From: Ian Wright (wrighti@ACM.ORG)
Date: Fri Apr 13 2007 - 00:10:13 EDT
> Imagine that products are marked with their labour content (again, > assessed purely on the production side). But if people "don't > much want" a particular good in a given period, its price, in > labour tokens, is set at a discount relative to the actual labour > content. (We'd rather sell these goods and not waste them.) On > the other hand, if a good is unexpectedly popular, its price in > labour tokens is set at a premium relative to the actual labour > content. > > Now we have two independent pieces of information: the labour > content as such, and the price in labour tokens that (roughly) > "clears the market" for the good. The key point is that we can > use the _divergence_ between these two magnitudes to guide a > reallocation of resources. Allin, I agree with all that you say here. Allow me to add: The labour-content is the "labour embodied" in the commodity. The price divided by the real wage is the "labour commanded" by the commodity. A mismatch between them means that 1 hour of labour is either punished or rewarded with command over less or more than 1 hour of labour. Given that social labour is reallocated in response to these signals then there is a tendency toward the equalisation of labour-embodied with labour-commanded. This dynamic is the law of value. In the hypothetical equilibrium state there is no wasted or socially unncessary labour, the allocation of labour is efficient, and prices are proportional to labour-values.
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