marginalism continued

["William B. Ryan" <william_b_ryan@xxxxxxxxx>]

> All it says is that "equilibrium" is at the point where the
> supply and demand functions *intersect.* It says nothing
> about actual price at any actual point in time.
>From that the proper price is given as the equilibrium price, with deviation
from such resulting in shortages and surpluses. Now this is circular logic
for the proper price is needed to determine utility for how else do you
determine marginal cost?
--

Keep in mind that I am not a defender of marginalism.
My criticism of you is that you do not properly
characterize it, therefore your criticism is
irrelevant in that it merely reflects your personal
misunderstanding.  It becomes particularly egregious
because you start your own analysis from the very
same premises as do the marginalists -- limited
resources, unlimited wants, etc.  Starting from those
same premises the marginalist argument is quite
logical and consistent.  Yours is a contradictory
hodge-podge.

The marginalist argument is from the perspective of
the profit-maximizing firm, not the economy as a
whole.  The vertical axis of their graph is
demarcated in utils received and expended per
accounting period, not dollars - though sometimes
they will substitute the dollar symbol for the util
in their expositions.  The horizontal axis is
demarcated in quantity produced per accounting
period, not time.  The accounting period is therefore
undefined.  It could be very short or very long, or
something in between.

They assume, in terms of the graph from left to right
along the horizontal axis, the supply cost curve is
sloping upward with increasing quantity produced per
accounting period due to the assumed marginally
diminishing productivity of labor and capital.

The utility received curve is sloping downward due to
assumed marginally falling demand from their
customers with increasing quantity supplied per
accounting period.

The point where the two curves intersect is the point
of realized profit maximization for the firm in terms
of net utils received per undefined accounting
period.

The theory does not explain how utils are translated
into dollar prices in actual markets.
------------------------------------


> The hypothetical primitive economy is characterized by atomized
> producer/consumers who trade between themselves. The modern
> economy is characterized by multistage production where the
> means of production are differentiated from consumption. In
> such a system money is more in the nature of a ticket or
> claim check against a portion of that production rather than
> it is a medium of exchange.
Money is money. It is not a claim slip, for claim slips have claim on
something to which money doesn't. Everybody could one day decide to not use
your currency, and you are out of luck.  It is merely an overvalued
commodity.
--

Saying that money is money is a truism that does not
define money.  You arbitrarily say that it is not a
claim slip, then define claim slips but arbitrarily
assume that money does not fit that definition.

Modern money is what modern money is, not what you
say it is.  Most people think of money as being the
form of credit they receive in their pay vouchers.
But that credit enables the final resolution of the
process of production that is conducted
contractually, not through medium of exchange.  And
the credit you receive in your voucher is itself a
generalized contract or ticket.  It is something
quite different than the paper it is written on.














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