Re: Miscalculation

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

My understanding of value theory is relevant to Louis's theory of
miscalculation.  This relates to Rakesh's earlier request that I say
something about ficititious capital.

Marx's value theory, as I read it, tells us what the system MUST do to
remain coherent.

So long as prices remain somewhat linked to values the price system gives
capitalists relatively good information about the underlying structure of
the system.  Over time fictitious capital accumulates and with it, prices
lose their relationship with values.

As a result, capitalists miscalculate, making the system increasingly
vulnerable.
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx