Re: (OPE-L) Ajit's paper

From: Rakesh Bhandari (rakeshb@STANFORD.EDU)
Date: Thu Jun 03 2004 - 08:55:25 EDT

At 5:19 AM -0700 6/3/04, ajit sinha wrote:
>--- Rakesh Bhandari <rakeshb@STANFORD.EDU> wrote:
>>  Just to clarify quickly.
>>  Ajit, you write:  "[Ricardo] found that the effect
>>  on the money
>>  commodity of a change in wages implies that even if
>>  the net output
>>  has been kept constant in physical terms a change in
>>  its distribution
>>  between wages and profits could
>>  very well change its size when measured in... money
>>  terms"?
>>  Now you don't deny that this change in size depends
>>  on the assumption
>>  that money is not only a commodity but a commodity
>>  the production of
>>  which should yield the average rate of profit
>>  enjoyed in most
>>  branches of commodity production.
>>  This is why I have asked you to specify all the
>>  assumptions that are
>>  being made about the money commodity if the curious
>>  effects that you
>>  yourself mention above are to obtain. What must
>>  money be like if this
>>  curious effect can obtain?
>There is no hidden assumption here. If money is a
>commodity, the same rules apply.

Which rules? Be clear and understandable.

>  But keep this in
>mind, even if money commodity did not yield a general
>rate of profits as other commodities, its price will
>be affected due to price affects in other

money does not have a price, as Fred has argued. And the relative
rate of profit in the money sector obviously cannot be affected if
one sets up simultaneous equations by which the rate of profit in au
production is stipulated to be the same as same rate of profit in
other commodity producing sectors.

>in this case you simply have additional
>burden to prove why and how a commodity will be
>produced in the capitalist system which does not yield

You don't understand the first thing about what is being argued, and
has been discussed on this list already.  No one has doubted that
gold is produced for profit or at least gain. One question is whether
the profit rate in gold production can be reasonably assumed to
approximate the average rate of profit--remember Bortkiewicz assumed
so in his solution to what he incorrectly claimed was Marx's
transformation problem.  Naples has argued against this assumption
for a specific reason, I for another.

>  You gain nothing but you lose a lot.

What are you saying?

>>  You have not even attempted to answer this question.
>>  As for your criticism of the infinite regress in
>>  which TSS is
>>  trapped, do note that Freeman anticipates your
>>  criticism in the very
>>  volume from which the above quote from you is taken.
>>  See Freeman on
>>  pp. 103-104 in Westra and Zuege. I won't type out
>>  all of it for you
>>  as I suppose you have the volume.
>I don't think Freeman is anticipating anything. He has
>known my criticism (along with many other critisms)
>first hand for years now. His verbal answers to me has
>been unsatisfactory. I'll read the paper you
>mentioned, once I get a little time. Cheers, ajit

Yes read the people whom you are criticizing. Especially when they
appear in the same volume in which you have been published. It's a
good course to follow. If I follow you, You think that labor values
can only be derived from technical conditions if we assume their
identity on both the input and output side (you of course resist the
conclusion that labor values are redundant even if we can go straight
to prices from technical conditions and a distributional parameter).
But while this can give us a determinate answer to the question of
unit values on the basis of an explanans (technical conditions) that
is not itself contained in the explanandum (unit values), it is a
spurious clarity as it is absurd to assume (however mathematically
necessary) unit labor value is the same on the input as on the output
side. As Ricardo himself notes, unit labor value is changing daily.
Freeman argues that any mis-estimation of unit input values will die
down in the course of many temporal sequences. And this for a
specific mathematical reason. Please speak to what he is saying.


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