[OPE] devaluation and revaluation of variable capital

From: Jurriaan Bendien (adsl675281@tiscali.nl)
Date: Sat Feb 09 2008 - 17:12:20 EST


I think perhaps two points are pertinent.

1) Marx (in contrast to many Marxists) never said that the law of value governed all prices or all assets, or even all labour. What he said is that it governs the relative prices of the current gross output of new reproducible goods and services sold in the market. At best you can say that the current market value, or current replacement cost of reproducible commodities, influences the prices of other goods, services and assets being traded. If for example I buy a new car at the current normal price of $20,000, I am unlikely to resell it for $500, although in principle I could do so if I want to get rid of it quickly.

2) If you reject the hypothesis that the current production of reproducible commodities is governed by the law of value, then you have to explain what regulates the relative prices of those commodities. Why does a car always cost vastly more than a bunch of carrots, for example? What explains the cost structure and price structure of outputs? If this is not ultimately due to production costs, which reduce to quantities of human labour time required to make products, what then regulates relative prices?

If I apply Austrian economics, all I can say is that the intensity of subjective preference determines price relativities. But insofar as there are billions of unique subjective preferences, I cannot stipulate any regulative principle at all. All I can say is, that as a matter of fact, the intensity of subjective preference for cars was consistently such that cars sell for more money than a bunch of carrots. That preference could change tomorrow, and therefore there is no "law" which applies. At best I could attempt a sociology of human valuations, some of which empirically appear to show historical continuity, while others can change in an instant. 


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