From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Mon Jul 09 2007 - 17:49:32 EDT
Ajit argued a long time ago (against Jim Devine): "Value" is defined at the point where there is no realization problem. Whenever supply and demand (and they are not demand and supply schedules) do not match, market prices diverge from value. http://archives.econ.utah.edu/archives/pen-l/1995m06.c/msg00024.htm I do not know if he still believes that, but I don't think it follows, unless you make it a tautology. I think supply and demand (on some definition) could match, even although market prices and values diverge. That is, the value/price divergence may have not necessarily have to do with supply-demand fluctuations. At most you could say that In Marx's model, if supply and demand match, goods sell at production prices. But these production prices may still diverge from values. It's almost as though Ajit thinks here that supply-demand balance and equal exchange are the same thing, and I don't think they are. A case to which Marx refers is the unequal exchange of industrial and agricultural goods (their terms of trade). The output of agricultural goods could be fairly stable (bar the odd bad harvest) and the demand for agricultural goods could be fairly stable, yet agricultural goods trade below their value and industrial goods trade above their value. Jurriaan
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