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A bit more on Ajit's rejection of the NI:
>Duncan K. Foley wrote:
>> Some followup on Ajit's "small comments":
>> >Duncan K. Foley wrote:
>> >> Since there's been some further discussion of the "New
>> >> Interpretation" on the list, I'd just like to clarify a couple of
>> >> points.
>> >> The NI consists of the following observations. If you think that
>> >> money represents labor time quantitatively, there has to be a
>> >> coefficient relating money to labor time in any commodity-producing
>> >> society at any particular time (the Monetary Expression of Labor
>> >> Time, or its inverse, the Value of Money). If you believe that value
>> >> is created by the expenditure of living labor, this ratio has to be
>> >> the ratio of value added to labor expended. If you further want to
>> >> regard money profits as representing unpaid labor time, then
>> >> mathematically you must regard the value of labor power as the money
>> >> wage multiplied by the value of money: the two ideas are logically
>> >> equivalent.
>> >Four small comments:
>> >(1) But this cannot be taken as either as a "solution" to or an
>> >"interpretation" of the transformation problem. The transformation
>> >problem, I think, is fundamentally about a theory of prices of production
>> >and a relation of labor exploitation to profits. In your interpretation,
>> >the theory of prices of production is simply not addressed.
>> This point has been made explicitly by Dumenil and me many times. The
>> NI is, of course, consistent with prices of production and equalized
>> profit rates, or any other model of competition and price formation.
>So you will accept Sraffian prices as Marx's prices of production as well?
>Now, in theory, if you take these prices to measure the 'money' value of net
>output, then the total 'money' value of net output would depend on the choice
>of the money commodity. And to that extent your "m" will become arbitrary. If
>you say that "m" is an empirical measure and could not be determined by the
>theoretical prices, then it is compatible with any theory of prices under the
>sun since it has nothing to do with theory of prices.
I agree that the NI has nothing to do with a theory of prices.
> This is my problem. I
>don't think the transformation problem can simply wash its hand off having a
>specific theory of prices. A theoretical analysis of capitalism requires a
>theory of prices, and thus Marxian economics needs a theory of prices if it
>wants to be serious about analyzing capitalism.
>So do I, but the NI is not about competition and the theory of
>prices, it's about the definition and measurement of the Marxian
>aggregate categories of paid and unpaid labor and variable capital
>and surplus value. It seems to me that any theory of prices and
>competition would have to be at a different level of abstraction
>from the theory of value in the aggregate. The equalization of the
>rate of profit (Smith's view, taken from earlier political economic
>writing) is a powerful and plausible starting-point, but can't be
>taken as a universal and concrete theory of competition.
-- Duncan K. Foley Leo Model Professor Department of Economics Graduate Faculty New School University 65 Fifth Avenue New York, NY 10003 (212)-229-5906 messages: (212)-229-5717 fax: (212)-229-5724 e-mail: firstname.lastname@example.org alternate: email@example.com webpage: http://cepa.newschool.edu/~foleyd
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