Re: [OPE] peanut butter value-form theory

From: Alejandro Agafonow <>
Date: Tue Apr 07 2009 - 10:21:47 EDT

Ay! Jerry. You are referring to the Arrow-Debreu Model.   The Mengerian tradition, developed by Austrians, doesn’t take neither of these assumptions.   I’m not against ceteris paribus clauses per se. But some times they are not used wisely at all.   A. Agafonow ________________________________ De: GERALD LEVY <> Para: Outline on Political Economy mailing list <> Enviado: martes, 7 de abril, 2009 15:28:39 Asunto: RE: [OPE] peanut butter value-form theory > My point is that the empirical research on the issue is mistaken Zachariah, because it is built upon a > ‘ceteris paribus clause’ which has led you to think in the allegedly gravitational force of labor. You try > to devise a causal reasoning from the allegedly evidence that this research offers, but this evidence is > not legtimely because it has been reached out of an untenable assumption, i.e. technological change has > stopped on time X to let you catch up with the gap between market prices and labor costs. > This gap is filled in a dynamic theory, which doesn’t require such a ceteris paribus clause, with the > initiative of entrepreneurs who trying to foresee changes on consumers’ preferences, disrupting the cost > structure of the economy with their marketable-driven inventions. This includes inventions originally > conceived with other purposes, the potential contribution to well-being of which has been discovered by > entrepreneurs (e.g. Internet). Alejandro A: Well, I think it's ironic that you object to the use of the ceteris paribus assumption in Marxian value theory. The marginal theory of consumer choice assumes, among other things, that: - there is perfect competition; - the behavior of consumers is rational and predictable; - consumers have perfect information about the prices and qualities of any products they might purchase; - (because of the above) there is no marketing, promotion, or advertising; - and consumer preferences are exogenous. Note above in your "dynamic theory" that firms react to and attempt to foresee changes in consumer preferences. That's because consumer preferences are taken to be exogenous -  consumers are simply assumed to have preferences and there is no recognition (because of the other assumptions made) that business firms can shape and create consumer preferences (through advertising et al). The whole theory of consumer sovereignty is truly absurd and counter-factual. It presents a topsy-turvy theory of what happens in markets where consumers rather than business firms control the market. It's pure ideology. In solidarity, Jerry PS: The Internet wasn't discovered by entrepreneurs. _______________________________________________ ope mailing list

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