(OPE-L) Re: Negative values in pure joint production

From: Gerald A. Levy (Gerald_A_Levy@MSN.COM)
Date: Thu Oct 14 2004 - 08:21:17 EDT

>>> It is always an option, ontologically, to treat a firm's production as
one and the same commodity.  <<<


Why?  What is the ontological claim that you are making here?

>>> Prices deviating from values? Impossible! <<<

Since you have framed the issue in this thread on the micro
level, consider the following possibility:

Suppose there is one firm which, using the same technology
and the same production facilities, produces measles vaccine and
influenza vaccine.  Suppose further (even though I think it is
unrealistic in this instance) that the firm puts a price on both
commodities which is equal to their value.  Now suppose that
the price of the measles vaccine remains constant whereas the
price of the flu vaccine *after it has already been produced*
is marked-up by 800%.

If prices can not deviate from value then it therefore follows by
your reasoning that the *value* of the flu vaccine has increased
by 800%, right?

The actual reason for the price increase might be a factor not
directly related to production conditions at this firm, e.g.
*excess demand* for the flu vaccine.  Doesn't it then follow
that if it is impossible for price to deviate from value that value
can increase *solely* because of a change in demand
conditions?  If that is the case, then value can be
created by *firms in the market*, rather than by *workers in
the  production process*.

Are you really comfortable with that conclusion?

In solidarity, Jerry

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