[OPE-L:3970] Re: Re: Re: Re: Re: m in Marx's theory

From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Thu Oct 05 2000 - 12:16:09 EDT


This is a response to Ajit's (3934).  I think we have reached a
fundamental methodological issue, which is progress.  


On Mon, 2 Oct 2000, Ajit Sinha wrote:

> If something is "given", then you must know it. So could you tell us
> what is the value of m in the US these days? Since you have already
> admitted that you don't know what that "given" m happens to be, nor do
> you know what determines it, then in plain English you are claiming that
> your "m" is unknown. This is what people mean by unknown in
mathematical
> formulations. An unknown does not mean it is unreal, i.e. that it does
> not exist. It only means that we do not know its value, which is what
> you have admitted repeatedly with respect to m. Thus your above
> equation has two unknowns. Cheers, ajit sinha


Ajit begins with a very strong statement (emphasis added):

	"If something is `given',
	 then you must KNOW it."

Ajit seems to me to be saying that the only givens permissible in an
economic theory are observable magnitudes.  Ajit, do I understand you
correctly?  If so, then Ajit is presuming a type of EMPIRICIST logical
method - that observable magnitudes are the only permissible givens in an
economic theory.

But empiricism is not the only type of logical method.  It is also
permissible to assume, or take as given, unobservable magnitudes.  These
unobservable magnitudes are then used to explain observable magnitudes and
other observable phenomena.  This would be a kind of
HYPOTHETICAL-DEDUCTIVE logical method.

I argue that Marx's logical method is this kind of logical method - that
is assumes unobservable magnitudes and then  uses these unobservable
magnitudes to explain observable phenomena, etc.  I think this is what is
meant by all of Marx's talk of "essence" or the "substance of
value" and "forms of appearance".  The essence or substance of value
(abstract labor) is unobservable (it has a "ghostly objectivity"), but it
is used to explain the observable "forms of appearance" of value.  

I have argued that the variable m in Marx's theory (the money-value
produced per hour of abstract labor) is such an unobservable
given.  But it is not just m that is unobservable and taken as given in
Marx's theory.  So also is L, the most important variable in the
theory!  L is a quantity of ABSTRACT LABOR.  Abstract labor is not
directly observable as such (because of unequal skills and unequal
intensities).  Therefore, if Ajit's empiricist method were followed, not
only would it be impermissible to take m as given, but it would also be
impermissible to take L as given. In which case, there would be no labor
theory of value at all (at least as I understand Marx's labor theory of
value).

Marx's theory is not the only economic theory to take as given
unobservable magnitudes.  Microeconomic theory is also based on initial
givens that are not observable - the utility function and the production
function.  No one has ever seen a utility function or a production
function, and no one knows what they actually are in the real economy
today (and there are millions of them!).  And yet micro theory TAKES AS
GIVEN these unobservable functions.

Indeed, even the initial givens in "Sraffian" theory (as I may use the
term loosely for now) - the physical quantities of inputs and outputs in
each industry - even though these physical quantities are in principle
observable, we certainly don't know what they are in the real economy
today.  The input-output tables are gross aggregations of tens of
thousands individual industries into one hundred or so "sectors".  We
don't know what the quantities of inputs and outputs are for the tens of
thousands of individual industries.  Therefore, a strict interpretation of
Ajit's empiricist methodology would also seem to rule out Sraffian
theory.  If we don't KNOW the actual quantities of inputs and outputs in
the n industries in the economy, then we cannot take the quantities of
inputs and outputs in these n industries as given.  

Ajit, what is the difference between Sraffian theory taking the unknown
physical quantities as given and Marx's theory taking the unknown m and L
as given?

In any case, I insist that it is logically permissible to take as given
unobservable magnitudes.  Empiricist methodology is not the only
permissible methodology.

I look forward to further discussion.

Comradely, 
Fred


P.S.  Gil seems to agree (in 3933) that it is permissible to take
unobservable entities as given, as long as these unobservable entities are
used to derive predictions about observable magnitudes.  I argue that this
is what Marx's theory does.  I will respond to Gil's post soon.  



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