Julio Huato wrote: > The way I look at it, ultimately, all financial assets are contingent > claims on physical productive assets: means of production (MP) and > labor power (LP). This is a plain accounting fact. The price of MP > and LP (in social settings where they're commodities) have objective > centers of gravity: "values." That's my view at least. Some > respectable PEN-L members believe that valuing MP and LP is inherently > impossible or self-contradictory. Not me. I've looked into the > argument a few times and remain unconvinced. I'm with Marx on this.
At the microeconomic level, there can be systematic deviations between price and values: relative prices of production (long-term equilibrium prices) often deviate from relative values, as Marx recognized. Differences in industrial organization (monopoly vs. freer competition, etc.) also encourage price/value deviations (though, in theory, they could also counteract the deviations due to technical reasons). It's only on the macroeconomic level that the objective centers of gravity of prices are the values. On the aggregate level, all revenues from newly-produced commodities are produced by labor and all property income arises from the extra labor (surplus-value) that's extracted from labor-power. (The aggregate level here is the world capitalist system.) > Clearly, these values are the social aggregate (average) of private > expectations about the amounts of social labor required to reproduce > the MP and LP in "normal" conditions -- expectations conditional on > existing information available to whoever is doing the valuation. I disagree or maybe I misunderstand. In any event, values don't reflect subjective expectations. Instead, they reflect objective facts (which are often unknown or poorly known). The value of labor-power, for example, is the cost of reproducing labor-power over time, stated in labor-value terms. Workers' subjectivity -- their class consciousness or lack thereof -- can raise or lower that cost, but it has to be expressed in practice, not simply in thoughts or words. Expectations do affect objective facts (the power of prophecy), but in the end, the facts adjust slowly and are hard to change, while subjective views adjust quickly and are easier to change (within the limits set by the facts). > Ultimately, as Marx also believed, the valuation of MP and LP is > social, that is, the computation or aggregation of expectations is > conducted by trial and error in/through market exchange. Those values > are what I call the "fundamentals." They're social objects. They're > objective: independent of the subjectivity of individuals. this is confusing. I'd say instead that expectations are shaped and limited by objective facts (which are often not known very well). Expectations -- say of profit streams over time -- can be quite far from the objective facts (the production of surplus-value).[*] In the Marxian tradition, this is a source of financial crises, as expectations "adjust forcibly" to reality. Typically, however, they overshoot going downward, so that reality is never achieved. > That said, we need to keep in mind that the objectivity of values is > social. When people do things (e.g. produce in given social > settings), their actions crystallize into new or transformed social > objects (not necessarily tangible, but material or physical in the > most general sense of these terms): products, social structures and > their emerging properties, institutions, broader social conditions, > culture, history. The degree of social objectivity of a given social > object depends on its particular nature. Ultimately, these social > objects are all historically contingent. Some are contingent upon a > change in people's minds or habits or customs. Others are contingent > on a change in laws or political conditions. Others are contingent on > changes in more hardened economic structures. Etc. that sounds reasonable to me. [*] for example, the profit rate in the US seems to have peaked in 1997, while financial markets continued to soar until 2000-2001. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante.
