Re: [OPE-L] questions on the interpretation of labour values

From: Pen-L Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Sat Mar 31 2007 - 15:38:34 EDT

Quoting Diego Guerrero <diego.guerrero@CPS.UCM.ES>:

> Hi, Ajit:
> You wrote commenting on Fred:
> "If this is crucial, then you should know that you have
> been making a crucial mistake all along. How does a
> firm gets its revenue? By selling the goods it has
> produced. When it sells a good, it sells it at a
> price. Only AFTER selling its goods it receives a sum
> of money that is its revenue. So revenue by definition
> is quantity sold multiplied by its price. There is
> only one way arrow of determination in the equation
> PxQ = M. You cannot know M unless you know both P and
> Q. In other words, if P is unknown, then M is unknown.
> In your equation P = M/Q (assuming Q is known), you
> have one equation in two unknowns, P and M, and so it
> determines nothing."
> 1. This debate reminds me of the forest/tree question. You think we must
> study the tree before looking at the forest. By contrast, I think Fred,
> others and also I follow Marx in thinking that the correct procedure is
> studying the forest before analysing the tree. In my opinion, it is not
> mainly a question of sequential versus simultaneous. It goes beyond: it is
> the question of the necessary rejection of methodological individualism.
> Those who believe necessary to start from the individual behaviour in order
> to understand the system seem to forget that the individuals are socially or
> globally determined. Micro-agents must be understood in their macroeconomic
> circumstance. This is for instance why for Marx classes come before
> individuals.

Hi Diego,

I don’t think “methodological individualism” is a good description for
Ajit’s insistence that M must be determined by PQ.  “Methodological
individualism” has to do with individual choices; Ajit’s theory does
not have to do with individual choices, but with the relation between
individual quantities and total quantities.  I don’t know what we
should call Ajit’s insistence that total quantities must be derived
from individual quantities (which is based on Sraffa’s theory -
objective individualism? – but to call it methodological individualism
is misleading, since that term already has a specific meaning.


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