[OPE-L:7413] Re: Re: Interpretations of the "numeraire"

From: Gil Skillman (gskillman@mail.wesleyan.edu)
Date: Mon Jul 08 2002 - 14:37:35 EDT

Where I wrote

>>  there is no necessary formal difference between the two systems on this 
>> score.  The money commodity in the latter theory can be represented in a 
>> manner that is *mathematically identical* to the numeraire good in the 
>> former system--suggesting the potential relevance of such things as 
>> "wage/profit frontiers" for the system Marx intended to analyze.

Rakesh responds

>Yes but from the former you cannot derive a theory of the nature of money 
>such that it has functions other than as a numeraire, i.e., as a store of 
>value, a means of payment, hoard, capital,  etc. For more on this, see 
>Alfredo Saad Fihlo's book, last chapter.

Yes, and from the latter there's no way to check that one's theory of all 
the things you just mentioned is built on coherent and mutually consistent 
assumptions.  The demonstration I discussed earlier, for example, suggests 
that certain claims advanced in the context of value theory are 
inconsistent with the possibility of determining mutually consistent prices 
of production under market conditions also invoked by Marx--about which 
more below.

>The timelessness of an analytical apparatus built on simultaneous 
>equations also makes no room for the problems which arise from failure to 
>complete the circuit of money capital in a determinate time; if one 
>assumes that the technical conditions are given and the only problem is 
>the the determination of distribution + relative prices with an 
>arbitrarily chosen numeraire--and  Peach and Blaug seem correct that the 
>Sraffian standard commodity does not solve Ricardo's truly intractable 
>problem of invariant measure which holds over time--then money is just 
>reduced to being a numeraire alone and it is difficult to see how one then 
>proceeds logically to make room for money as capital the turnover of which 
>must be completed in a determinate time. There simply seems to  no 
>theoretical way of escaping what Aoki characterizes as the classicals' 
>thin conception of money.

On one hand, at the level of abstraction currently being discussed by Fred 
and Gary (corresponding to Marx's treatment of the transformation problem 
in KIII, Ch. 9), I don't see how these considerations are relevant, since 
they are not yet introduced by Marx, either.

On the other hand, it is not at all clear to me why time cannot be 
introduced into the Sraffian framework via time-dated variables. To the 
contrary, it's already been done.

>Before one handles input output relations, one has to grapple with what 
>Marx calls the qualitative value problem or the problem of money--that is 
>why it is exactly in the bourgeois mode of production individual labor has 
>to be transformed into general abstract social labor in some specified 
>time. Once this problem is solved, it seems obvious that  the money 
>commodity cannot be put along side all the other commodities or as just 
>one more equation in a system of equations which can be closed since such 
>a system of equations seems to lose the contradiction between commodities 
>on one side and money on the other.

I don't see this.  What valid, empirically relevant claim is made in 
Marxian theory that is necessarily lost in the Sraffian framework?

>That is why I think Fred's approach which takes its given or starting 
>point in money or in other words begins with money as capital rather than 
>with given technical conditions is superior to the linear production 
>approach, though I am not fully convinced by Fred's approach.

Again, I don't see why the two forms of abstraction are necessarily 
incompatible, and they're constructed to do different things, both 
legitimate and relevant.

I don't dispute the general claim that there are some theoretical tasks 
that the Sraffian framework is ill-equipped to address.  I'll have more to 
say about these limitations in coming posts.  But since this is true for 
any imaginable theoretical framework, presumably including Marx's, I don't 
yet see the power of this objection.  In particular, the Sraffian approach 
can address evidently relevant questions with respect to hypothetical 
exchange conditions that are also hypothetically embraced by Marx.

For what it's worth,


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