>Im interested in knowing why does Ajit think that $1 = 1 hour of
>labor is an "absurd assumption"? As we have seen, he has been making
>this statement in many posts, but I havent found a clear explanaition
>for this yet.
>
>Of course, I dont want to direct this question only to Ajit, but also
>to other people who, I think, is near to his particular
>interpretation (like Paul C., Allin C., David L.)
I think that the basic objection is that the question of the price
level should first theoretically be solved without assuming fiat
money. It should be solved initially for economies with commodity
money as these are both conceptually and historically prior to
systems of fiat money since fiat money involves dealing with state
finance which is outside the scope of discussions of value theory.
Given commodity money, one is not at liberty to assume that a
particular ratio exists between labour time and money, since
gold must be treated as a branch of production like any other.
Its value must depend upon conditions of production in the gold
industry.
Paul Cockshott (wpc@cs.strath.ac.uk)