Ajit is correct, of course. S is proportional to Ls as Fred defines it, via S=m.Ls but his Ls includes m as an argument. Taking this "out of hiding", as my final expression did, yields S= m.L - V My original point was that a linear relationship is only always and everywhere proportional if it "passes through the origin". In this case, that again requires V=0 for Fred's equations to give strict proportionality. This is, of course, one condition under which a transformation problem will not apply even where capital to labor ratios differ between industries--the other being that profits equal zero. Anywhere in between--non-zero wages and non-zero profits--and you have a transformation problem. Cheers, Steve At 11:27 AM 10/6/2000 +0530, you wrote: > > >Steve Keen wrote: > >> Thanks Fred, >> >> Yes it is proportionality in the strict sense of the word, but it is no >> longer Marx's theory in the strict sense of the word. > >_________________ > >No it is not proportional Setve! Fred is entirely wrong. And he is wrong because >he does his mathematics upside down. He first "defines" > >S = m.Ls (here m is supposed to be "given" but unknown, and Ls is definitely an >unknown, otherwise he will not need his other two equations. And from this he >keeps claiming that his S is proportional to Ls with the proportionality factor >m). Now since his Ls is unknown, he defines Ls as > >Ls = (L - Ln), now in this equation L is supposed to be known but Ln is still >unknown. Therefore, he goes for his third equation where Ln is defined as > >Ln = V/m, where V is supposed to be known and m is the "given unknown". So >ultimately what his S turns out to be? > >S = (m.L - V), as you have correctly put in your later part of the post as >"Surplus is an unobservable number times L, minus workers' wages?" > >Therefore, contrary to Fred's claim S is not proportional to anything with the >proportionality factor m. Cheers, ajit sinha > >> >> >> This is where I believe the divide arises between myself, Ajit, Gil et al >> on one broadly defined side of this debate (possibly including Allin & Paul >> on this issue), and yourself. Both sides are saying that Marx's theory as >> he wrote it can't be sustained, in that strict proportionality between >> surplus value and necessary labor can't be correct. >> >> The side I'm on in various ways says that therefore the labor theory of >> value must be erroneous--myself by saying that it's contradicted by Marx's >> own logic, Ajit & Gil by supporting Sraffa's input-output critique, Allin & >> Paul by saying that as an empirical issue, there's a reasonable but not >> strict correspondence and that's OK for research. >> >> You are saying that so long as we bring in an unobservable modifier m, then >> we can make S proportional to V when this modifier is part of the equation. >> Well, mathematically, perhaps; but what does this do to the simple Marxian >> clarion call that all surplus arises from labor (with which I don't agree, >> of course, but it's a very large part of why people are initially attracted >> to Marx)? Surplus is an unobservable number times L, minus workers' wages? >> >> Any potential recruits who heard that argument at a first meeting with the >> IS would wobble out of the meeting hall and go looking for a less confusing >> belief system. >> >> This of itself doesn't concern me too greatly, but it's a sign of the >> divide which exists between the simple message which recruits people to an >> initial interest in Marx, and the complex footwork needed to sustain a >> comparable message once you look very closely at the argument. >> >> The point which does concern me is that, because of this logical conundrum, >> Marxian economics hasn't even got out of the starting blocks yet 130 years >> after Charlie first penned Das Kapital. We may be about to enter >> capitalism's biggest crisis since the Great Depression, and yet rather than >> debating this, the premiere minds in Marxian economics are still debating >> how to derive prices from values. >> >> Rather than being a tool which can "lay bare the workings of the capitalist >> system", this looks more like a poorly designed tool which has turned its >> advocates into a religious sect a la Life of Brian, rather than, as Marx >> and Engels saw themselves, intellectual leaders of the working class. >> >> Cheers, >> Steve >> At 12:21 PM 10/5/2000 -0400, you wrote: >> > >> >This is a response to Steve K's (938). Steve, thanks for your several >> >recent posts, which I have read and thought about and hope to have the >> >time to reply soon. >> > >> > >> >On Tue, 3 Oct 2000, Steve Keen wrote: >> > >> >> At the risk of insulting Fred, might I suggest that one reason for the >> >> impasse with Ajit is over Fred's use of the word "proportional" to >> >> characterise the relationship between S and L in the formula: >> >> >> >> S = (m.L - V) >> >> >> >> which (correct me if I'mn wrong, but...) Fred agrees characterises his >> theory? >> >> >> >> Strictly speaking, this formula can only be "proportional" if V=0. If so, >> >> then for example, if m=2, S= 2*L for all values of S and L. If, however, >> >> V>0, then the "proportionality" this formula gives varies as S and L vary. >> >> For example, if m=2 and V=2 then S/L=0 for L=1, S/L=1 for L=1.5, S/L=2 for >> >> L=2, and so on. >> >> >> >> That is not proportionality in the strict meaning of the word. >> >> >> >> Cheers, >> >> Steve >> > >> > >> >Steve, I think you misunderstand what I am saying. I am not saying that >> >"S is proportional to L". Rather, I am saying that "S is proportional to >> >Ls" (S = m Ls), where Ls = (L - Ln), and Ln = V/m. >> > >> >On the basis of these definitions, and using your example, S is indeed >> >proportional to Ls, with m as the factor of proportionality. This can be >> >seen from the following table, using your example: >> > >> >m L V S Ln Ls S/Ls >> > >> >2 1.5 2 1 1 0.5 2 >> > >> >2 2 2 2 1 1 2 >> > >> > >> >Is not this proportionality "in the strict meaning of the word"? >> > >> > >> >Comradely, >> >Fred >> > >> > >> >P.S. By the way, why do you think that I would be insulted by your >> >post? You present a clear logical criticism, without gratuitous >> >insults. I appreciate your post. >> > >> > >> Dr. Steve Keen >> Senior Lecturer >> Economics & Finance >> University of Western Sydney Macarthur >> Building 11 Room 30, >> Goldsmith Avenue, Campbelltown >> PO Box 555 Campbelltown NSW 2560 >> Australia >> s.keen@uws.edu.au 61 2 4620-3016 Fax 61 2 4626-6683 >> Home 02 9558-8018 Mobile 0409 716 088 >> Home Page: http://bus.macarthur.uws.edu.au/steve-keen/ > > > Dr. Steve Keen Senior Lecturer Economics & Finance University of Western Sydney Macarthur Building 11 Room 30, Goldsmith Avenue, Campbelltown PO Box 555 Campbelltown NSW 2560 Australia s.keen@uws.edu.au 61 2 4620-3016 Fax 61 2 4626-6683 Home 02 9558-8018 Mobile 0409 716 088 Home Page: http://bus.macarthur.uws.edu.au/steve-keen/
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