Episode 115: Stranger than Truth—Spurious Correlations Between “Values” and “Prices”
Gabriel and Andrew engage in a fun and informative exposé of a real-world case of spurious correlation—the correlation between industry-level “values” and “prices.” Their discussion is based on chapter 11 of Andrew’s book, Reclaiming Marx’s “Capital,” and “Christianity versus Alternative Faith Bases,” his parody of the value price correlation “studies.” They discuss what spurious correlation is, why the value-price correlations are spurious, who started value-price correlation mania and why, what it has to do with Karl Marx’s actual value theory, how Andrew became involved in exposing the spuriousness of the value-price correlations, and more. Andrew refutes objections to his findings made by Paul Cockshott & Allin Cottrell and by Emilio Díaz & Rubén Osuna. Alan Freeman’s 1998 “Comment,” warning that the value-price correlations are probably spurious, is cited during the discussion. We welcome and encourage listeners’ comments, posted on this episode’s page. |
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