# CAUSAL-NATURAL CORRELATION of EXCHANGE

SSET 07 – **CAUSAL-NATURAL CORRELATION of EXCHANGE**

(Value as origin of the prices)

The failed theory of objective value since the epistemological error of W.S. Jevons, ** ^{[1]}** define the relation of exchange like:

“… reality it is a differential coefficient… show the increase in rate of the quantity of the good bought with what is given in exchange… (P.131) How we will determine the exchange point when it left to be utility? This relationship may include both the exchange relationship and utility grade… “(P: 132-133).

The biggest confusion emerge from pretending give precision to exchange act by meant a *mix* both objectivism (exchange relationship) and subjectivism (grade of utilities). But the *mix* collapsed previously in this quote:

“… In other words, the grade of utilities of the two uses must be equal.”(P.108)^{[2]}

Sentence with which his epistemology is reduced to pure objectivism (quantities exchanged); with which he buries his “grade of utility” (valuations of his theoretical subjectivism).

With the new ** Subjective and Solidarity Economic Theory** (

**SSET**), meant

*“scissor”*of Menger, we had demonstrated the causal relationship

*value →***, that we express so:**

*prices*“SCISSOR” of MENGER MARSHALL |

We clearly appreciate that prices emerge exclusively from law of decreasing marginal utilities ** ^{[3]}** (dimension of value) of all wealth manifestation (

**and**

*U*_{q}**). So only the theory of the subjective value can explain the natural causality of the exchange.**

*U*_{$}

^{[4]}The subjectivism of scientific foundations, allow us to notice the ** correlation of the economic exchange** between the relative values [

**],**

*v*_{x(y)}**prices [**

^{[5]}**], total quantities (**

*P*_{x(y)}**and**

*x*_{t}**) and exchanged (**

*y*_{t}**and**

*x*_{i}**), of the exchange of two economic goods (**

*y*_{i}**and**

*x***):**

*y*of__Positive correlation__*relative value*with*price*:**↑**↔ ↑*v*_{x(y)}*P*_{x(y)}__Negative correlation__of value (price) with__owner__exchanged quantities:**↑**↔ ↑*v*_{x(y)}↔ ↓*P*_{x(y)}*x*_{i}__Positive correlation__of value (price) with__cross__exchanged of quantities:**↑**↔ ↑*v*_{x(y)}↔ ↑*P*_{x(y)}*y*_{i}

Since the precedent correlations we deduce the:

**CAUSAL-NATURAL correlation of exchange**

↑ ↔ ↑v_{x(y)} ↔ ↓ P_{x(y)} ↔ ↑x_{i}y_{i} |

The logical and simple chain of the ** CAUSAL-NATURAL correlation of exchange** explains us, with total simplicity, how the

**(accord the decreasing marginal utilities**

*value***) is the foundations of economic theory to understand the behavior of the**

*U*_{x,…y}**[**

*quantities***,**

*q*_{t}**,**

*q*_{i}**and**

*P*_{x(y)}**].**

*P*_{y(x)}The ** causal-natural correlation of exchange**,

**say us clearly:**

^{[6]}*the relative value of an economic good have positive correlation with quantities of the another economic good exchanged*.

Since the natural correlation of exchange we deduce la natural correlation of exchange between currency (** $**) and de another economic good (

**).**

*q***CAUSAL-NATURAL correlation of CURRENCY exchange**

↑ ↔ ↑v_{$(q)} ↔ ↓ P_{$(q)} ↔ ↑$_{i}q_{i} |

This correlation is in line with the judgment of Friedrich A. Hayek: *“Currency is the only thing that competition would not cheapen, since its attractiveness is based on preserving its «shortage».”*

Carlos A. Bondone

** ^{[1]}** Jevons William Stanley,

*La teoría de la economía política*. Ediciones Pirámide SA. España, Madrid 1998. Own translation.

** ^{[2]}** While the “ingenious” example of Jevons refers to different uses of the same good, it is more appropriate to refer to different goods.

** ^{[3]}** It is a pure expression of the

**of Menger.**

__Marginal Subjective Value Theory__** ^{[4]}** It’s the natural laws of decreasing marginal utilities of wealth, and relative of exchange.

** ^{[5]}** Where

**.**

*v*_{x(y)}= U_{x}/ U_{y}** ^{[6]}** It is with full validity of the two natural laws of utility.