Re: [OPE-L] standard commodity

From: Ian Wright (iwright@GMAIL.COM)
Date: Tue Mar 22 2005 - 23:39:54 EST

Paul, Ajit

I still think that the idea of a non-basic system sitting on top of
the basic system is an artefact of Sraffa's separation of income
distribution from physical distribution. I see no other way of looking
at it. To drop this criticism I need an argument why it is ok to
represent household consumption by a scalar wage and scalar profit,
but completely ignore the physical composition of that consumption,
which is what Sraffa does in his basic price equation. I may be
talking out of my hat, but that is the way I see it.

Also, have either of you read Chp 7 of Christian Bidard's "Prices,
Reproduction, Scarcity" (Cambridge, 2004), entitled "Ricardo's theory
of value"? In that chapter he constructs a standard commodity that is
invariant to changes in technical change (not distribution). He also
uses the device of incorporating the real wage into the input matrix.
He argues that Ricardo confused the idea of an absolute value with an
invariable standard of value. Bidard makes the point that an
invariable standard of course cannot exist if all commodities become
easier to produce due to technical change (here assuming no new
commodity types). But a sliding standard can be constructed which is
nonetheless a measure of value that makes sense over changes in
technology. The variation in the value of other commodities can be
compared to that of a constructed sliding standard, similar to
Sraffa's construction of the standard commodity. Bidard: "the approach
is based on a relativity principle: in order to calculate the speed of
a cyclist observed from a boat, it suffices to know the drift of the
boat (the change in the standard) and the speed relative to the boat
(the change relative to the standard). That procedure is the only
possibility in the absence of an observer on the mainland." He gives
some numerical examples of his approach.


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