Re: [OPE-L] Ajit Sinha II

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Tue Jul 10 2007 - 18:50:28 EDT

I think he was just saying that balance of supply and demand was one of
the necessary conditions for prices to equal values - more precisely for
the expected price to equal value - since in a non degenerate
distribution it will have a non zero probability of corresponding even
under an imbalance.


From: OPE-L [mailto:OPE-L@SUS.CSUCHICO.EDU] On Behalf Of Jurriaan
Sent: 09 July 2007 22:50
Subject: [OPE-L] Ajit Sinha II


Ajit argued a long time ago (against Jim Devine):


"Value" is defined at the point where there is no realization problem.
Whenever supply and demand (and they are not demand and supply
schedules) do not match, market prices
diverge from value.


I do not know if he still believes that, but I don't think it follows,
unless you make it a tautology. I think supply and demand (on some
definition) could match, even although market prices and values diverge.
That is, the value/price divergence may have not necessarily have to do
with supply-demand fluctuations. At most you could say that In Marx's
model, if supply and demand match, goods sell at production prices. But
these production prices may still diverge from values.


It's almost as though Ajit thinks here that supply-demand balance and
equal exchange are the same thing, and I don't think they are. 


A case to which Marx refers is the unequal exchange of industrial and
agricultural goods (their terms of trade). The output of agricultural
goods could be fairly stable (bar the odd bad harvest) and the demand
for agricultural goods could be fairly stable, yet agricultural goods
trade below their value and industrial goods trade above their value.



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