Re: [OPE-L] Ajit Sinha II

From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Tue Jul 10 2007 - 13:08:38 EDT

--- Jurriaan Bendien <adsl675281@TISCALI.NL> wrote:

> Ajit argued a long time ago (against Jim Devine):
> "Value" is defined at the point where there is no
> realization problem. Whenever supply and demand (and
> they are not demand and supply schedules) do not
> match, market prices
> diverge from value.
> I do not know if he still believes that, but I don't
> think it follows, unless you make it a tautology. I
> think supply and demand (on some definition) could
> match, even although market prices and values
> diverge. That is, the value/price divergence may
> have not necessarily have to do with supply-demand
> fluctuations. At most you could say that In Marx's
> model, if supply and demand match, goods sell at
> production prices. But these production prices may
> still diverge from values.
> It's almost as though Ajit thinks here that
> supply-demand balance and equal exchange are the
> same thing, and I don't think they are.
> A case to which Marx refers is the unequal exchange
> of industrial and agricultural goods (their terms of
> trade). The output of agricultural goods could be
> fairly stable (bar the odd bad harvest) and the
> demand for agricultural goods could be fairly
> stable, yet agricultural goods trade below their
> value and industrial goods trade above their value.
> Jurriaan
I read the exchange with Jim Devine with interest and
a sense of nostalgia. As far as Marx's theory is
concerned, I stand by pretty much everything I said
there. Of course, I no longer think that equality of
the rate of profits requires the system to be at the
centre of gravitation, that is, supply being equal to
the effectual demand--but Marx along with Smith and
Ricardo did. In my writings, demand refers to Adam
Smith's "effectual demand". I again do not understand
what you disagree with. I think you are confusing the
issue by introducing "equal" and "unequal" exchange
etc. These things are not the issue here. Cheers, ajit

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