[OPE-L:5241] Re: Censoring Ajit?

Ajit Sinha (ecas@cc.newcastle.edu.au)
Thu, 12 Jun 1997 01:07:39 -0700 (PDT)

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At 01:13 PM 6/10/97 -0700, Andrew Kliman wrote:

>A reply to Ajit's ope-l 5228.
>Ajit: "One set of numbers are 1:1 price ratio and 33.3% rate of profit. And
>as I had pointed out in my response, this is the correct set of numbers."
>No it is not. I showed that it is not in my ope-l 5146 and why it is not.
>However you are measuring prices (it doesn't matter how), if the relative
>output price of period -1 is 1/2 and the input prices of period 0 must equal
>the output prices of period -1, then the relative input price of period 0
>cannot be 1/1. You need to try again.

I don't need to try again. You need to learn some basic economics. How many
times one has to tell you that when you are measuring output prices, the
input prices must be measured by how much of those output would take to
replace the inputs used up in the production process. This is the 'real'
measure of the input prices. Your statement that "NO it is not" is based on
your mickey mouse business, where the value or price of your dollar remains
the same even when prices have changed. Didn't you understand that in your
formulation your prices in the output period remains indeterminate. You
yourself came up with your price ratio of p1 = 5/7p2, didn't you? As we say
in India, you can take a horse to a pond but you can't make him drink.

>Ajit: "This time you come up with a term "non-price determinants of prices",
>which supposedly remains the same for the two transaction periods. This you
>think is your trump card, and you suggest that since I do not understand this
>sophisticated theoretical concept, I make many mistakes. But I'm sorry to
>inform you my friend, there is no such thing as "non-price determinants of
>prices" in this whole universe, and there cannot be one. Prices cannot be
>expressed in anything else than something which itself has price."
>You misconstrue. To say that the non-price determinants of prices do not
>change simply restates the original situation you posed at the ASSA in New
>Orleans: "nothing in the world changes" between two periods (except prices);
>therefore (you claim), the prices of these periods must be the same; "you
>cannot have a theory of prices that determines prices from prices."

If nothing in the world changes then prices cannot change either, unless
prices are some autonomus things that keep changing randomly. So your term
in the prenthesis (except prices) is meaningless, and therefore your
question and challenge etc. evaporates right there. So obviously if prices
have changed, then what you are trying to say now that what you meant by
"non-price determinant of prices" must change. And they do change in your
example, the change in the technology between period (-1,0) and (0, 1),
otherwise you wont have your so-called challenge to begin with. So what the
hell you mean in your last post that I make mistake because I don't
understand that in your challenge example non-price determinant of prices
remain the same? So I do not misconstrue. Your statement in the earlier post
means exactly what I said. I seriously believe that I understand what you
write much better than yourself. By the way, to say that prices are
determined by input output data which are given in physical units does not
mean that these input outputs do not have prices. It only means that all the
prices of inputs and outputs are determined by those physical data.
>Ajit: "The set of your prices in the current year is determined from the set
>of prices in the previous year. This leads to the infinite regress of the
>determinants of prices in the current year. To avoid this, you arbitrarily
>assume that some time in the past the prices of inputs and outputs are equal.
>You have not defended this arbitrary assumption, which amounts to internal
>inconsistency of your theory. And once you relax this arbitrary assumption,
>there is no way out of the infinite regress. That's why I say, you cannot have
>a theory of prices that determines prices from prices."
>First things first. You have also said, and in fact this was your FIRST
>criticism, that if nothing in the world changes between two periods, the
>prices (both input and output prices) of the two periods must be the same, and
>therefore "you cannot have a theory of prices that determines prices from
>prices." I.e., in neither period can the input and output prices of the
>period differ. It is that criticism that we are presently discussing. I
>painstakingly proved you were wrong, but you apparently didn't understand, so
>I decided that argument and explanation were no longer of any use, and that
>you'd have to prove it to yourself. Hence the challenge.

Look Andrew, I cannot go on wasting my time arguing with you on this issue
any more. Alan Freeman wrote to me privately and suggested that he thinks
that my criticisms of the TSS approach are of very serious nature, and you
guys have to come to terms with it. He has proposed to me to write a lengthy
critique which he would like to circulate among the TSS people, and may be
have a debate at the next ASSA or EEA. Even though my next semester is a
killer semester in terms of work, I have accepted his proposal. So let's
leave it at that.

Cheers, ajit sinha