In response to my question >The real question is whether the "law of value" has anything uniquely valid to offer to the task > of developing an integrated treatment of micro and macro phenomena. If so, what is it? Fred wrote in 6334 >> >> >In brief answer to your question, Marx's theory explains the determination >> >of the general rate of profit on the basis of law of value at the macro >> >level, which is then taken as given in the determination of prices of >> >production at the micro level. No other theory is able to make this >> >crucial connection. which prompted me to ask in 6335 (sorry for the long build-up, but I'm late returning to this thread) >> 1) What is the "law of value" in this context, and what mechanism assures >> its "law-like" operation at the macro level, understood as analytically >> prior (otherwise it could not be "taken as given") to the determination of >> prices at the micro level? And if there is no clear mechanism, why should >> this be considered a valuable or valid contribution? Now Fred writes in 6358 >I am not sure what you mean by "mechanism" here, and why this should be a >requirement for a valid theory. Here's why: I originally asked if the "law of value" had anything *uniquely valid* to offer to the analytical task of integrating micro and macro analyses of capitalist phenomena. If the assertion, given above by Fred, that the general rate of profit is macro-determined *prior* to the micro determination of prices of production is simply an *assumption,* then by my understanding at least this can't be counted as a *theoretical* contribution, let alone a "uniquely valid" one. One can make any assumption one wants about the connection between macro and micro phenomena, but that doesn't mean that the assumption has any theoretical or empirical merit. If, on the other hand, the assertion that the general rate of profit is determined prior to prices of production is presented as a theoretical *result*, then it's legitimate to ask what economic conditions are alleged to yield this theoretical result. That's what I meant in asking about the underlying "mechanism." > Marx's "law of value" is the assumption >that the new-value component of the price of commodities is proportional >to the quantity of current abstract labor require to produce these >commodities. How does an *assumption* achieve the status of a *law*? > On the basis of this assumption, the following important >phenomena of capitalist economies are derived: the determination of the >total surplus-value, or dM, in the capitalist economy as a whole, >conflicts over the length of the working day and over the intensity of >labor, inherent technological change, the falling rate of profit, inherent >tendency toward crises, etc. Returning to my original question, are these derivations (a) *valid*, that is, do these "derivations" follow, as you seem to suggest, *solely* from the assumption "that the new-value component of the price of commodities is proportional to the quantity of current abstract labor required to produce these commodities," or are some auxiliary hypotheses also needed? (b) *unique,* such that the "derivations" indicated above *could not* be derived without assuming "that the new-value component of the price of commodities is proportional to the quantity of current abstract labor required to produce these commodities"? If auxiliary hypotheses are needed for the above derivations, might they not yield these results without invoking the "law of value"? For example, does one need this assumption in order to infer that there will be "conflicts over the length of the working day and over the intensity of labor"? Since no non-Marxist assumes that the "law of value" holds sway, are you asserting that no non-Marxist can infer from his or her theory that such conflicts would arise? >Volume 3 of Capital is mainly about the distribution of surplus-value, or >the division of the total surplus-value (as determined in Volume 1) into >individual parts, first into equal rates of profit across industries, and >then the further division of surplus-value into industrial profit, >commercial profit, interest, and rent. In this theory of the distribution >of surplus-value in Volume 3, the total amount of surplus-value is taken >as given (as determined in Volume 1). In particular, in Part 2, the >general rate of profit (the ratio of the total surplus-value to the total >capital invested) is taken as given in the determination of prices of >production for individual commodities. Yes, that's true. >This is the rigorous theoretical connection between the macro and the >micro in Marx's theory of surplus-value. This does not address my original question. Next, in response to my second question, >> 2) *Why* is "[n]o other theory able to make this crucial connection," at >> least in the non-tautological sense that phenomena determined at the macro >> level are held in turn determine micro outcomes? Why do you need *Marx's* >> "law of value" (whatever that is) to assert this? Fred asks >What other theory first determines the rate of profit at the macro level >and then uses this to determine the prices of individual prices at the >micro level? Doesn't this question beg the question? Why is it necessary to assert the *law of value* in order to infer this order of determination? And perhaps more to the point, what if this order of determination doesn't hold? What if, for example, the rate of profit is determined *simultaneously* with commodity prices, rather than *prior* to them? Gil
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