This is a reply to Gary's (7333). Thanks, Gary. On Wed, 5 Jun 2002, mongiovg wrote: > >===== Original Message From "Fred B. Moseley" <fmoseley@mtholyoke.edu> ===== > > >> > >> I think that were Marx alive he would use matrix algebra. > > > > > >I don't think so. Because matrix algebra does not fit with Marx's logical > >method. Matrix algebra Marxism assumes that the rate of profit is > >determined simultaneously with prices of production and that the initial > >givens in Marx's theory of values and prices of production are the > >physical quantities of inputs and outputs. Marx's own logic, to the > >contrary, assumes that the rate of profit is determined prior to prices of > >production, by the Volume 1 analysis of capital in general, and that the > >initial givens are quantities of money-capital (constant capital and > >variable capital), quantities of abstract labor, and the money-value > >produced per hour of abstract labor. > > >Comradely, > >Fred > > > Obviously this is a huge issue, so let me make a small point. The terminology > of "simultaneous" versus "prior" is perhaps a little misleading here. Gary, one clarification: When I say "the rate of profit is determined PRIOR to the determination of prices of production," I do NOT mean TEMPORALLY prior; rather I mean LOGICALLY prior, i.e. at a prior level of theoretical abstraction. I can see that my use of "prior", without qualification, was misleading. > The > simultaneous equation formulations of Marx's value theory don't take a stance > on the temporal priority of determination: they simply maintain that if the > real wage is given the profit rate cannot be explained INDEPENDENTLY of > prices of production. This proposition is NOT TRUE, even according to the simultaneous equation (i.e. matrix algebra) interpretation of Marx's theory, as I understand it. This interpretation is a system of n equations in (n+2) unknowns (n prices, plus the real wage and the rate of profit). Therefore, there are two degrees of freedom in this system. It is indeed true that, if the real wage AND ONE PRICE are taken as given, then the rate of profit cannot be determined independently of the (n-1) relative prices (which are not the same concept of Marx's prices of production), as you say. However, if no price is taken as given and absolute prices (which are closer to Marx's concept of prices of production, but still not the same) are determined, rather than relative prices, then both the real wage and the rate of profit could be determined independently of the n absolute prices. Gary, isn't this correct? And Gary's proposition is certainly not true for my "monetary-macro" interpretation of Marx's theory. According to this interpretation, the total surplus-value and the general rate of profit is determined by Marx's analysis of capital in general in Volume 1, and then taken as given in the determination of prices of production in Marx's analysis of the competition among capitals in Volume 3. I look forward to further discussion of this important issue. Comradely, Fred
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