Oh, I agree. And for those who don’t care for Zizek, David Harvey has a very good discussion of the same point in The Limits to Capital.

But there is a segment of heterodoxy that treats value, as Marx (sometimes) did, in a more formal quantitative way—the transformation problem and all that. That’s the sort of thing John Q. thinks is a waste of time, I guess—and I more or less agree, tho I’m not at all sure its imminent extinction is a good thing.

It’s true that I think that methodological heterodoxy is mostly a waste of time, and a distraction from matters of actual concern. By contrast, Nilsson’s use of standard neoclassical economics (he cites Econometrica, for example) to derive leftwing political conclusions is exactly the kind of thing I try to do.

There was a very good article on this by Eric Nilsson a few years back. (In RRPE, so John Q. won’t want to read it, but others may find it interesting.)

There’s also an argument that it understates inflation, since in general it does not factor in quality decreases at all, even where they are arguably rather important, e.g. retail (big box = lower prices, worse service/convenince) and air travel. A few years ago there were some very strong arguments by people like Robert Gordon and Dean Baker that quality improvements in computers were being exaggerated, again resulting in understated inflation, because the hedonic pricing model used assumed that consumers were paying for e.g. memory and chip speed rather than functionality. Dunno what the status of that debate is, but in general, one should definitely not assume that errors in measuring quality change will be in only one direction.

Which, you know, [cough] far, far from the truth of the matter.