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America's Counter-Revolution
The Constitution Revisited

From the back cover:

This book challenges the assumption that the Constitution was a landmark in the struggle for liberty. Instead, Sheldon Richman argues, it was the product of a counter-revolution, a setback for the radicalism represented by America’s break with the British empire. Drawing on careful, credible historical scholarship and contemporary political analysis, Richman suggests that this counter-revolution was the work of conservatives who sought a nation of “power, consequence, and grandeur.” America’s Counter-Revolution makes a persuasive case that the Constitution was a victory not for liberty but for the agendas and interests of a militaristic, aristocratic, privilege-seeking ruling class.

Saturday, January 08, 2011

Value, Price, and Cost of Production

[T]he less the material and labor that the production of a jacket costs, the more jackets, of course, can one produce with the means of production available. Thus the more completely can the need for clothing be satisfied. And thus, other things being equal, the lower will be the marginal utility of a jacket. The technical conditions of production are, therefore, to be sure a cause of the value of goods lying further back, a "more ultimate" cause, than marginal utility.
--Eugen von Böhm-Bawerk
"Value, Cost, and Marginal Utility" (pdf), 52-53


Neverfox said...

Am I reading that correctly that B-B seems to agree with Piero Sraffa?

Sheldon Richman said...

I don't know Sraffa's work. But wouldn't the proper question be whether Sraffa agreed with Bohm-Bawerk?

N. Joseph Potts said...

Böhm-Bawerk overlooks economies of scale in production, which interacts with demand.

What was the point of posting this passage?

Sheldon Richman said...

Joe, where does that inference come from? I'm quite sure B-B knew about economies of scale.

I posted it to show that the Austrian theory of value, price, and cost is more complex than many people realize.

Neverfox said...

Yes, the question as you phrased it would better reflect the historical order. But I suppose I phrased it the way I did because Sraffa, coming later, was a critic of B-B and marginalism. I found it interesting that passages from B-B could be seen as supporting Sraffa's own theory and aiding his primary thesis that relative values were determined objectively from the "technical conditions of production." I have to wonder if Sraffa ever wrote about this passage.

Sheldon Richman said...

Bohm-Bawerk's cost theory of value and price rests on marginal utility, so I presume Sraffa would not have been satisfied with it.