books in New Zealand. The problem is to understand how human valuations may result in objectified values which gain a life of their own, and exist independently of what particular individuals may think or wish, as a given social fact, i.e. how a product or asset acquires a social valuation which exists independently of what transactions may occur with regard to that particular product or asset, and which sets real limits for the trade in it up to the point that, in a sense, commercial value "rules" social life. I do not know who first talked about a relational theory of value - of course, the marginalist idea was mooted long before Menger/Walras/Jevons etc. theorised it more systematically (this is not really acknowledged in Schumpeter's ideosyncratic history of economics). In paragraph 101 on p. 631 of his ideosyncratic treatise "On the Theory of Exchange Value", Alexander Gersch stated that "Economics must take into account both the objective and the subjective background of exchange value because these interact." I think that has to be true, but it's a bit of a non-sequitur, insofar as you then have to explain how they interact, i.e. you have to explain how individual transactors cannot escape from the aggregate social effects of their transactions which delimit what they can do. And that is the problem you have when you try to explain, how the law of value might operate as it were "behind the backs" of the producers, as an unintended aggregate effect of a myriad of transactions during an interval of time. In so doing, you have to consider also, anthropologically, how bourgeois society splits value into social values (legally encoded - the sphere of the political state), economic values (the economic sphere) and personal values (the sphere of civil society). I think the "essentialist" position has some merit, but I don't want to drown it with too much theoreticism, that is all. Jurriaan
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