From: Andrew Brown (andrew@LUBS.LEEDS.AC.UK)
Date: Mon May 31 2004 - 09:34:59 EDT
Hi Costats and all, Let me clarify my comment on Costas� notion of money as �absolute purchasing power�, in light of Costas� reply. > Andy wrote: > > "Costas, money as form of 'purchasing power' means, quantitatively, > that money serves as an index of the size of the feasible set, i.e. as > no more than a numeraire. Money does not serve to homogenise > the diversity of goods. Thus 'purchasing power' cannot be compared > quantitatively through time due to qualitative change to the feasible > set (changed in goods, new goods, old goods). In these > circumstances a science of money must look for something other > than 'purchasing power', as which the diverse goods are equivalent, > shouldn't it?" > > This argument is not entirely clear to me but I read it as saying that > money 'as purchasing power' cannot be a numeraire because the set of > commodities changes over time. Rather, there can be no numeraire (whether �money� or anything else) that is quantitatively comparable through time because of changes in the set of commodities. >I do not see why change in the set over > time is an especial problem for money 'as purchasing power'. It is not an especial problem for money but a general problem for the concept of �purchasing power�. >Nor is it > clear that this particular problem becomes less difficult when, say, > abstract labour is chosen as factor of equivalence. The theoretical > difficulties of making dead labour (especially of many vintages) > equivalent with living labour are well-known. It is clear. �Abstract labour� provides a unit of measure that is constant through time (i.e. through change in the set of commodities). �Purchasing power� has no such measure. It is one thing to have a problem in determining the precise magnitude of a quantity (SNabLT) through time. It is a more abstract, simple and fundamental problem to be bereft of a constant *unit of measure* throught time. The problem with �purchasing power� is the latter problem. The problem with valuing vintages of capital is the former problem. > > In any case, in my view, money becomes the numeraire as commodities are > regularly and universally offered for it in view of its unique purchasing > power. In short, the unit of account function (as social process and not > as abstract division by an economist) is inseparable from the means of > exchange function. Both functions arise out of money's monopoly over > buying ability. The coherence and consistency of the nomenclature of price > is a different matter, and depends on the existence of abstract labour as > social substance. In the absence of the latter, for instance, money would > still operate as numeraire but prices could fail to exhibit transitivity. I originally interpreted your para here to imply that you felt that the question of �quantity� is a �different matter� to the question of quality. As if quantity were a matter of �nomenclature�, a purely nominal, secondary issue. Now, I am not so sure how to interpret your para. In any case, the point I am getting at is that it the terms �unit of account�, �purchasing power�, and other such, lead, on reflection, to a search for the �third thing� that is value because of the problem of finding a unit of measure that is constant through time. This is so in the CMP and prior to the CMP. I�m not clear that your attempt to use these terms absent an enquiry into value is fully consonant with this point. Many thanks, Andy
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