Re: [OPE-L] standard commodity

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sun Mar 20 2005 - 21:50:09 EST

Ajit wrote:

>Simply because what you are saying is gross
>exaggeration and nowhere close to the "real world" you
>want to champion. In no economy all the outputs of the
>production process are qualitatively "new goods" and
>different from what they were as inputs.

Yet for Schumpeter such product/process innovation is the centrepiece of
capitalist as opposed to non capitalist dynamics. 
Yet another reason why the Sraffian formalism 
seems to have missed its putative object, the 
other reasons including the postulation of what 
Albritton or the Uno school has called the fodder 
theory of wage, the non barter character of 
exchange, the reduction of money to a numeraire 
and of course the stipulation of input prices 
being equal to output prices.

But if you then say that the formalism was not 
meant to explain capitalist dynamics but rather 
serve as an immanent critique of GET--a position 
you only sometimes hold--then it seems to have 
failed here too. As Sen points out, Sraffa only 
proved successful in undermining some parables.

I think your messages leave quite unclear as to 
what kind of thing you are defending Sraffian 
theory. In fact  your posts are manifestly 
contradictory. Faced with the irrealism of the 
theory, you say that it was only meant as an 
immanent critique of GET. Faced with the 
sterility of a mere immanent critique, you claim 
that it can handle real world problems, and 
suggest ways in which to do so. And then faced 
with the critique that simultaneous equation 
formalism misses the most important general 
features of its object, you then claim that all 
theory is equally unreal.

>A few new
>goods may come up but they are not large in numbers,

But they may be of greater importance than their numbers indicate!

>and there is no problem in dealing with their pricing
>by treating them as non-basics.

Even if they are not non basics? Forcing the 
world into the mould of theory, no?

>Usually quality of a
>good might show a good deal of change if you compare
>the two goods at distant points in time but from year
>to year they are qualitatively almost
>indistinguishable. I don't know where you are getting
>this fetish from that economies only produce machines
>and the machine producing factories are producing
>qualitatively completely new goods every production

The fetish of novelty is built into capitalist dynamics.

>  It sounds like science fiction to me.

You must be kidding. No wonder Hodgson left 
Sraffa behind if his option was to say silly 
things like that!

>  It is, of
>course, obvious that one cannot compare prices of a
>qualitatively new good with any previous prices, but
>this does not mean that if there are some
>qualitatively new goods in the system it ipso facto
>invalidates comparison of prices of all other goods
>that have remained qualitatively the same.

Identity of final product does not indicate of 
identity of the respective processes by which 
they were made.

>  Now Im not going to respond blow by blow since it is
>getting too long and your message is getting truncated
>and also I can see that you are simply repeating
>yourself. So in a few words, as far as your point
>about new machines and technical change is concerned,
>my answer is that we can easily add machines on the
>input side and a few new machines and old machines on
>the output side as joint products.

And how does this solve the problem of 
commensurability? And why are you suggesting all 
these quasi realistic emendations if Sraffa only 
meant a critique of GET?

>  This would only
>complicate our equations but will not change the
>results. Actually I had thought that Ill get my
>expected results only in joint production cases and I
>was pleasantly surprised when Paul got the result for
>even singly produced good cases. Actually getting such
>a result in a simple case is much stronger than
>getting it in a more complicated case.
>Now, let me make a brief comment on your rendition of
>the LTV. You say:
>Its strange stuff, to be sure. It explains price
>magnitude only by the familiar mechanism of the
>invisible hand (a whole different story to my sack of
>potatoes). The point re. magnitude is that this
>mechanism does not mean that labour time and price
>lack any relationship (as do, for example, labour time
>and weight). That's all that is required. It makes
>sense of beginning with price-value(labour time)
>equivalence and then examining deviations from
>equivalence at more  complex levels of theory. For it
>gives prices meaning, as forms of value, in any
>capitalist system, hence laws do apply to capitalism
>and we aren't left  floundering, as I fear we are
>according to your view.
>Is this what you are presenting as an alternative to
>Sraffa? I know you are intelligent enough to know that
>what you have written is pure mumbo-jumbo. But let me
>try to get back to some meaning step by step. You say,
>The point re. magnitude is that this mechanism does
>not mean that labour time and price lack any
>relationship (as do, for example, labour time and
>weight). That's all that is required. My question is:
>what is this relationship between labor-time and

Again how can you say this given your cowriter's work?
  If 3x=100y at year 1 and x=2y twenty years 
later, the most important factor accounting for 
the intertemporal change in exchange ratios will 
most often be differential changes in labour 
productivity. Do you repudiate your own 
cowriter's work without even mention of it?

How do you propose that we explain changes in 
exchange ratios over time? By changes in the 
distribution of income or changes in the 

But Marx's explanandum was not exchange ratios, 
at any rate. It was to explain important macro 
features of capitalist development on the basis 
of the law of value. Grossman showed how 
successful Marx was.

>  And particularly when, according to you, this
>labor-time cannot be measured?

Again Ajit it's the ABC's of Marx's qualitative 
value theory to answer the question of how it is 
labor time can be represented and distributed 
when the relations between individuals 
interpellated as juridical subjects is mediated 
through commodities. Labor time can be measured, 
has to be measured; the question is how is it 


>Cheers, ajit sinha

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