This is a reply to Jerry's 7254. Jerry, thanks again. On Fri, 24 May 2002 glevy@pop-b.pratt.edu wrote: > Re Fred's [7249]: > > > It is not the demonstration of logical consistency that helps to provide a > > basic understanding of the nature of capitalism (exploitation). Rather, > > this basic understanding is provided by Marx's theory of surplus-value and > > exploitation. Critics have argued that Marx's theory of exploitation is > > logically contradictory and therefore invalid and should be rejected. The > > demonstration of logical consistency removes this criticism, and enables > > us to continue to use Marx's theory to understand the essential nature of > > capitalism. > > Haven't many Marxists been attempting to use Marx's theory in the last > one hundred plus years since the 'controversy' began? I think you would > agree e.g. that Henryk Grossmann and Paul Mattick Sr. attempted to do > that even though they didn't share your perspective on "givens" in > Marx's theory. Didn't they understand the essential nature of > capitalism while still having a different interpretation of the > transformation? This is an interesting question about Grossmann and Mattick. I would say, yes, they understood the essential nature of capitalism as exploitation. But I don't think they provided satisfactory answers to the criticism of a logical contradiction in Marx's theory. At least not Mattick. I don't know about Grossmann, but I have never read anything about Grossmann's interpretation of prices of production. (Rakesh, can you help us? Is there a response to Bortkiewitz?) > > But the critics argue that Marx's theory is not even in > > the set of "plausible" theories. So it is at least a step forward that > > Marx's theory must be accepted in the "plausible" set. > > Well, _how much_ of a step forward would it be? Let us recall that > just about all of the debates on the 'transformation problem' have been > among *economists* and have attracted the attention primarily of radical > economists and graduate students. Is it such a step forward if other > economists say that Marx's theory is plausible logically? A step forward > perhaps for radical economists, but a step forward for workers? Yes, I think this would be an important step forward, especially for students, probably less so for workers. Economists and textbook writers could no longer easily dismiss Marx's theory with a simple "Marx's theory has been shown to be logically contradictory." The weight of authoritative rejection would be lifted, and students would be freer to consider Marx's theory more open-mindedly. I can see this happening on a small scale in my classes. It is not just workers who are important in the development of an anti-capitalist consciousness; it is also students - future workers. And their youth is often conducive to more critical thinking. > Suppose by some *miracle* we all agreed that G (your > interpretation) was the only valid solution to the controversy and then > wrote a joint declaration as a list to that effect and posted it on > other lists such as PEN-L and LBO. Do you think there would be cheering > or would there be a loud yawn? Such a joint statement of radical economists would make less difference than the acknowledgment just discussed of mainstream economists that Marx's theory is not logically contradictory. But it would be an important step toward the latter mainstream acknowledgment. > > >But, as you say, > > this is not the end of the story. The superiority of Marx's theory has to > > be demonstrated on the basis of its empirical explanatory power. As you > > say, much of my research has been concerned with this latter question - > > both the estimates of the rate of profit and my response to Mark Blaug's > > empirical appraisal of Marx's theory. But the empirical question can be > > raised only if Marx's theory is logically satisfactorily. > > > > > For example, even if we accept G, how does that answer the claims of > > > Allin and Paul C in "Testing Marx"? > > I have argued that Marx's theory is primarily a macroeconomic theory of > > profit, not a microeconomic theory of prices. Therefore, empirical tests > > of Marx's theory should be concerned with the conclusions of his macro > > theory (conflict over the working day and over the intensity of labor, > > inherent technological change, falling rate of profit, periodic crises, > > increasing concentration and centralization, etc.). > > > How does it answer the claims of > > > Geert and Mike W that their perspective in _VFS_, while largely based > > > on Marx, is superior to Marx's perspective? > > > > I have argued that the VF theory does not provide a theory of profit, and > > therefore does not provide a theory of exploitation. If labor is not the > > source of value, then surplus labor cannot be the source of > > surplus-value. I have also argued that VF theory also does not provide an > > explanation of the other important phenomena of capitalism mentioned in my > > previous paragraph (conflicts, tech change, etc.). > > > > How does it answer a claim > > > by surplus approach theorists that due to Occum's Razor, their theory is > > > preferable? > > I have argued that the surplus approach does not provide a theory of > > exploitation. Labor in the surplus approach is no more important than > > "peanuts" (a point famously made by Herb Gintis in the 1970s; but Gintis > > thought he was making the point against Marx, when it really applied only > > the mistaken surplus approach interpretation of Marx). The surplus > > approach also does not provide an explanation of the other important > > phenomena mentioned above. > > > How does it come to terms with the criticisms made by many > > > social scientists that Marx's theory is out-of-date and no longer > relevant > > > to contemporary capitalism? > > What criticisms do you have in mind? In what ways do social scientists > > say that Marx's theory is "out-of-date"? Its main conclusion - that > > capitalism is based on the exploitation of workers is certainly not out of date. > > Fred, you *entirely* missed the point of my questions. My purpose was > *not* to get you to state what your perspectives are on those topics but > to demonstrate that they are issues which a resolution of the question > of internal consistency would not resolve. Well, OK. I already said that the demonstration of logical consistency "would not be the end of the story". It is only a first step, but an important first step. Without logical consistency, Marx's theory would not even be a contender in these further comparative evaluations. > > > This 'debate on internal consistency' has been almost completely > removed > > > from the real struggles of workers. How many workers in a thousand do > > > you think have heard of the 'transformation problem'? My guess is that > it > > > is less than one in one thousand. If you were to tell them that Marx's > > > theory has been shown to be logically consistent what would that mean > to > > > them, their struggles, and their understanding of the world? > > > > When I have taught classes to workers, I have emphasized Marx's theory of > > profit - that profit is produced by the exploitation of workers. They are > > generally enthusiastic about Marx's theory, because it helps to make sense > > of much of their experience (e.g. conflict over the intensity of > > labor). It gives them greater confidence in their own intuitive > > understanding of capitalism as exploitative. > > > > I also discuss the criticisms of Marx's theory (both logical criticisms > > and empirical criticisms) and my replies to these criticisms. The workers > > usually are not too interested in these issues, but I feel it is my > > responsibility to raise them. If we were not able to respond effectively > > to these criticisms, then I would feel irresponsible and dishonest in > > presenting Marx's theory of exploitation. Wouldn't you? > > No, I don't feel it is my responsibility as an educator to "defend > Marx". Moreover, I don't think it is my responsibility as a Marxist to > "defend Marx". I am not saying that it is your responsibility to defend Marx. I am saying that if one presents Marx's theory of profit to workers or students (as I do), then one should also present criticisms of Marx's theory, and responses to these criticisms, and one's own and evaluation of these criticisms and responses. (This is not just true of Marx's theory; it is true of any theory presented.) > Our responsibility to workers as educators is simply to > tell them the truth as we see it and to encourage them also to think for > themselves. What do you mean to "tell them the truth" as you see it? What does the "truth" of capitalism include? Surely, it would include an explanation of profit, right? Which requires some general theory of profit, doesn't it? Jerry, what theory of profit do you present to workers and students? > > > As I said above, the contribution to workers' struggles is not so much the > > demonstration of logical consistency (although this is necessary), but > > rather Marx's theory of exploitation. The demonstration of logical > > consistency eliminates the criticisms and allows us to continue to use > > Marx's theory of exploitation to understand the essential nature of > > capitalism. > > Yet, before you coidified your understanding of the role of givens in > Marx's theory, I bet you tried to use" Marx's theory of exploitation as > you understood it then, no? If so, then your past history refutes your > claim. Yes, I would present Marx's theory of surplus-value and exploitation, and then I would discuss the criticisms of Marx's theory. And my response on the "transformation problem" was similar to Sweezy (and I think most Marxists) - that Marx did make a logical mistake, but this mistake can be corrected without changing anything fundamental. Now I think an even stronger argument can be made - Marx did not make this logical mistake! As I have said, I think this is a small step forward. If accepted, it would mean that Marx's theory would then have to be evaluated on other grounds, presumably on the basis of empirical explanatory power. On such empirical grounds, I think Marx's theory of profit is vastly superior to any other theory of profit. (please see the P.S. below) So I don't see how this past history refutes my current claim that it is preferable to respond to the criticisms of Marx's theory, as best we can. Comradely, Fred P.S. The explanatory power of Marx's theory of profit is clearly superior to the main neoclassical theory of profit (or interest) - the marginal productivity theory of capital and interest. This theory has almost no explanatory power. It cannot explain any of the important phenomena of capitalist economies that Marx's theory of profit can explain (conflicts over the working day and over the intensity of labor, inherent technological change, tendency of the rate of profit to fall, etc.) and it can explain no other important phenomena. This theory is static, not dynamic. It provides no theory whatsoever of the trend in the rate of profit over time. The marginal productivity theory of interest has of course also been shown by the "Cambridge critique" to be logically contradictory. What a delicious irony! It is not Marx's theory that is logically contradictory, but the neoclassical marginal productivity theory of interest. I don't know if others have noticed, but the marginal productivity theory of interest is fairly quickly disappearing from microeconomics textbooks. It looks like textbook writers have decided that the best way to respond to the problems of the marginal productivity theory of interest is simply to stop presenting the theory, and hope no students ask probing questions. It appears that the attempt to develop an alternative to Marx's theory of profit (and exploitation) on the basis of supply and demand and marginal productivies has come to an ignominious end. Marx must be howling in his grave!
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