[OPE-L:5133] Re: Can Ajit's price theory fly?

Ajit Sinha (ecas@cc.newcastle.edu.au)
Tue, 27 May 1997 21:56:13 -0700 (PDT)

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Mr. kliman,

As you have yourself said, no amount of arguments can persuade you, that's
why I don't think there is much point in arguing with you. I gave you the
numbers, but as I said you understand too little. Is that my fault? In my
response to you, you cut out the last part of the numbers I gave you. This,
of course, is your old trick. But if you look at those numbers, you will
learn the absurdity of your position. Time and time again I have said that
price is a measure at one point of time, but you want me to maintain that
price of a commodity remains the same eventhough it has changed over time.
Why? because lay people think that way. What kind of argument is that? Let
me give you an example, When you buy a new car and drive it out of the lot,
you know that it immediately loses some value. Let's say you bought a new
car for $20,000. It is one day old and still in mint condition. If I ask you
what is the price of your car, you probably would say $20,000. It would be
okay in lay peoples world. However, for an economists the price of your car
is not $20,000 but something like $19500, because that's the price you would
get in the market. And this is a simple point, which you don't seem to

As far as your claim that TSS people will never be persuaded by my argumets,
I can only say that other members of this so-called approach are probably
not completely a closed mind as you apparently are. My sense is that my
arguments are having a lot of effect on people like Alan Freeman, John
Ernst, and others. The fact of the matter is that your approach is absurd is
now beyond doubt, and this must have been noticed by anybody who is watching
closely. You yourself, deep in your heart, are aware of this fact. That's
why you have moved from defending your approach to a Challenge to 'my'
theory. 'My' theory is not my theory (I wish it was). No serious minded
economist, to my knowledge, has found flaw in the Sraffian theory of prices.
Your kind of criticism only shows that you haven't understood the problem,
and also have not even read Sraffa with any care. Let me quote Marx here:
"Ignorance can never be an argument!". You should also keep in mind that
even if "my' theory is false or inconsistent, it will not make your theory
any more less absurd because of it.

Cheers, ajit sinha

At 07:09 PM 5/27/97 -0700, you wrote:
>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