Re: [OPE-L] Ricardo on the value of manufactured goods, or does the tail wag the dog?

From: michael a. lebowitz (mlebowit@SFU.CA)
Date: Sun Apr 10 2005 - 09:53:26 EDT

At 05:00 10/04/2005, Phil cited Ricardo:

>Having fully acknowledged the temporary effects which, in particular
>of capital, may be produced on the prices of commodities, as well as on the
>wages of labour, and the profits of stock, by accidental causes, without
>influencing the general price of commodities, wages, or profits, since these
>effects are equally operative in all stages of society, we will leave them
>entirely out of our consideration, whilst we are treating of the laws which
>regulate natural prices, natural wages and natural profits, effects totally
>independent of these accidental causes. In speaking then of the exchangeable
>value of commodities, or the power of purchasing possessed by any one
>commodity, I mean always that power which it would possess, if not
>disturbed by
>any temporary or accidental cause, and which is its natural price.

to support his argument that 'Differences in technology are temporary and
changes soon
spread throughout an industry.'

         I think the passage refers to supply shocks and demand shifts---
ie., before market forces remove temporary or accidental deviations of
market price from natural price.

Michael A. Lebowitz
Professor Emeritus
Economics Department
Simon Fraser University
Burnaby, B.C., Canada V5A 1S6

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