[OPE-L] equilibrium

From: ope-admin@ricardo.ecn.wfu.edu
Date: Tue May 08 2007 - 19:00:47 EDT

A comment below from Jurriaan, who is taking a temporary vacation from
the list effective today.  /  In solidarity, Jerry

------------------------ Original Message ----------------------------
From:    "Jurriaan Bendien" <adsl675281@tiscali.nl>
Date:    Tue, May 8, 2007 5:33 pm
<snip, JL>
One simple observation I had I will mention about the equilibrium
discussion, while I'm writing anyway. I think we always have to be clear
about what is being equilibrated. The suggestion is in effect often that
"the market" (or indeed the law of value) equilibrates the society as a
whole, and thus the equilibrium question seems to become a way of explaining
how social order occurs. However I think we should bear in mind that as a
matter of fact an enormous amount of non-market activity has to occur in
order for markets to function at all, including the activity of the public
sector among other things. Many studies have been done e.g. of domestic
labour, which, if valued at market rates, would be roughly equal to total
personal cash income in the economy. That gives you an indication of
proportion. But domestic labour is only one part of all the non-market
activity. In addition, at any time the majority of goods/assets held in an
economy are not being traded anyway. So really you cannot say that market
equilibrium on its own, however defined, can be the structuration principle
that ensures social order. I think personally that what Marx meant is, that
the bourgeois society was usually in equilibrium so long as its property
relations could be securely enforced and protected - it was really the
"relations of production" that were the foundation of the social order - so
long as they were reproduced, the society could continue to function, even
through quite large market fluctuations, job losses etc. But this kind of
equilibrium is more a condition of social stability rather than a market
equilibrium, and really it is precisely the fact that markets aren't in
equilibrium - i.e. that supply and demand don't match to some or other
extent - that explains a lot of economic behaviour... the mystery of
equilibrium arises because it is difficult to understand how a myriad of
independent transactions carried on simultaneously could spontaneously
result in an overall balance, but if we consider the total context in which
people have to constantly recreate their material and social conditions of
life in a reasonable way, whatever happens, a lot of the mystery disappears.

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