Jerry writes:
>Let's step back a moment.
>
>*Every* economic theory has a theory of value (whether it is explicitly
>stated or inferred).
>
>One of the major questions that a theory of value answers is: what
>determines exchange-value? If you can't answer that question, then you
>can't have a theory of (any type of) price either.
>
>Obviously, it would be a tautology to say that exchange-value determines
>exchange-value.
>
>Is it marginal utility, as suggested by the marginalists? If Gil and Steve
>think there are problems with Marx's theory, what about the marginalists'
>theory? E.g. what is a "util" and how is that fiction measured?
>
>A theory of value could be based on physical quantities. If that is the
>case, how does money enter the picture except as a numeraire?
>
>What I don't hear Steve or Gil suggesting, then, is an *alternative*
>theory of value.
That's right, because the question of whether Marx's Chapter 1 argument is
or is not valid does not hinge on putting forward any particular
alternative theory of value. First things first. Perhaps by fully
understanding the sense in which Marx's argument fails, we'll arrive at a
new theory of value.
For what it's worth, though, the neoclassical theory of "value" doesn't
depend on the existence of utils. You can define a general equilibrium
using preference relations (satisfying certain properties, of course)
without invoking utility functions. And even if such functions were used,
"utils" need only be understood in an ordinal sense (i.e. only unique up to
a monotonic transformation).
Gil