Re: [OPE-L] standard commodity

From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Sun Mar 20 2005 - 01:20:19 EST

--- Andrew Brown <A.Brown@LUBS.LEEDS.AC.UK> wrote:

> 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
> point?
Simply because what you are saying is gross
exaggeration and nowhere close to the "real world" you
want to champion. In no economy all the outputs of the
production process are qualitatively "new goods" and
different from what they were as inputs. A few new
goods may come up but they are not large in numbers,
and there is no problem in dealing with their pricing
by treating them as non-basics. Usually quality of a
good might show a good deal of change if you compare
the two goods at distant points in time but from year
to year they are qualitatively almost
indistinguishable. I don't know where you are getting
this fetish from that economies only produce machines
and the machine producing factories are producing
qualitatively completely new goods every production
cycle. It sounds like science fiction to me. It is, of
course, obvious that one cannot compare prices of a
qualitatively new good with any previous prices, but
this does not mean that if there are some
qualitatively new goods in the system it ipso facto
invalidates comparison of prices of all other goods
that have remained qualitatively the same.

 Now Im not going to respond blow by blow since it is
getting too long and your message is getting truncated
and also I can see that you are simply repeating
yourself. So in a few words, as far as your point
about new machines and technical change is concerned,
my answer is that we can easily add machines on the
input side and a few new machines and old machines on
the output side as joint products. This would only
complicate our equations but will not change the
results. Actually I had thought that Ill get my
expected results only in joint production cases and I
was pleasantly surprised when Paul got the result for
even singly produced good cases. Actually getting such
a result in a simple case is much stronger than
getting it in a more complicated case.

Now, let me make a brief comment on your rendition of
the LTV. You say:

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.

Is this what you are presenting as an alternative to
Sraffa? I know you are intelligent enough to know that
what you have written is pure mumbo-jumbo. But let me
try to get back to some meaning step by step. You say,
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. My question is:
what is this relationship between labor-time and
price? And particularly when, according to you, this
labor-time cannot be measured? Cheers, ajit sinha

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