On Sat, 4 Nov 2000, Steve Keen wrote: > Hi Fred, > > Yes, I agree that I used harsh language, and I stand by it. > > As you put it, this argument is that "the total amount is LOGICALLY > DETERMINED prior to the determination of the individual > parts". My systems-oriented mind can't help but ask 'by what mechanism?'. > > To me, this argument is as specious as the one Friedman used to define > uncertainty, that individual incomes are unknown, but aggregate income is > known and never changes. > > Both propositions are balderdash, irrespective of the politics of the > authors who uttered them. Unless these 'variables' are determined in some > aggregate fashion by some meaningful system, and then split up between > individuals, then the alleged mechanism is nothing other than a nonsense > abstraction used to sustain a nonsense theory--again, whether that theory > be marxian or neoclassical. > > In other words, if capitalism is a disaggregated system of production and > distribution, then you have to work from the units up, and not from the top > down. This is not an argument for methodological individualism of course, > nor a denial of the fact that perceptions and magnitudes at the systemic > level affect its components. > > cheers, > Steve Steve, in a sense, Marx's theory does "work from the units up". In Volume 1, Marx's theory first determines the individual amounts of surplus-value produced by any given capital, as the difference between the new-value produced by its workers (NVi = mLi) and the variable capital invested (Si = NVi - Vi). However, Marx's theory is not just about this individual capital. Rather, it is about what ALL capitals have in common - the production of surplus-value. Thus, this same theory of surplus-value applies to EACH and EVERY capital, and hence to ALL capitals together, i.e. to the total social capital. Therefore, the total amount of surplus-value is determined by the sum of all the individual amounts of surplus-value produced by all the individual capitals. In this sense, the total amount of surplus-value is indeed "worked up" from the individual amounts of surplus-value produced by the individual capitals. The "mechanism" of going from the individual amounts of surplus-value to the total amount of surplus-value is simple aggregation. However, it still remains true that, in Marx's theory, the total amount of surplus-value is determined prior to the subsequent division of this total amount into the individual parts of industrial profit, merchant profit, interest, and rent. This latter point is what I have emphasized and to which Rakesh has referred. The reason why the total amount of surplus-value is determined prior to its division into the individual parts of profit, etc. is that all these individual parts have the same source: the surplus labor of workers. This sets the limit of the sum of the parts. As Ian put it in (4453), the production of surplus-value is "a more fundamental feature" of the capitalist system that how the surplus-value is distributed through competition. This seems to me to be a perfectly valid logical procedure - the total amount of surplus-value is first determined as the sum of the individual amounts of surplus-value and then this total amount of surplus-value is divided into the individual parts of profit, interest, etc. I don't see the relevance of the Friedman example. In Marx's theory, the individual amounts of surplus-value are not unknown; they are determined by the theory of surplus-value in Volume 1. The total surplus-value is then determined as the sum of these individual amounts of surplus-value. Furthermore, Marx certainly does not assume that the total amount of surplus-value "never changes". Rather, Marx assumes only that once the total amount of surplus-value is determined for a given period, its magnitude is not affected by the subsequent division of this total amount into the various "forms of appearance of surplus-value" in Volume 3. Steve, thanks for the discussion. Comradely, Fred
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