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306 Economics
product may be taken to be the sum total of goods, measured in physical units
(without attempting to provide a common denominator for the goods them-
selves). Material balances prepared for the purposes of central planning are
made up on this basis, which is also used in some important applications of the
input-output method (the latter can also serve in determining technological in-
put coefficients in physical terms). The variety of goods produced in a national
economy is so great, however, that they must be added together in aggregate
categories - all the more so for the purposes of macro-economic considerations
that involve such highly aggregated concepts as investment, social consumption,
and so on.
Economics is inconceivable without a common denominator such as exchange
value. However, price systems - not to mention non-market situations - do
not always adequately express this value; this is why the improvement of scalar
calculus in economics undoubtedly constitutes one of the major methodological
problems. It is not possible here to enter into the complex controversy on the
theory of value and prices which occupies so important a place in the history
of economic thought. It need only be pointed out that the total value of the
national product depends not only on the price system adopted (which deter-
mines the relative values of products), but also its commodity structure in value
terms. At this point, price mechanisms can be considered from a number of
standpoints :
a. Let us assume that an objective measure of exchange value exists, as was
done e.g. by Marx in stating that the exchange value of a given commodity was
equal to the quantity of socially indispensable labour embodied in it, adjusted
according to the quality of this labour.35 This, however, ignores the qualitative
aspect or ‘use value’, the condition sine qua non of the existence of an exchange
value. As for the concept of marginal utility, it is based on a petitio principi, as
we do not know how to measure marginal utility, and the theory of prices found-
ed on it is nothing more than a modification of a market equilibrium theory of
prices.
b. Let us assume that there is a social mechanism which automatically de-
termines prices. This is the essence of the market equilibrium of prices which
depends, however, on very rigid and unrealistic assumptions regarding the au-
tomatic operation of convergent adaptive processes. The category of costs can-
not help us much either unless we revert to our fist assumption, and agree in
addition that the equilibrium of the market economy system depends on goods
being sold at prices corresponding to their relative values.
c. Let us assume that the price system can be chosen in such a way as to reflect
preferences, i.e. it does not depend on the theory of value, or on the spontaneous
operation of market forces, but is consciously planned to attain certain growth
targets under conditions of market equilibrium. It is essentially operational, and
can be accommodated with any theory of value. We thus obtain a conventional
system of accounting prices which reflect, in physical terms, the constraints met
with in trying to achieve the objectives. Consequently, the accounting prices
reflect the planner’s preferences, and permit centralized and decentralized de-
cisions that conform to these macro-economic preferences.