Re: [OPE] [1] Marxian equilibrium & reply to Wright.

Date: Sun Feb 10 2008 - 13:57:39 EST

> Dear Dave:
> Market doesn’t lack criteria to redirect labour toward the production of
> useful effects. Such criteria are lacking in Marxist theory of the market.
> It is not true that (1) market prices tend to be proportional to their
> values. The truth is just the contrary, that is, (2) that values tend
> imperfectly to be proportional to market prices. Values spin around market
> prices.
This latter is a quite remarkable proposition.
It implies that if, due to a temporary shortage, market prices rise, then
the labour required to reproduce a commodity will also rise.
Why should technology get worse just because market prices have risen?

The only  example of this is commodities for which production
can only be expanded by using less fertile land, less productive
mines etc. But :
a) This is examined and dealt with by the Ricardian theory of rent which
   is taken over by Marx
b) These sorts of commodities make up a diminishing portion of production
   from the start of industrial production. Most products tend to show
   increasing returns to scale.

Thus for most products the direction of movement imposed by labour values
is contrary to that produced by a temporary imbalance of demand over supply,
so it seems the classicals were correct in pointing to the labour required
as being the driving force.

If your account were right, the oscillations on the market would be
completely undamped and values would either tend towards infinity or
towards zero.

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