Re: [OPE-L] standard commodity

From: Andrew Brown (A.Brown@LUBS.LEEDS.AC.UK)
Date: Tue Mar 08 2005 - 09:40:15 EST

Thanks to Paul and Ajit,

Have always been intrigued by Ajit's interpretation of Sraffa (I speak
as an interested layman on Sraffa). Paul, I did not think you subscribed
to Ajit's interpretation. I thought you held a labour theory of value. I
thought that Ajit, by contrast, takes Sraffa to show us that no theory
of value, in any accepted sense, is possible (time -- technical change
-- takes us from one 'system' to another, analogous to moving from one
'language game' to another, hence rather disabling economic science).
But the conclusion to this paper talks about a fundamental limitation on
economic science as such, in line with Ajit's view, thus I am puzzled
that you (Paul) should subscribe to it. No doubt I have misinterpreted
both of you - so apologies in advance for that... 

To my inexperienced mind, a more fundamental point than the one you make
in this paper is that 'technical change', in the real world, involves
change in the goods produced (e.g. a new machine). Given such a change,
then you can't compare prices before and after change (as you do in the
paper, by keeping the economy's goods qualitatively identical) can you?
Albeit this doesn't provide the immanent angle on general equilibrium
theory, but perhaps it makes Ajit's point more forcefully, when it comes
to practical (real world) considerations? Or, more likely, I have got
something wrong somewhere.

On a related aside, perhaps you can help me with the following. The
Okishio theorem tells us that viable technical changes cannot lower the
rate of profit. But how can this tell us about 'real world' technical
change, where, say, a new good is introduced? As far as I can see it can
tell us nothing about such a case, but no doubt I have got all this
horribly wrong (people as far apart as Steedman and Fine seem to me to
have stated that 'empirically' the rate of profit can only fall if real
wages rise).

Many thanks,

-----Original Message-----
From: OPE-L [mailto:OPE-L@SUS.CSUCHICO.EDU] On Behalf Of Paul Cockshott
Sent: 08 March 2005 12:08
Subject: [OPE-L] standard commodity

 Ajit and I have written a paper on the significance of the Standard 
commodity which, with Gerry's permission I am posting to the list.

It is at:

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