>The labor theory of value does not have to be very mysterious. In a
>sense, at least one part of Marx's theory can be read something like
>this: in order for a market economy to function "properly," prices must
>bear some relationship to the underlying values. Prices don't equal
>values, but they must be somewhat in line with values -- even though
>some commodities have prices but no values.
So how does this work under petty commodity production? There is no
surplus value to be redistributed to zero-value commodities to give
them prices?
>In the course of a business cycle, the price system becomes increasingly
>distorted. The relationship between prices and values loses its
>coherence. Investments become directed into increasingly irrational
>directions. In effect, the price system becomes contaminated to a
>larger and larger extent by fictitious values.
>
>Eventually, the system becomes more fragile and more likely to
>experience a crisis. The shock of the crisis can either reinvigorate
>economy as the fictitious values are destroyed or it can bring the
>economy to its knees.
Sounds a lot like Hayek's vision of the business cycle. But Hayek
managed to do fine without the LToV. So what's its role in this
Hayekian mechanism?
Brad DeLong
--
J. Bradford DeLong
Professor of Economics, U.C. Berkeley
601 Evans Hall, #3880
Berkeley, CA 94720-3880
(510) 643-4027 voice
(510) 642-6615 fax
http://www.j-bradford-delong.net/
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