[OPE-L:4991] Re: Comments on 3 recent debates

From: Gerald_A_Levy (Gerald_A_Levy@email.msn.com)
Date: Tue Feb 20 2001 - 09:05:34 EST

Re Allin's [OPE-L:4982]:
> 1. Price of production and technological change. <snip, JL>
> Fred's specific argument against Drewk a bit scholastic.  The "smoking
> gun" (OK, not Fred's phrase) is a set of quotations showing that Marx
> held that prices of production change _only if_ there's a change in
> labour productivity somewhere in the system, or if the wage changes.
> But Drewk's tables show prices of production changing period by period
> even when there's no change in technology or the wage, therefore Drewk
> is inconsistent with Marx.  Well, suppose we change the example.
> Keynes held (this is a simplification, of course) that aggregate
> output changes _only if_ there's a change in autonomous expenditure.
> We bump up investment (I) at some time t and let the multiplier go.
> On some interpretations of the multiplier we'll find aggregate output
> changing for many periods after the change in I, as GDP converges
> towards the new equilibrium.  Can we immediately deduce that this is
> inconsistent with Keynes's concept?  Surely not: it's a secondary
> matter whether the shift to the new equilibrium GDP occurs in one
> period (instantaneous multiplier) or takes several periods.
> Similarly, Drewk's changing prices of production converge (ceteris
> paribus) to the ones found via the method of simultaneous equations.
> Drewk's prices of production are analogous to the multi-period
> multiplier.  Change in these prices is _triggered_ by a change in
> technology or the wage (and I think _only_ by such things, though I
> certainly wouldn't claim to speak for Drewk), but the change is spun
> out over time.  So I don't see much force in the smoking gun.

Aren't you forgetting about another aspect of the Kliman/McGlone
interpretation of the transformation? Namely, as Fred has pointed out [see
#3 in 4908], that changes in market prices are explicitly abstracted from?
If there are "no market price oscillations", then the temporal adjustment
process you suggest can't happen.

(NB: Andrew K hasn't responded to this point made by Fred).

I also am doubtful about the applicability of using the multiplier analogy
re TSSI interpretations since at least one well-known TSSI advocate has
explicitly written about "The Fallacy of the Multiplier" (see Mino Carchedi
_Frontiers of Political Economy_, pp. 210-211). I also don't think that the
multiplier interfaces too well with the conservation of value principle
which seems to be accepted by TSSI advocates.

In solidarity, Jerry

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