[OPE-L:3495] Re: Re: Re: measurement of value

From: Rakesh Bhandari (bhandari@Princeton.EDU)
Date: Tue Jun 13 2000 - 00:23:09 EDT

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Paul C wrote:

>My take on it is that demand is not important to the determination
>of value except in the case of marginal land, and that this was
>also the position of Marx.

Marx didn't think average or marginal land had value.

> Rakesh has been arguing that commodities
>only have value once there is sufficient effective demand for them
>to sell. If that is the case, then one needs a theory of effective demand
>to get a coherent system.

Well Marx does seem to be a classical thinker in the sense that he too
thought the question of price determination could be separated from
'aggregate' questions regarding the growth and capital accumulation and the
effective demand derived therefrom.

It seems to me that Shane Mage long ago spelled out Marx's theory of
effective demand, which is offered at an aggregate level (where price value
discrepancies at the level of individual commodities is irrelevant).

"Looked at from the angle of 'effective demand' what this means is that
capitalists *seek* to sell their goods on the market for an aggregate price
(in labor units) that will include enough profit to allow them the same
return on invested capital that they have been able to gain in the
immediately preceding period. *Ex hypothesi*, however, this is excluded,
sicne the commoditeis produced contain an insufficient amount of surplus
value. The capitalists would therefore have to sell their proudcts for less
*value* than they had expected to receive in order to dispose of them all.
The products would be sold at their aggregate *value*, but this aggregate
*value* is less than their aggregate price of production *ex ante*. The
difference between the two aggregates will appear to be 'deficient
effective demand.'" From his famous Columbia dissertation, 1963, p. 131

I take this to be the same point as Andrew B's when he writes: "More
importantly, one simply cannot comprehend agg effective demand
fully outside of a comprehension of value, surplus value etc.: in
building up these concepts marx is building up an adequate
conception of usually confused concepts such as agg effective

>if we systematically relabel all uses of the unqualified noun value
>in what I write with the phrase 'potential value', what I am saying will
>be translateable without loss of meaning into a format acceptable
>to Rakesh.

With deVroey, I would say that only a pretence of value (potential) exists
before exchange. Quoted in Ajit's 1990 piece.

Best, Rakesh

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