Brad, I think that there is some similarity between Hayek (Don't tell Justin)
and this part of Marx's theory. Hayek, you suggest, came to the right
conclusion without the labor theory of value. So what? I might propose a
biblical explanation for why a rock falls to the ground. Would that
explanation throw any light on what Newton proposed? I don't think that
Hayek's theory has much to do with the labor theory of value, but his cycle
theory -- with all the round-aboutness -- is pretty weak.
Brad DeLong wrote:
> In response to what I wrote:
> >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/
> [EMAIL PROTECTED]
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 530-898-5321
E-Mail [EMAIL PROTECTED]
