Re: [OPE-L] standard commodity

From: Andrew Brown (A.Brown@LUBS.LEEDS.AC.UK)
Date: Thu Mar 17 2005 - 10:53:40 EST

Hi Ajit,

It's a funny thing but I had the impression that my (obvious) point
about technical change was something like saying the emperor has no
clothes (a phrase you use to describe your own point below)!

You write, 'But on what basis you can make that claim? Your claim
would need an argument like what we have provided in
our paper.'.

I reply: This is very puzzling. Is it not obvious that, in general, two
price vectors are incommensurable if one contains the price of a good
that the other does not? What more do I need to say to 'prove' this

You write 'Our paper is showing a more general and
stronger result that even when there is no new machine
in the system, just a change in the input output
configuration makes it impossible to compare prices in
the two systems. So i really don't understand your

I reply: Yours is arguably more 'general' in mathematical terms,
perhaps. But in reality (your favourite word!), technical change
involves new machines, as a general rule. Arguably treatment of any
other sort of technical change is, dare I say it...childish!..:)..I fear
we will be branding the 'childish' accusation at one another on a
regular basis, well all I can say to that is...'you started it'!

You write 'Whether the Sraffian system can deal with technical
change or not is a separate question. People who are
interested in developing the so called constructive
part of Sraffa are able to do a lot with it and are
quite able to deal with technical change. My own
reading of Sraffa is different. I think Sraffa was
interested in developing a critique of economic
theory, at least that's what he explicitly claims, and
not developing a system to understand the economy. How
do you understand an economy? By developing a theory
about it. Sraffa's project was to show that the
predominant theory designed to understand the economy
did not have grounds to stand on. The emperor had no

I reply: I think the emperor has no clothes because the impression that
technical change has been adequately dealt with by Sraffians, or any
other economists, absent a theory of value must be a false one. I see
your own critique as, in its own way, showing this by showing that there
is no 'law' regarding prices through different systems. This is because
I think any theory aimed at grasping the economy must grasp the economy
through time. However, you give the reader some strange lenses with
which to view the emperor, viz. the lenses where technical change
strangely does not involve new machines. I say the lenses are
unnecessary, you just have to look at him with the naked eye (don't make
silly assumptions about technical change). 

You write 'I simply don't understand your problem. If I can prove
something without introducing new machines whereas the
same thing can be proven by introducing new machines
then don't you think that my approach is more robust?
Secondly, if your purpose is to critique a theory,
then your critique is more robust if you can develop
it within the parameters of their theory without
introducing any extraneous factors'.

I reply: The answer is simple: in the real world technical change
usually involves new machines. It serves no one any purpose by
pretending it doesn't. My eye is always on understanding reality. The
fundamental critique of any theory must relate to reality. Sorry, I
think there is one (a reality that is)... if you don't then I think you
are contradicting yourself, and hence your critique is likewise
self-contradictory...oh dear, this can only lead us into philosophical

You write 'I don't understand how by introducing extraneous
factors such as new machines you make your ground more
profound? It comes close to the childish criticisms
such as your assumptions are not realistic--as if
Arrows and Samuelsons don't know that!'

I reply: nothing childish about trying to understand reality. Note, we
can make whatever assumptions we like in our theory but we must always
consider what use the assumptions have by asking ourselves what happens
when we relax the assumptions. Relax the assumption of 'no new machine'
and an economic theory which does not recognise value becomes useless.

You write 'In no commodity I have found hours of labor being
contained like cotton or feather stuffed in my pillow.
You can break any commodity to the last atom and you
will not find your "stuff" anywhere. So what kind of
"stuff" is this? Secondly, and more importantly, how
does it explain their price magnitude? Let's not dance
around it. Let's see how far your version of the LTV

I reply: Its strange stuff, to be sure. It explains price magnitude only
by the familiar mechanism of the invisible hand (a whole different story
to my sack of potatoes). The point re. magnitude is that this mechanism
does not mean that labour time and price lack any relationship (as do,
for example, labour time and weight). That's all that is required. It
makes sense of beginning with price-value(labour time) equivalence and
then examining deviations from equivalence at more complex levels of
theory. For it gives prices meaning, as forms of value, in any
capitalist system, hence laws do apply to capitalism and we aren't left
floundering, as I fear we are according to your view.

You quote me:

This substance makes
> us spend alot of our lives dealing with it, with the
> value of things. Commodities are in general neither
> objectifications of electricity nor petrol!

And you ask, 'Why not?'

I reply: People are different from machines. We objectify our labour.
Machines don't do any labour.

You quote me:

If you
> agree that social labour is distributed in our
> society then you agree that 'labour' has a unit, and
> you are enabled to use this unit to grasp capitalism

And you ask 'What is "social labor"? And if this "social labor" is
distributed in our society then what makes you think
that electricity and petrol are not distributed in our

I reply: 'social labour' is the 'labour' part of the phrase 'social
division of labour'. Why would I deny that electricity and petrol are
socially distributed?

You quote me:
> -- no it cannot in general be directly measured,
> especially due to impossibility of assessing
> differences between labour in different industries,
> but there is a common unit (though we cannot
> empirically measure it directly) and prices do the
> job of measurement for us (very imperfectly). All
> this is much clearer once we consider capital but
> all the above is more abstract than that.

And you write, ' see how quickly it gets you in a quagmire! First you
say that the "stuff" explains their (commodities)
magnitude of prices. Then you go on to say that prices
do the job of measuring the "stuff". I see the dog
chasing his tail. And interestingly in this case the
tail is invisible since you admit that the "stuff"
cannot be measured.'

I reply: you (almost) correctly paraphrase me but the quagmire, dog and
tail are your own constructions! I'd certainly agree that value theory
isn't easy. But why presume that a theory of a complex society should be
easy? Certainly difficulty isn't a reason to give up on economics all
together, *or* to pretend that one can do economics whilst abstracting
from time! [you are not quite correct on paraphrasing me due to
complexity of the concept of 'measure' which we need not go into]

Many thanks,


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