Re: [OPE-L] standard commodity

From: Andrew Brown (A.Brown@LUBS.LEEDS.AC.UK)
Date: Fri Mar 25 2005 - 04:39:45 EST

Likewise quickly,
There would be no use, nor truth, in the LTV if there were no quantitative relation between price and labour time. My point is simply that it doesn't need to be an exact proportional relation. Your theoretical point boils down to making the far too bold claim that absent exact proportionality there can be no theory. You keep asking about how labour time and price are related. But we know the answer: it is through the processes of competition, i.e. through the mechanism of the 'invisible hand'.
Yes, there are qualitaive as well as quantitative reasons for the LTV (basically any society has to determine labour allocation, in our society this is thorugh price). 
Re. your view of 'science'. This is another interesting issue and we do disagree but we can pursue another time.
Many thanks

	-----Original Message----- 
	From: OPE-L on behalf of ajit sinha 
	Sent: Fri 25/03/2005 06:11 
	Subject: Re: [OPE-L] standard commodity

	Just a quick response.
	--- Andrew Brown <A.Brown@LUBS.LEEDS.AC.UK> wrote:
	> Hi Ajit,
	> The numeraire certainly ain't money!
	> Re, your discussion of 93 percent correlation: if
	> there is a 93 percent
	> correlation over a number of 'observations', then of
	> course there may be
	> subsets of observations with zero correlation, and
	> some with negative
	> correlation too.
	Have you seen Ricardo's "Principles"? If you have,
	then why are you attributing such things to Ricardo?
	If you are talking about LTV, then as I understand it,
	"T" here stands for Theory. Therefore, my point was a
	theoretical one. That is, when you say that LTV states
	that "there is a positive relation between labor-time
	and changes in prices", then my theoretical point that
	a change in price can come about because of change in
	distribution without any change in labor element
	leaves your theory in deep trouble. Furthermore, for
	your statement to have a theoretical pretense, you
	need to first establish how labor involved in
	determining the prices in the first place. If labor is
	not involved in determining prices and how come it
	becomes the sole or the major cause of changes in
	prices? So the first thing you will have to admit is
	that LTV is not a theory of value but rather just a
	statement about observed relation between labor-time
	and changes in prices.
	Now to your empirics: let us suppose that you find a
	time-series of statistical positive corelation between
	the amount of direct and indirect use of petrol and
	change in prices. Will you then accept a "petrol
	theory of value"? In this case your argument that
	labor is human and petrol is not will have no validity
	since your theoretical proposition is nothing but a
	statistical observation. Secondly, let us suppose that
	somebody finds that the corelation between labor-time
	and changes in prices is not statistically
	significant. Will you be then ready to accept that
	your LTV is all bull?
	> If you think that science is no more and no less
	> than the positing of
	> functional relations then we disagree on our
	> respective notions of
	> science.
	When did I say anything like that? Why do you have to
	create these straw men to argue against me. I'm not
	writing a dissertation on science which is going to
	establish that science is no more or no less than this
	or that. Why cannot we have mature discussion? All I
	have said that economic science makes functional
	relations and they are predictive in nature. If you
	disagree, then we can further argue. Cheers, ajit
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