I seem to have stirred up a hornet's nest on this one, and I'll reply to five posts--Jerry's, Andrew's, Rakesh's, Alejandro's, and Allin's--to try to set them in context. Firstly, my plea for discussing other current issues--such as the Internet Bubble in the USA--was not a request for this list to abandon its theoretical foundation. It was more an observation that, if we did discuss such topics, our discussion would not in any meaningful way be informed by theories of Marxism--because we are still trying to work out the basic building blocks of such a theory. If I were discussing this topic on a post keynesian list, then I could use Basil Moore's theory of endogenous money, Minsky's theory of financial instability, Wynne Godley's work on social accounting matrices, Willi Semmler's work on credit cycles, my own extended-Goodwin model of chaotic interactions in finance, Andresen's model of stock markets... There are plenty of Post Keynesian building blocks for extended analysis of complex sub-systems of capitalism. But what are Marxists able to contribute on this? Of course there are some components; but the vast majority of academic output by Marxists has been about ... the transformation problem... For that reason, amongst many others, I feel quite confident in saying that there is something seriously wrong in the conventional Marxian understanding of Marx. That's why I made my comments, Alejandro: not because I want to dictate what a marginal group should discuss, but because I want to point out how this marginal group has let itself become fixated on one subject, rather than developing an overall critique of capitalism. I argue that this fixation exists because the core belief that labor is the only source of value is in error, and the attempt to maintain that while developing more complex analysis results in impossible complications, which always return debate to ... the transformation problem. As for the TSS approach in general and debates with Rakesh in particular, I think Allin expressed the problem succinctly and accurately: "you're dodging theoretical refutation, by introducing complicating assumptions as the argument goes along so that your opponent (e.g. me) is unable to pin you down to any particular proposition and is eventually forced to give up." That said, this doesn't characterise Andrew (thanks also for the comments on use-value, Andrew), who asks: >>You referred to "a system which, if stated in the form of dynamic >>equations, would have more unknowns than equations. In such a system, >>any[] argument is possible--even, for example, that capital is the only >>source of value and labour only maintains its value input." >My question is, this. Don't such arguments (when they are also stated in >the form of dynamic equations) supply the missing equations? I don't see >the mathematical problem. I realize you disagree with this theory, >Steve, but isn't that a different matter? I expect that if you set out a full TSS system of dynamic equations of expanded reproduction with technical change, you would have a system which either (a) had the same transformation problem flaws as the classic static model or (b) had more unknowns than equations. This can't be established just with arithmetic examples which show counter-cases: you have to set out a full set of dynamic equations. Because I reject a key premise of the TSS approach (that labor is the only source of value) I'm not going to attempt to work this out--it's just too hard. But this raises Allin's point, which he puts beautifully: >As regards the transformation, I have this diagnosis. One >coherent view of the issue is that stemming from Bortkiewicz. >There is a clear argument showing that Marx's two equalities >cannot both be sustained. This argument is usually developed in >relation to a simple tableau showing simple reproduction. Now >it would be weird and wonderful if one could show that while >Marx's two equalities don't hold in *that* case, they >nonetheless *do* hold in the case of extended reproduction with >ongoing technical change. I don't believe you've shown anything >of the sort. You've just complexified the example to the point >where we lose track of the original situation we're trying to >transform, then "anything goes". I believe that this pithily summarises what the TSS endeavour is (though I have yet to read the original Freeman/Carchedi volume), and its likely outcome. This is the point which Rakesh cannot get. I don't require that input prices "arbitrarily" equal output prices in my analysis of Marx, or anything else for that matter (and I'm sending you my Steedman paper under separate cover to make that point: the Sraffian system is *not* my system). My expectation is that if the expanded reproduction with technical change and changing prices case were set out in full dynamic equations, then there would still be a transformation problem (but now in a dynamic guise) if you insisted that surplus value came solely from labor. However, I also cannot help but return to a crucial comment of Marx's, from which he never resiled: "To explain, therefore, *the general nature of profits*, you must start from the theorem that, on the average, commodities are *sold at their real values*, and that *profits are derived by selling them at their values*, that is, in proportion to the quantity of labour realized in them. If you cannot explain profit upon this supposition, you cannot explain it at all." (Footnote: **Marx, K.*, "Wages, price and profit"in *Marx-Engels Selected Works*, Volume I, Marx-Engels-Lenin Institute (ed.), Foreign Languages Publishing House, Moscow, 1951, p. 384.) The TSS approach appears to me to be an attempt to explain "the general nature of profits" in a situation in which values change with time, and that without that change, there would be no TSS explanation for profits. I don't see that as being in the spirit of Marx's economics, and here again I concur with Allin: >There is, however, an alternative view on which Marx's two >equalities do hold (regardless of dynamics and all that). This >is the view Andrew and Alan Freeman defend. It requires that we >conceive of the "value transferred to the product by the means >of production" not in the "standard" way, as the socially >necessary labour-time required to produce the means of >production, but rather as the price of the means of production >divided by the economy-wide MELT. (I think this claim >fundamentally breaks the labour theory of value and I can't >accept it.) >If you take this view, it simply doesn't matter whether the >means of production are assumed to be priced "at their values" >in the initial transformation tableau, or at prices of >production, or at arbitrary market prices. Marx's single-step >transformation needs no further adjustment because the value >transferred by the means of production is itself a function of >the prices of those means of production. >I think you have to choose. You've said several times that some >further adjustment is called for due to the fact that Marx's >inputs are assumed to be priced at value, but you refuse to >follow out the logic of that admission. Well then, consider the >alternative. Cheers, Steve 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/
This archive was generated by hypermail 2b29 : Tue Oct 31 2000 - 00:00:11 EST