In regard to Costas's contribution:
Prices necessarily diverge from values, therefore, value measurement is not
the simple division of individual commodity value by the value of money. At
a further remove, the existence of a production price for gold, and
exchange at market prices rather than prices of production, imply that for
aggregate output too value measurement is not the division of total value
by the value of money. Consequently, even when money is a commodity, value
measurement is a real process which must be analytically specified at
several different levels of abstraction. The fact that commodity money
possesses value in not immediately and obviously significant in this
respect. A fortiori, there is no reason at the outset why valueless money
cannot do the job.
Chai-on:
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In the case of the prices of production,
The money price should be defined as follows,
P(a)/P(g)
P(a): the price of production of commodity A
P(g): the price of production of gold.
Costas, you should rather have to show first why there is no reason
at the outset why valueless money cannot do the measure of value.
Derivative measures can do it but it should have some link to the
original measure.
Yours,
Chai-on