This is a reply to Diego's (7303). (Hi Diego, thanks very much for your post.) On Thu, 30 May 2002, Diego wrote: > Fred wrote in 7282: > > I think David presented the germs of the right approach to understanding > > Marx's logical method and to responding to the critique of logical > > inconsistency. In myview, the two main points of this interpretation are: > > > > 1. The determination of the total surplus-value and the general rate of > > profit prior to the determination of prices of production (not > > simultaneously). > > > > 2. The same quantities of constant capital and variable capital are taken > > as given (as quantities of money-capital) in the determination of both > > values and prices of production, and thus these quantities do not have to > > be transformed in the determination of prices of production. > > > > > I would like to comment on this (Hi Fred): > > 1. The determination of the total surplus-value and the general rate of > profit is "prior to the determination of prices of production" because the > extraction of surplus labor from labor processes is a real process, and the > actual general rate of profit is the mass of profits divided by the mass of > capital, ie the mass of surplus labor extracted during a certain period > divided by the mass of previous accumulated labor measured at a certain > temporal point (especially, its first point) in this period. All these are > real processes. In order to understand them better, theoretically, we > theoreticians need some quantities and numbers which are helpful in this > theoretical capture: production prices-or-values are an example of these > theoretical numbers, as direct prices-or-values are as well. > > 2. "The same quantities of constant capital and variable capital are taken > as given (as quantities of money-capital) in the determination of both > values and prices of production, and thus these quantities do not have to be > transformed in the determination of prices of production" This is, in my > opinion, a correct reading of what Marx was thinking. Thank you very much for your agreement on this important point. This at least eliminates the criticism that Marx failed to transform the inputs and thus that Marx's theory is logically inconsistent. This is a big step forward. > But Marx just wanted a > way to determine regulating prices of actual prices. What is important for a > regulating price is to be helpful in explaining the behavior in real time of > actual prices. There is not just one set of regulating prices which can be > taken as operating as attractors of actual prices. Nor just one set which at > the same time is helpful to understand the two main aspects of competition > (intra-sectoral and inter-sectoral competition) which explain the major > deviations of the magtnitude of actual prices from our theoretical prices. > > Matrix algebra gives us an easy way to calculate both direct and production > price vectors (as eigenvectors) which differ a bit from Marx's "vectors", > but serve as well as the same type of attractors or centres of gravity for > actual prices. Even if these vector are not Marx's ad pedem litterae, they > are in agreement with Marx's spirit and serve the same purpose: the > theoretical understanding of both exploitation-and-competition actual > processes, a sector or reality which we all want to capture. > > What do you think? > > Comradely, > > Diego You argue here that "matrix algebra Marxism" is a different theory from Marx's theory (I agree completely!), but that both these theories attempt to accomplish the same purposes - to explain the dual phenomena of exploitation and competition. I would argue that Marx's theory is much more concerned with exploitation than competition, and that "matrix algebra Marxism" reverses these priorities. But, more importantly, I would argue that "matrix algebra Marxism" does not really provide a theory of exploitation at all, or that its theory of exploitation does not really explain the real world, actual surplus-value, but rather explains a theoretical, hypothetical "surplus-value", that is equal to the "direct prices" of surplus goods. Furthermore, this hypothetical "surplus-value" plays no essential role in the determination of the real world, actual surplus-value. The real world, actual surplus-value can be derived without any reference to this hypothetical "surplus-value" or surplus labor. In other words, I think that Samuelson's "eraser" critique or Steedman's "fork" critique of "matrix algebra Marxism" is essentially correct - that the labor-values derived in the "value system" play no essential role in the determination of prices of production in the "value system". I think this critique is logically indisputable. Marx's theory, by contrast, explains the actual, real world surplus-value as proportional to surplus labor, thereby clearly exposing the essential nature of capitalism as the exploitation of workers. That is why I think Marx's theory is superior to "matrix algebra Marxism". Diego (and others), what do you think? I look forward to further discussion. Comradely, Fred
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