Dear Rakesh, I'm still recovering from the realisation that, if I am to accept your first paragraph at face value, that you actually have understood part of my argument. Yes, that is precisely my argument--with the caveat that in my opinion Marx was not so much requires to extend his analysis beyond labor power, but that the analysis was of itself general, and therefore did apply to all inputs to production. I argue that Marx did apply this analysis to machinery (in Capital I), but twisted the analysis to make it appear that it reached the same result as his previous method based on the unique aspects of labor. On the remainder of your post, we're poles apart as usual. What I object to about the way you characterise Marx can I hope be illustrated by reference to how Keynes was represented. Keynes put forward an analysis of capitalism in which he categorically rejected what economists now call "Walras' Law", and which they used to call Say's Law--that the sum of excess demands for all markets is zero. This proposition was regarded as so evidently true by most economists--since each effective supply must have a matching demand--that Keynes was seen as being wrong, or at best pointing out some situation which might apply out of equilibrium but could not apply in equilibrium. Then economists like Clower argued that Keynes's argument was a disequilibrium one--that while the sum of all 'notional' excess demands was necessarily zero, the sum of all 'effective' demands might not be zero. This was accepted by most 'Keynesians', so that Milgate could write in the Palgrave "Received opinion, that Keynes’s General Theory is a contribution to ‘disequilibrium’ analysis, was stamped indelibly upon the collective consciousness of the economics profession at an early date–by critics and converts alike (Milgate 1998). In other words, Keynesians interpreted Keynes to be saying something which was true in disequilibrium, but which could not be true in equilibrium. In fact, I and many other post Keynesians argue that this was wrong--Keynes was actually pointing out that the initial proposition that the sum of all excess demands was zero was itself false. Why this diversion? Because the way I interpret the way you portray Marx, you appear to be saying that Marx was a disequilibrium theorist whose propositions may be false in equilibrium, but are true in disequilibrium. In my opinion, Marx's views are true in equilibrium and in disequilibrium--but the way I read Marx, of course, invalidates the labor theory of value. You would acknowledge that the labor theory of value is 'false' in equilibrium--in that it suffers from insurmountable logical inconsistencies which you attribute to the equilibrium methodology itself, rather than the underlying logic of the labor theory of value. >From my point of view, you 'rescue' Marx in the same way that early Keynesians 'rescued' Keynes, by saying that his propositions are not generally true, but are true in disequilibrium--and that since equilibrium will never apply, the fact that his statements aren't true in equilibrium doesn't matter. I see that as a rescue which loses much of the essence of what Marx was on about. Marx's analysis should apply across all of 'phase space', not just as something which works out of equilibrium but is invalid in it. This DOES NOT mean that I think marxists should use equilibrium methods--for god's sake don't throw that one at me again, because I work exclusively in dynamics, and I know a lot more about what that means than you do. Cheers, Steve At 19:59 31/10/00 -0800, you wrote: >re 4391 >>No Rakesh, it means you're never going to understand my analysis, and I am >>never going to understand yours. >>Steve > >Steve, >I do understand your argument that Marx should have extended the use >value-exchange value dialectic beyond labor power. I just don't >accept that Marx is compelled to give up his definition of value by >any logical implication of that dialectic. What in my response to you >indicated a lack of understanding of your analysis? > >Now... > > >*Do you understand that Marx did not think the equalisation of profit >rates depended on the suspension of competition? > >*Do you understand that since Marx defined surplus value as total >value minus cost price and the rate of profit as surplus value over >"cost price" or "total capital advanced" (terms which he uses as >synonyms in capital 3, ch 2) , he could not have thought that the >mass of surplus value and the rate of profit would remain invariant >if the cost prices are modified due a transforming of the inputs? > >*Do you understand that it is not logically implied by the need to >transform the inputs into prices of production that they be >transformed into the identical unit prices of production as the >outputs? > >What is it that is so hard to understand about what I write? That I >am not willing to give up value and thus the foundation of Marx's >disequilibrium theory of accumulation and crisis? Is this what makes >me difficult? > >The above three questions are reasonably clear, clear enough >certainly to be answered and not evaded. > >Yours, Rakesh > > > > > > > > > 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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