[OPE-L:5132] Can Ajit's price theory fly?

andrew kliman (Andrew_Kliman@msn.com)
Tue, 27 May 1997 19:09:24 -0700 (PDT)

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In ope-l 5117, Ajit wrote

"A theory of prices is necessarily a static problem."

So you assert. You could also assert that "elephants can fly." I consider
these equally absurd propositions. "I don't think it is incumbent on me to
present any explanation for [the contrary proposition]. If you say that
elephants can fly, which is what you are insisting on, then any reasonable
person would expect you to present some reason for it. You have not done so.
So I think there is a job cut out for you Mr. [Sinha]."

Perhaps you think the following is a "reason": "Prices only tell us how the
different sectors of the economy are interrelated with each other. That's why
it is a ratio--an exchange ratio. We need a theory of prices to understand the
structure of an economy at any given time. " I do not. It is either false,
or merely a *definition* of prices that excludes most of what normal people
mean when they speak about prices. It it is not false, it supports your
"elephants can fly" proposition only in the sense that it renders it a
tautology: "A theory of [the structural interrelations of an economy at any
given time] is necessarily a static problem."

So you see, Ajit, we aren't going to get anywhere with this empty rhetoric of
"absurdity" and "reasonable people." TSS is rubber, you're glue. Whatever
you say bounces off us and sticks to you.

Because neither side will be able to *persuade* the other, what we need to do
is to TEST different theories and different interpretations of Marx's value

I put forth a test of the internal consistency of your theory. You hold that
if "nothing in the world changes from period zero to period one ... the prices
in period one would remain the same as the prices in period zero." You also
hold that it is a "tautology" -- this is YOUR OWN term -- to say that "A
commodity cannot have a price as the output of one production period, and
another as the input of the next period, since there is only one transaction."
If your static price theory is *necessary*, it must also be *possible*. I do
not think it is even possible, because I think that these two propositions --
BOTH of which YOU maintain -- contradict one another. I have challenged you
to show that I'm wrong, i.e., to show that your theory is even a logical
possibility, by producing a set of numbers which does not contradict one of
these two propositions (or the simple auxiliary propositions).

You have not yet done so.

The question is, CAN you do so? If you can, why haven't you done so yet?
More than seven days have elapsed so far. How many more will elapse?

I'll make this question my new quiz: how many days will it be before Ajit
produces a set of numbers that vindicates, not even the necessity, but only
the mere internal coherence, of his own value theory? Please submit your
entries to me over the list or privately. The quiz is open to both
listmembers and nonmembers. The winner is the person who comes closest
without going over (though I wouldn't worry much about the "without going
over" part). The prize is a hardcover copy of _Marx and Non-equilibrium


Andrew Kliman