[OPE-L:31] [OPE-L:257] Re: Re: Re: Re: Chapter 1

Ajit Sinha (ecas@cc.newcastle.edu.au)
Fri, 30 Oct 1998 12:41:26 +1100

At 12:56 29/10/98 +0000, Paul C. wrote:

Ajit Sinha:
>I don't think
>>exchange relation is necessarily an RST--a point I think Gil had made
>>earlier. x does not exchange against x, and if x exchanges against y and y
>>exchanges against z, it does not mean that x exchanges against z. You may
>>always require y to mediate.
Paul C.
>Are you serious about this, do you really think that the value of
>1 kilo of gold is not represented by one kilo of gold?
>If that were not true, then one kilo of gold must exchange for
>more or less than one kilo of gold. It thus implies that by
>exchanging gold with gold one person could become arbitrarily richer.
>If that were possible, there would be no problem in explaining the
>origin of profit.

"Value of one kilo of gold" in terms of what Paul? One needs to know what
does "value" mean. The question we are concerned here is exchange between
two commodities, and what kind of inferences we can draw from it. One kilo
of gold does not exchange against one kilo of gold in market--it would be
contrary to the very idea and purpose of exchange. That's why market
exchange relationship is not reflexive.

On transitivity, I was not alluding to the problem of arbitrage, which both
Gil and Duncan have mentioned. My point is even simplier, and may be wrong
but I don't think so yet. Let's suppose coal exchanges against steel and
steel exchanges against coal. Furthermore dynamite exchanges against coal
and coal exchanges against dynamite. This does not imply that steel will
exchange against dynamite and dynamite will exchange against steel. Simply
because these two industries don't need each others goods. So exchange
between these two commodities can only be carried out through the use of
coal as money. And this destroys the transitivity axiom for exchange of

Once you have money in the relationship, then of course you can say that so
much of steel and so much of dynamite are equal in value in terms of coal
(money). But such statements are generally charecterized as "trivial",
meaning it does not add anything to our knowledge. Cheers, ajit sinha

>Paul Cockshott Dept Computer Science University of Glasgow