>Hi, Fred. You write: > >>In brief answer to your question, Marx's theory explains the determination >>of the general rate of profit on the basis of law of value at the macro >>level, which is then taken as given in the determination of prices of >>production at the micro level. No other theory is able to make this >>crucial connection. > >This statement raises more questions, at least in my mind, than it answers. > >1) What is the "law of value" in this context, and what mechanism assures >its "law-like" operation at the macro level, understood as analytically >prior (otherwise it could not be "taken as given") to the determination of >prices at the micro level? And if there is no clear mechanism, why should >this be considered a valuable or valid contribution? Gil, analysis is fine and much needed in fact, but you have to do some work to understand the other side, except when they question your points if this is to be a list for the development of Marx's own theory. Also it would be helpful that if in this discussion that you don't come across as suggesting that the tradition that you represent has everything worked out--there is not a clear statement on Marx's theory of money and general crisis from Roemer and you. Which at one level is absurd. So just among the people here on OPE-L you have to recognize that your hard questioning of others can come across as a refusal to turn the analysis inward on the gaping holes in the tradition that you represent. yes, you think there are big problems with chapter 5 and value analysis is unneeded for the theory of exploitation and/or illogica due to the putative transformation problem (ha!no one can make the two equalities stick!!). You think Andrew K can't do basic math. Everyone is familiar with your judgement. But what we have not heard from you is any kind of critical analysis of your own system that you tell us takes us past Marx's Al Magest (is that the Arabic for Ptolemy's great work or Euclid's) to the Copernican world of John Roemer. To tell you the truth, I think many people here think the problems are so grave and obvious in analytical marxism--and analytical marxists are so unwilling to come to grips with the obvious--that it's a waste of time to criticize their interpretations. For example in Roemer, ed. volume I think the only systematic treatment of crisis is Przeworski's wage squeeze kind of theory but such theory has much difficulty accounting for movements in the profit rate, and Fred has argued that his theory does not suffer from the same problems. In terms of this question, I think we should emphasize--as I have said in another context--how Marx's theory extends Ricardo's critique of the adding up theory of price (Duncan suggested to me that I pay careful attention to Dobb's summary here, and II Rubin is very helpful too). So for Ricardo *the total value* of the product is given in advance, so any increase at the micro level of the price of labor (wages) will invariably lead to an inverse change in the so called price of capital (profit). Of course in terms of Marx's price of production theory, one capital's ability to beat off the average rate of profit does not necessarily add more surplus value to the system but rather redistributes a given magnitude of value that is fixed prior to distribution. This complicates the theory of counter-tendencies for some counter-tendencies beat off fall in the average rate of profit by adding to the surplus value in the system as a whole (say a system wide rise in s/v) while other counter-tendencies stave off the fall in the rate of profit for some capitals at the expense of others. But total value (i say total value instead of surplus value) coming before price and price changes in themselves not changing that total value seem to be pretty basic to Marxian theory. This is why I would hold total value=total direct price=total price of production in a complete transformation if one were in fact so needed. I am not saying that this is correct. But surely if you want to criticize the analytical priority given to value, you should say why Ricardo and Marx did just that in the course of critiquing the adding up or cost of production theory of price and then tell us why this is the wrong way to go. As for the law of value, I don't think anything too complicated is meant other than economic magnitudes (the sum of prices of production) are determined by abstract labor time expenditures--though of course for Marx indirectly. Rakesh
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