Re: [OPE-L] standard commodity

From: Andrew Brown (A.Brown@LUBS.LEEDS.AC.UK)
Date: Mon Mar 21 2005 - 11:58:41 EST


You wrote: 'So from your example, 1 mars bar = 1/1000 car, 1
airplane = 100 cars, 1 television = 1/200 cars. Now
let us suppose that after technical change we have 1
mars bar = 1/1005 cars, 1 airplane = 90 cars, 1
television = 1/190 cars, and 1 "new good" = 20 cars.
Now can we at least say that the price of mars bar in
terms of car has fallen, the price of airplane in
terms of car has fallen and the price of television in
terms of car has risen? If not, why not?'

I reply: Yes you can. What you can't do is say what has happened to the
'exchange value' or 'purchasing power' of any particular good, in the
face of new goods. A numeraire is, I take it, an index of exchange
value, for what other general significance can it have absent value

The exchange value of a good is a vector containing the quantities of
all other goods for which the good in question will exchange. The
incommensurability of exchange value before and after technical change
is therefore obvious. What do you think exchange value is? The problems
of measuring inflation and 'GDP' (so called index number problems) are
where all these issues become nice and clear. 

You wrote 'I simply don't understand why? What do you mean by

I reply: I can't compare apples to oranges without reducing them to some
common third factor that they both possess, say their weight.

You quote me, "What is that other thing?.... it is value!! In other
words, your strong intuition that the addition of one
or two new goods isn't that 'significant' is in fact a
display of your implicit belief that there is a real
thing called 'value' that is distinct from exchange
value! This is why a theory of value is central to
economics." And you write 'Your above statement makes absolutely no
sense to me'.

I reply: well, have a think about it!

You wrote, 'How do you move to aggregates and averages when you
are dealing with relative prices of commodities?
Wasn't that the subject matter we were dealing with?'

I reply: you asked me about the relation between labour times and
prices. Labour time entails an intrinsic value notion so it is natural
to consider both relative and absolute values.

You quote me: "Economists from Ricardo (93%) to Joan Robinson (let
alone your co-author, as Rakesh appropriately pointed
out) seem agreed on this." And you write: 'Forget about "economists".
First of all, I have read a
few economists too and I'm in a business of
interpreting real good and tough ones and so there is
no need to get side tracked on interpretation issues.
Secondly, as you know, I'm a pretty arrogant sort of a
chap. I don't care what sort of a name you throw at
me, if I disagree I would be happy to argue with the
person rather than argue second hand. So the best way
to get anywhere with me is to develop your own
arguments without throwing names.

I reply: I was trying to indicate the nature of my position by reference
to a wide strand of economic thought. This is not an appeal to
authority. What do you think the relation between labour times and
prices is? Have a chat with your co-author!

You quote me. "On 'measure' I mentioned that you haven't quite
parahprased me correctly. We can't 'see' the weight of
an object but it still has weight doesn't it? We could
measure it on a pair of scales, using 'weights'. These
'weights' are analogous to prices and are the
'external measure' of weight. The immanent, invisible
measure of weight is the quantitative aspect of the
force of weight (gravity) itself (in units appropriate
to this force). This immanent measure is analogous to
labour-time. It's a useful analogy but like all
analogies it ain't perfect....   Still mumbo-jumbo?"

And you reply, 'Yes! Because I can change "labor-time" with anything I
want and the analogy will remain intact. In any case,
an analogy is not a substitute for a theory. All it
can do is to help someone understand a theory. You are
smart enough to know that all this is mumbo-jumbo, so
I don't understand why you are writing them. You are
simply either not reading them after writing or not
thinking about the nature of the problem you are
dealing with. If you are someone who can read Marx,
Sraffa, Wittgenstein, Hume, and others and claim to
have some understanding of them, then you must be able
to think through your own thoughts. How can you
present this kind of unorganized thoughts as an
alternative to serious work like Sraffa's? You have to
be more serious than that. I am trying to force
people, particularly modern day "value theorists", to
think clearly on important theoretical issues for
their own good. It is no good to oppose ajit sinha
without any understanding of the issues involved, as
Rakesh does.'

I reply: you asked me about the problem of the 'invisibility' of value.
So I gave an analogy involving something else (weight) which is
invisible. This shows, amongst other things, that there is no inherent
problem with positing invisible forces or substances (assuming that we
agree on the existence of 'weight'). If you have some other problem with
value than invisibility, then fire away but I can only reply to what you
ask me. 

Yours humbly!


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