# [OPE-L:7135] [OPE-L:637] Re: Relational properties of exchange with money [OPE-L

Ajit Sinha (*sinha@cdedse.ernet.in*)

*09 Mar 99 16:47:38 IST (+0530)*

Alan wrote:

*> Mainly a response to Brendan but also dealing with one point of*

*> Ajit's ("do*

*> you have a theory of price"?)*

...

*> the following*

*> three propositions about a value relation are equivalent:*

*> *

*> (i) value is a linear/distributive function of use-value;*

*> (ii)value is conserved in exchange*

*> (iii)any relative price may be represented as a ratio between the*

*> values of*

*> the baskets on each side of an exchange-relation between baskets*

*> that can be*

*> found in the same exchange-class. In particular we may in this*

*> way define*

*> 'unit prices' in value terms for any given use-value, or basket*

*> of use-values*

*> of constant proportions. We may thus 'explain' price in terms of*

*> value.*

*> *

*> In consequence I think any function of use-value satisfying the*

*> above axiom*

*> will yield the following:*

*> *

*> (i) u is conserved in any complete system of exchange relations,*

*> that is, any*

*> set of exchanges in which the basket of use-values is the same on*

*> both sides*

*> of the equation;*

*> *

*> (ii)we may establish a correspondence between sets of relative*

*> prices and*

*> transfers of u; any vector of prices p induces a set of transfers*

*> of value*

*> between agents or, dually, between stocks of use-values, such*

*> that these*

*> transfers sum to zerp.*

*> *

*> In brief reply to Ajit, then, a 'theory' of prices is the above*

*> correspondence; it is an explanation for prices in terms of a*

*> redistribution*

*> of a conserved magnitude, value.*

___________________

How is your "value" determined? and what is the unit of its

measure? Cheers, ajit sinha