>The main point in the present context is that "assets" are overvalued
>because of the labor theory of value. To say that capital flows here
>because of unlimited investment possibilities flatly contradicts and is
>incompatible with any labour theory of value. Investment of capital demands
>surplus values. But surplus vlaue is labour and in any given country labour
>is of a given magnitude. From a given working population only a definite
>mass of surplus value is extortable. To suppose that capital can expand
>without limits--the supposition functionally built into the 9500 Dow--is to
>suppose that surplus value can likewise expand without limits, and thus
>independently of the size of the working population. This means that
>surplus value does not depend on labor.
Of course SV places a limit on a bubble, but what Keynes called the financial circulation can get wildly out of whack with what he called the industrial circulation for long periods of time. Insofar as financial conditions influence "real" conditions - if loose finance can sustain overinvestment - then wouldn't this have an effect on the production of SV?
Doug