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Re: [OPE-L] The roots of value theory

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Hi, Jurrian,



I agree with your points and some other interesting ideas of your wiki
entry, especially the importance of distinguishing between real and ideal
prices. But what I wanted to point out is related with what Jerry was
raising in another message about the relationship between the "order of
presentation" and the "real order" of a phenomenon. In explaining his
theory, Marx himself speaks, as you did, of real prices as an approximation
of ideal prices. This makes even greater sense if one thinks that there are
"many" real prices around "one single" ideal price. But up to what point
should we say that it is rather ideal prices that approximate real prices?
What do you think?



Cheers,

     Diego







----- Original Message -----
From: "Jurriaan Bendien" <adsl675281@xxxxxxxxxx>
To: <OPE-L@xxxxxxxxxxxxxxxx>
Sent: Monday, February 26, 2007 8:09 PM
Subject: [OPE-L] The roots of value theory


1) In reply to Diego: both could be true, and arguably one could think of
a
situation in which both are true at the same time. As I've argued before,
the notion of equilibrium may refer to a number of different sorts of
situations which are not infrequently confused. The difficulty with
equilibria is typically how you know that you've got one in the real
world -
the only real observable evidence you have, is that prices or sales stay
constant in some sense (usually a rare event). You are of course free to
modify my wiki entry, if you think there is a mistake in it, I mean I do
not
claim to be a professional economist.

My idea is that there is a number of categorically different kinds of
prices
possible - from actual prices paid to acquisition prices, from accounting
prices to administered prices, from theoretical prices to hypothetical
prices, and so on. Prices may furthermore be applied to different classes
of
objects under different conditions, from e.g. a packet of butter bought in
a
shop to labour, hedges, futures, services and leases. Among East European
economists, this idea was more frequently theoretically acknowledged. It
suggests, that we do not get beyond generalities in price theory, unless
we
consider the social-institutional frameworks within which those prices are
set.

I think the difference between a product-value and the ideal price of a
product, as far as Marx was concerned, is that the product-value really
exists, insofar as that product really takes X amount of society's current
labour hours to make, something which the members of society necessarily
have to adjust too even if they do not know its exact magnitude, and
whether
they are trading in it or not, whereas the ideal price is a theoretical
price. Thus, the production price would be in most cases a theoretical
price
level, which could be thought of either as some sort of equilibrium price,
or a regulating price (I think that, given what Marx says about the
production price, it is better interpreted as a regulating price level, a
sort of price-norm). As I have mentioned in a simplified introductory
article http://en.wikipedia.org/wiki/Prices_of_production I also think one
ought to distinguish between enterprise production prices, sectoral
production prices and economic production prices.

What makes things complex is, that real prices and ideal prices can
mutually
influence each other, just as values and actual price signals can
influence
each other over time inasmuch as market demand and labour-expenditures
adjust to each other. I discovered the importance of this myself when
doing
research in social and economic statistics, but you can also see that
operating in the price-reckoning of ordinary business activity. So one of
the things you would need to do to complete Marx's theory, would be to
consider the "price form" and its different modalities, since although
much
of textbook economics regards prices as obvious things, there is much more
to it. Indeed, nowadays an interface is developing between price theory
and
information theory. I think if we examine the price-form itself more
closely, we get more clues as to why so much of economics oscillates
between
the objective and the subjective in a more or less eclectic manner, quite
apart from the lack of a coherent theory of value.


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