[OPE-L:6280] Historical, real and current costs

Sun, 15 Mar 1998 14:58:58

A reply to the PIAF:

> Date: Sun, 15 Mar 98 17:53:35 UT
> From: "andrew kliman" <Andrew_Kliman@CLASSIC.MSN.COM>
> To: ope-l@galaxy.csuchico.edu
> Subject: RE: [OPE-L] Historical, real and current costs

In his exchange with Jerry, Andrew J. K. writes:

> It is possible that proponents of the simultaneist MELT would not
> say that the profit of March 14 is -$1. I suspect that, if they
> do not, they will reason as follows: 2% deflation occurs between
> the time wages are paid and the time the output is produced and
> sold. So, to get *real* profit, one needs either to deflate the
> wages by 2% or "reflate" the revenue by 2%. In either case,
> real profit will be positive.

Or you can "simply" measure the whole thing in terms of inter-
temporally comparable labor-time, i.e. in the intrinsic measure of
value: at 9 p.m., the 100 widgets are worth 100 hours; workers were
paid at 5 p.m. by means of money representing 99 hours, so that
surplus labor is 1 hour.

> I accept this reasoning. In fact, this is exactly what the
> temporalist MELT does.

Two questions:

1. Do you think that a possible cause of deflation is a reduction in
the issue of paper money by the Central Bank?

2. Why do you think that the New Interpretation people could be
reluctant to accept the reasoning in terms of deflation/inflation?
In some sense this kind of reasoning is almost "common sense" in
"Economics". The problem is, perhaps, that they don''t see the
connection between this common phenomenon and the temoralist MELT.
Or, perhaps, they are Bailey-followers in the sense that considering
that intertemporal comparison of value are (conceptually) imposible,
despite the fact that those comparisons are a everyday fact in

Andrew: Thanks for your stimulating posts.

To Jerry: The revolutionary whose death was commemorated yestarday is,
of course, Karl Marx. By chance, yesterday I received a copy (sent by
Alfredo S-F, thanks Alfredo!) of John Cassidy''s article The Next Big
Thinker, published in The New Yorker, Dec. 7, 1997. It is a worth
piece to read and maybe someone has transcribed it in electronic
form. I think the members of the list would find useful to have a
copy. Of course, there is a big mistake, attributing Marx''s theory
an "internal inconsistency", something that many Marxists consider a
"minor point", although it has an enormous impact on the common

Alejandro Ramos