Date: Mon, 3 Nov 1997 22:25:32 +0000
From: James Heartfield <James-AT-heartfield.demon.co.uk>
Subject: Re: M-I: Re: Stock Market Rollercoaster


In message <01bce7dd$c8b7ab00$23e0869f-AT-nobbody.tinet.ie>, Rebecca
Peoples <wellsfargo-AT-tinet.ie> writes
>My point is a simple one which you miss. The long bear market expresses
>pools of value that really exist. However I  never suggested that share
>capital is more than fictitious capital.I am just saying that success of the
>bull market expresses increasing value in existence. As you know value takes
>on many forms: the money form, the capital form, the money capital form, the
>rent form etc. etc. etc.
>
>If a person buys a dirty rag priced at a million gold sovereigns for a
>million sovereigns this is a real transaction. Just because they buy a dirty
>rag does not make the million pounds not a million gold sovereigns. Neither
>does it mean that the dirty rag is not a dirty rage.

I hope I'm not being obtuse, but I think I do disagree. To take the
metaphor first, what it describes is the deviation of price and value.
The rag has been over-valued. It s real value is an objective, not a
subjective factor. By analogy, the values of shares on the stock markets
have been over valued. Their prices have deviated from their values. The
companies they are shares of are not worth their share value. The value
of the shares keeps rising because of the demand for shares. The
perverse demand comes about because industry generates a surplus that
cannot be profitably re-invested. How can we know that these shares are
over-priced? Because their value swings from extreme to extreme without
reflecting any real change in the production process. First the
precipitate rise in share values, on Wall Street in the City of London,
which, as everyone noted was unjustified in terms of economic
performance. In fact rises in share prices seemed to move in the
opposite direction from actual production. Second, the sudden drop in
share prices reflects that these have no real value behind them.

Trying not to miss your point.
-- 
James Heartfield


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